PAUL LEWIS / WASHINGTON DC
Embraer is in talks with Alitalia Express to spearhead the introduction of the 170 into commercial service in the fourth quarter, after launch customer Swiss International Air Lines halved its order and deferred deliveries for a year. Meanwhile, the Brazilian manufacturer is seeking new sales to pick up the slack in production created by the loss of the Swiss orders. All eyes are now on US Airways emerging from bankruptcy protection.
Swiss has reached a financial settlement with Embraer to reduce firm orders for the 170 and 195 from 60 to 30, and cut options from 100 to 20. It will take 15 170s, with first deliveries delayed by a year to August 2004, and a similar number of the larger 195 from 2006. As a result the value of Embraer's backlog has fallen by 12% to $19.5 billion, with the total firm orders for the 70- to 110-seater now standing at 88 aircraft and 128 options. Not yet included in the backlog is a LOT Polish Airlines order expected to be finalised soon for six 170s.
Embraer has again cut its delivery projection for all types from 145 to 132 this year and from 155 to 136 aircraft in 2004, of which 83% and 77% respectively are accounted for by firm orders. The number of 170s due for delivery in 2003 has been cut to 12, including six for Alitalia Express and the first for GE Capital Aviation Services. A major order from US Airways is hoped for soon, to help fill empty 170 production slots this year and unallocated slots among the 40 170s it will build in 2004 (Flight International, 18-24 March).
Attention is now focused on Alitalia Express conducting route proving for the 170. The carrier will be launch operator following the Swiss deferral. Alitalia says its first aircraft is due to be delivered at the end of August - around three months later than scheduled. The aircraft is officially due to enter service at the start of winter schedules in late October, but the airline says it could be deployed on revenue services for test purposes before this. Airline sources confirm that talks have been held about it conducting some function and reliability tests.
With aircraft deliveries last year falling 18.6% compared with 2001 and only 40 new orders booked during the year, Embraer saw its net sales for the same period drop 13.7% to $2.52 billion. Military and business aircraft sales, along with improved productivity, boosted fourth quarter results, but the company ended 2002 with a net profit of $222.6 million, down from $328 million in 2001.
ADDITIONAL REPORTING BY JUSTIN WASTNAGE IN LONDON
Source: Flight International