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Midwest goes for Boeing 717 and Embraer RJs

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Midwest goes for Boeing 717 and Embraer RJs

Old 11th Apr 2001, 13:05
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Unhappy Midwest goes for Boeing 717 and Embraer RJs

Reuters reports:

"Regional airline Midwest Express Holdings Inc. on Tuesday said it would buy 20 Boeing 717 jetliners and 20 Embraer regional jets for a total of $1.15 billion.

Milwaukee-based Midwest will also take options for 30 more 717s and 20 more Embraer jets. Neither order was firm, but the airline has signed memoranda of understanding agreeing to both purchases.

The carrier said it chose the 100-seat 717 for growth and to retire some of its 24 DC-9s, which the 717 was designed to replace.

In selecting the 717 over Airbus Industrie's 100-seat A318, Midwest, which also operates 10 MD-80s, gave a boost to the slow-selling 717 model, on which it will seat 88 passengers.

In a typical configuration, the 717 seats 106 passengers. But Midwest Express will remove some seats and will instead install full first-class seating.

Midwest offers first-class service to all passengers and decided the 717 was a better fit for its two-by-two leather seating plan than the A318.

"We conducted extensive research and found out how very important our signature two-by-two seating is to our customers,'' said Midwest Chairman Timothy Hoeksema, noting that the 717 would significantly lower its operating costs.

Midwest's Skyway subsidiary will operate the Embraer jets, initially taking delivery of 44-seat ERJ 140s. But it could opt for the 37-seat ERJ 135 or the 50-seat ERJ 145 on future deliveries.

Skyway President James Rankin called Embraer jets "extremely passenger-friendly,'' adding: "They have a comfortable two-by-one seating configuration, with the look and feel of larger jets.''

Delivery of the ERJs will begin in March 2002 and continue into 2005 at a rate of one aircraft every other month. The Boeing 717s will be delivered from February 2003 to 2006 at a rate of one aircraft every other month.

The airline valued the 717 order at $750 million, which matches Boeing catalog prices, though customers routinely receive discounts of 25 percent or more.

The Embraer purchase was valued at $400 million.

When finalized, the 717 orders will boost Boeing's backlog to 174, plus 177 options, on its smallest model.

Midwest opted not to take 20 717s ordered by Trans World Airlines before that carrier went bankrupt and was bought by American Airlines parent AMR Corp. AMR has agreed to buy 15 of 35 717s remaining from a 50-plane TWA order but has not made a decision on the other 20.

Midwest, which will instead take new 717 delivery slots, had previously expressed interest in the TWA planes, amid talk that they might be available at fat discounts.

Since TWA and AirTran Holdings Inc. each ordered 50 717s from McDonnell Douglas, the model has drawn only smaller orders from secondary airlines, prompting industry speculation that Boeing might cancel the program.

With no similar planes still in production, the 717 is considered an "orphan,'' offering no commonality with other new planes that could lower operating and maintenance costs and crew training."

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