American and Republic E175 contract approved

Washington DC
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The bankruptcy court has approved American Airlines and Republic Airlines' revised capacity purchase agreement for 47 Embraer 175s on 12 March.

Embraer will deliver the first 76-seat E175s in the middle of 2013 with the last coming in 2015. They will fly under the American Eagle banner.

American and Republic originally proposed the 12-year agreement for 53 aircraft, split between 47 new and six used E175s, but removed the used aircraft after objections from labour groups and the mainline carrier's unsecured creditors committee.

Fort Worth-based American did not comment by press time.

Indianapolis-based Republic updated its 2013 guidance to reflect the agreement. The regional carrier anticipates operating revenue of between $1.4 billion and $1.42 billion, up from guidance of between $1.36 billion and $1.38 billion in December, with a pre-tax margin of 6.25% to 7.25% this year, according to an investor update today.

Available seat miles are expected to increase by about 4.1%, departures by 11.2% and 11.2% this year compared to 2012.