United Airlines, the wholly owned subsidiary of United Continental Holdings Inc. (UAL) entered into a deal with partner SkyWest Airlines – an affiliate of SkyWest Inc. Per the Capacity Purchase Agreement (CPA) between the two carriers, SkyWest will run 40 Embraer 175 aircraft under the United Express brand.
In late April, United Airlines struck a deal with the Brazilian planemaker Embraer to buy 30 of its E175 planes. The recent contract of United with SkyWest is an addition to the month-ago deal.
The airplanes – which are scheduled to be delivered through 2014 and 2015 – are the first 76-seat jets operating on a regional basis in the United Express fleet. Designed with 12 first-class seats, 16 Economy Plus coach seats with extra legroom, 48 coach seats, wider seats with more aisles space and larger overhead bins, these jets aim to offer a more comfortable flying experience to passengers.
These dual-class aircraft will replace United’s older 50-seat regional jets that are proving expensive due to high fuel prices. With the new airplanes, United will be able to save 10% fuel per passenger as well as emit less harmful gases.
On the other hand, the agreement between SkyWest and Embraer carries the option of purchasing another 100 E175s, making the contract value worth $4.1 billion. If SkyWest decides to go for another 100 sets of E175s, Embraer is estimated to receive an additional $4.1 billion.
United Airlines is in constant endeavor to expand its route network with the most advanced and upgraded aircraft along with rendering top-class services to flyers. Early this week, the company re-launched The Boeing Company’s (BA) 787 Dreamliner aircraft with service between Houston Intercontinental and Chicago O'Hare.
United Continental, which operates in the airline industry with the likes of Delta Air Lines (DAL) and Southwest Airlines Co. (LUV) , currently retains a Zacks Rank #3 (Hold) rating.
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment