Thursday, March 30, 2000
Delta connectors to buy up to 500 jets
BY MIKE BOYER
The Cincinnati Enquirer
Comair and Atlantic Southeast Airlines, the Delta Connection carriers, Wednesday announced the largest regional jet order in history for up to 500 aircraft in the next decade.
The deal, expected to be completed in the next few months, includes firm orders for 94 Canadair Regional Jets (CRJs) produced by Bombardier Aerospace in Montreal, valued at $2 billion, and options for up to 406 additional CRJs, valued at another $8 billion through 2010.
The firm orders, to be delivered by 2004, include a mix of 40-, 44- and 50-seat CRJs and 70-seat CRJs that will allow both Comair and ASA to accelerate their plans to go to an all-jet fleet.
All of the regional jets will be powered by GE Aircraft Engines' CF34 engines produced in Lynn, Mass., and Durham, N.C. Components are produced at Evendale, and the CF34 engine program employs several hundred people in Cincinnati. The engine order, also a regional jet record, was valued at $2 billion for both the firm and optional aircraft, GEAE said.
The aircraft orders, expected to fulfill both Comair and Atlantic Southeast Airlines' fleet growth plans for the next decade, also further Delta's plans to expand in the regional airline market.
ASA, which operates out of Atlanta and Dallas-Fort Worth, was acquired by Delta last year, and Comair, which operates out of Cincinnati and Orlando, was bought by Delta in January for $1.9 billion.
“This order gives us the tools to do what we've been talking about since we announced the acquisitions,” said David Siebenburgen, president and CEO of Delta Connection and former president of Comair.
One feature of the order is that Bombardier and GEAE, at Delta's request, are introducing 40- and 44-seat versions of the Canadair regional jet, built on the same platform as the 50-seat regional jets introduced by Comair in North America in 1993.
“We challenged Bombardier two years ago to build a "microjet' in the 35- to 40-seat capacity,” Mr. Siebenburgen said. “This gives us tremendous flexibility and economies of scale.”
He said the smaller capacity jets will give Delta the ability to serve smaller, thinly traveled routes with jet service and feed that traffic to hubs such as Cincinnati.
Delta and Bombardier are still discussing how to configure seating on the smaller-capacity jets, but officials said they would probably include additional storage and galley areas. Because the smaller capacity jets will be built using the same CF34 engine and aircraft platform as the 50-seat versions, they could be upgraded to carry that many passengers in the future.
The new jets also will allow the Delta Connection to expand direct flights to other larger markets, such as Comair's recently announced plans to offer direct flights to New York City's LaGuardia Airport and Dallas' Love Field.
Comair now operates a fleet of 93 50-seat CRJs and expects to have an all-jet fleet operating out of its Cincinnati hub by the end of this year. Comair expects to introduce the 70-seat CRJ next year.
Comair's Florida operations should be all jet by next year, Mr. Siebenburgen. ASA, which operates 45 50-seat CRJs, also has about 50 turbo-prop aircraft in its fleet. It expects to convert to an all-jet fleet in the next five years, officials said.
Delta is one of the few U.S. carriers that isn't restricted in its use of regional jets by its contract with the pilot's union, but Mr. Siebenburgen declined to comment on what impact the regional jet-fleet expansion would have on the carrier's relationship with the pilots.
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