Bombardier signs SkyWest Airlines for 30 CRJ700 regional jets

The deal is worth $1.2 billion (Cdn)--good news for a company that has had to deal with its share of "not-so-good" news, of late. SkyWest Airlines of St. George, Utah has placed a firm order for 30 70-seat Bombardier CRJ700 regional jets for the airline’s United Express operation on behalf of United Airlines. SkyWest also took options on an additional 80 Bombardier CRJ700 aircraft.

Value of the firm order is approximately $862 million U.S. ($1.2 billion in Cdn dollars). Exercise of the 80 options by SkyWest could boost the potential value of the transaction to approximately $3.35 billion U.S. ($4.6 billion Cdn.). Deliveries of the firm-ordered aircraft are scheduled to begin early in 2004 and continue through 2005.

SkyWest is one of the original launch customers for the Bombardier CRJ and has placed firm orders for 100 of the 50-seat aircraft.

SkyWest and United recently signed a Memorandum of Understanding (MOU) for an 11-year contract under which SkyWest will significantly expand its United Express services. On September 10th, 2003, the MOU was converted to a definitive agreement with the approval of the SkyWest Board of Directors, United Airlines, and the U.S. Bankruptcy Court. SkyWest was the first regional airline to sign a MOU for growth aircraft with United, and SkyWest is now the first regional airline to complete a court-approved agreement.

Currently, SkyWest operates 675 daily flights to 66 cities for United out of hubs in Denver, Colorado; Los Angeles and San Francisco, California; Portland, Oregon; and Seattle, Washington. The new contract with United will provide SkyWest with new opportunities at United’s Chicago, Illinois hub as well as expanded service in the Denver market.

“The 50-seat Bombardier CRJ has been the driving force behind our growth over the past decade and we are confident that the 70-seat Bombardier CRJ700 will help us continue that growth,” said Jerry C. Atkin, chairman, president and CEO of SkyWest Airlines. “The Bombardier CRJ700 aircraft’s exceptional seat-mile costs and its family commonality with the 50-seat CRJ will help us maintain our low cost structure while providing more efficient jet services to United Airlines.”

“This order is evidence that the CRJ revolution is continuing and that the Bombardier CRJ has become an indispensable tool in the arsenal for many airlines,” said Steven A. Ridolfi, president of Bombardier Aerospace, Regional Aircraft. “The Bombardier CRJ family delivers unbeatable economics in the 50/70/90-seat segment and continues to change the way the world flies.”

“Bombardier Aerospace was first to the market with 70- and 90-seat regional jets and as at July 31st, there were already 112 CRJ700/CRJ900 aircraft in revenue service with nine operators around the world,” Mr. Ridolfi added.

As of July 31st, 2003, firm orders for the Bombardier CRJ family stood at 1,261.

FMI: www.bombardier.com, www.skywest.com