by Bill Carey
Alaska Air Group subsidiary Horizon Air signed a firm order with Embraer to acquire 30 E175 regional jets, a transaction valued at $2.8 billion at list price. The order, announced on April 12, is Horizon’s largest fleet acquisition since its founding in 1981.
Horizon said it will fly the 76-seat jet exclusively for Alaska Airlines under a capacity purchase agreement beginning next spring. The E175 and Horizon’s current fleet of Bombardier Q400 twin-engine turboprops will operate alongside each other “for the foreseeable future”; however, the E175 will replace 15 Q400s due for return in 2018. The Portland-based carrier now operates 52 of the turboprops.
“The E175s position Horizon for growth beyond our current West Coast destinations while providing better customer utility in the growing Alaska Airlines network,” said David Campbell, Horizon Air president. “The spacious E175 offers a passenger experience that’s on par with much larger jets. This aircraft opens up tremendous new opportunities to fly to new places that would not have been feasible with our existing aircraft.”
Horizon’s E175s will be configured for three classes, with 12 seats in first class, 16 in premium class and 48 in the main cabin. Embraer will deliver the jets over three years starting in 2017. The order includes 33 options, the parties said.
The new fleet order is a boost for Embraer’s commercial aircraft division, which saw its profit outlook take a hit when Indianapolis-based Republic Airways filed for bankruptcy in February. Republic has 24 undelivered E175s on order.
With the Horizon contract, the Brazilian manufacturer said it has sold 332 E175s to airlines in North America since January 2013. “To be chosen by Horizon to expand their fleet with the E175 is a great honor for Embraer. It recognizes the great economics that this aircraft offers,” said Paulo Cesar Silva, Embraer Commercial Aviation president and CEO.