June 18, 2007

Embraer Sells 40 Planes to Lufthansa, Japan Airlines

(Update3 from Bloomberg) -- Empresa Brasileira de Aeronautica SA, the world's third-biggest maker of commercial planes, won orders worth as much as $3.1 billion from Deutsche Lufthansa AG and Japan Airlines Corp.

Lufthansa, Europe's second-largest carrier, ordered 30 Embraer 190 E-Jets, the Sao Jose Dos Campos, Brazil-based planemaker said today at the Paris Air Show. Japan Airlines ordered 10 170 E-Jets with options on another five.

Embraer announced the E-Jet series of regional aircraft at the 1999 Paris Air Show and began producing the plane in 2002. Demand for E-Jets, which can seat 70 to 118 people, allowed the company to surpass Bombardier Inc. of Canada as the third-largest producer of commercial aircraft.

``The market is very hot for both commercial and corporate aircraft,'' Embraer Chief Executive Officer Frederico Curado said in an interview. The company is in talks with India's Paramount Airlines Pvt Ltd. and Iraq Airlines to sell E-Jets, he said.

Shares of Embraer fell 21 centavos, or 0.9 percent, to 24.36 reais at 12:21 p.m. in Sao Paolo. The stock has advanced 11 percent this year.

Lufthansa, Japan Airways

Delivery of the E-Jets to Cologne, Germany-based Lufthansa will start in 2009 and the plane will be configured with 100 seats in a two-class cabin layout, Embraer said. The plane can fly from Germany to destinations in Europe, the Middle East and North Africa, the company said. The aircraft has a range of 2,400 nautical miles (4,448 kilometers), Embraer said.

The Lufthansa order is Embraer's biggest for the plane since China's HNA Group bought 50 E-Jets in August.

Deliveries to Japan Airlines, Asia's largest carrier by sales, start in 2008. The planes will have cabins for a single class of travelers and will be used by J-AIR, a subsidiary of the Tokyo-based company, to serve regional routes. J-AIR carried 663,000 passengers in the year ended March 31.

Japan Airways will use the aircraft to help reduce overhead costs as part of a program to trim expenses and return the airline to profit, the carrier said in an e-mailed statement today.

``The introduction of the Embraer 170 will enable the JAL Group to promote optimal aircraft size, depending on the scale of demand of each domestic route,'' Chief Executive Officer Haruka Nishimatsu said in the statement.

Embraer is investing $1 billion in the next two years to boost output of regional and corporate planes, and to develop new business aircraft. The company is planning to increase production of its bigger regional jets to 14 a month from 12 as orders climb.

To contact the reporters on this story: Tracy Alloway in London at talloway@bloomberg.net ; Emmet Oliver in London at eoliver4@bloomberg.net .

The full of this article's can be read on the source at: Bloomberg.com

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