European regional airline Flybe announces purchase of up to 140 Embraer aircraft

Euro carrier Flybe to buy up to 140 Embraer planes

FARNBOROUGH, England — European regional airline Flybe says it has signed a contract to buy 35 Embraer 175 aircraft from the Brazilian manufacturer in a $1.3 billion deal.

Flybe said Tuesday at the Farnborough International Airshow that it also signed up for options on a total of 105 more planes. The value of the options was not announced.

The first aircraft will be delivered in September 2011 with the last of the 35 planes due in March 2017.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.

FARNBOROUGH, England (AP) — A flurry of orders for Airbus and Boeing signaled an optimistic start to the Farnborough International Airshow — and more are expected as the show enters its second day.

On Monday, deals worth more than $17 billion suggested the worst may be over for the airline industry. While European carriers remained cautious, aircraft leasing companies showed increased demand as they return to the market after the recession.

On Tuesday, Airbus is expected to make at least one order announcement, as is ATR, an EADS-Finmeccanica joint venture.

Airbus chief salesman John Leahy says his company and U.S. rival Boeing survived the recent downturn better than in the past because they anticipated a slump in orders and let their backlogs build up without increasing production.

More than 1,000 exhibitors from 38 countries have signed up for Farnborough, with delegations from Egypt, Taiwan and Morocco attending for the first time. Organizers also cited stronger interest from major players China and Russia.

“We’re gradually starting to see a slow recovery to a new norm,” Owen MacFarlane, CEO of CAV Aerospace, told the AP from his exhibition stand at the show.

“So maybe it’s not the same volumes as we saw in 2007 and 2008, but certainly an increase from where we have been,” he said, noting he cut 25 percent of his work force over the past 18 months. “Everybody seems a lot more buoyant.”

Analysts don’t expect anything close to the record-breaking $88.7 billion worth of deals announced in Farnborough in 2008, but the gathering has already exceeded the slow orders for commercial planes at Le Bourget last year, where deals came in at around $7 billion.

The International Air Transport Association has forecast that global industry profits will reach $2.5 billion this year, an upturn from the huge $9.4 billion loss in 2009. Asia and North America are expected to lead the recovery, with Europe lagging behind. Strikes at some airlines, the debt crisis and the volcanic ash cloud that caused major disruptions this spring are all hurting Europe’s recovery.

The early orders, worth a total of $17.7 billion, included an Emirates deal to buy 12 Boeing 777-300ER jetliners, worth $3.6 billion at list prices. Boeing also received a $3 billion order from GE Capital Aviation Services for 40 737-800s.

EADS-owned Airbus picked up a $4.4 billion order from Air Lease Corp. for 20 A321 aircraft and 31 A320s, a $4.9 billion order from GECAS, General Electric’s commercial aircraft leasing arm, for 60 A320s. Russian flag carrier, Aeroflot, the only European airline to buy on Monday, ordered 11 of Airbus’ A330-300 aircraft, worth $1.7 billion.

Canada’s Bombardier, a rising challenger to Airbus and Boeing, received an order for three business jets from Qatar Airways in a deal worth $122 million.

Bombardier Commercial Aircraft President Gary Scott was cautious about the near-term outlook, saying that airlines needed to be sure they could sustain recent post-crisis gains before they had the “balance sheet and the courage to order airplanes in significant quantities again.”

“2011/12 is when the rising tide will lift all ships,” he said.