Bombardier Gets $770 Million to Build 22 CRJ-700s for AMR Corp.

Bombardier won a $770 million contract to build 22 planes for American Airlines. The order is part of a $2.9 billion financing package for the air carrier which ordered CRJ-700 regional jets to be placed with American Eagle.


Eagle

The Canadian aerospace manufacturing company and AMR Corporation, the parent firm of American Airlines, signed a letter of intent. Bombardier is expected to start delivery of the initial order of 22 aircraft by mid-2010. American Airlines’ sister company, American Eagle plans to order more aircraft as part of its fleet expansion plan, which includes adding a first-class cabin on its 25 CRJ-700 planes, AMR chairman and chief executive officer Gerard Arpey announced on Thursday.

Arpey said in a statement, “Today’s announcement positions our company well to face today’s industry challenges and allows us to remain focused on the future and on returning to profitability.”

The new orders would boost the business of Bombardier shaken by the slump in the global aviation industry. Because of several plane order cancellations the past few weeks, Bombardier was planning to lay off about 4,300 workers. The American Airlines order may stave off the mass retrenchment of Bombardier employees.

AMR Corp. chairman and chief executive Gerard Arpey, said, “Today’s announcement positions our company well to face today’s industry challenges and allows us to remain focused on the future and on returning to profitability.”

AMR also said that American Eagle’s existing fleet of 25 CRJ700 are planned to be outfitted with first class cabins.