By Tim Seymour
Embraer (ERJ) is about to announce another larger-than-expected customer order that will continue a re-rating process on the stock. A quick review of our updates on ERJ over the last two years illustrates our view that this is one of the best-run companies in the world, and a leader in technology.
Embraer is a charter member of the "Ambassador’s Index." Today, SkyWest (SKYW) has agreed to purchase 100 new E175 dual-class regional jet aircraft from Embraer, along with another 60 conditional orders. The potential size of this deal is $4.1 billion. This should increase its order book backlog by 30%, and deliveries are expected to begin in the second quarter of 2014 and continue through mid-2015.
SkyWest will operate Embraer 175s under the United Express brand. This deal was not expected to come until later in the year, and is also larger than expected.