FARNBOROUGH, England (Reuters) - U.S. regional carrier SkyWest Inc has reached an agreement to buy 100 Mitsubishi Regional Jets in a deal with a potential value of $4 billion at list prices, the companies announced on Wednesday at the Farnborough Airshow.
Brad Rich, president of SkyWest Inc, said a majority of the Mitsubishi jets would be used to replace aircraft. His company has about 725 planes.
“We’re trying to be very proactive in two ways,” Rich said. “We’re trying to use our size and our volume to restructure and recreate an aircraft model that will deliver more of what our major partners are requiring today and trying to combine that with the new technology that is coming on to market.”
Under terms of the deal, Mitsubishi Aircraft would start delivery of the jets in 2017 and complete them in 2020. The MRJ, a family of 70- to 90-seat jets, is the first new airliner produced in Japan in nearly 50 years.
Mitsubishi Aircraft Corp is financed by companies including Mitsubishi Heavy Industries and Toyota Motor.
SkyWest shares shot up 15 percent to $7.91.
The agreement is also a boost for the Pratt & Whitney unit of United Technologies Corp, whose geared turbofan engines will power the Mitsubishi jets.
SkyWest operates as United Express and Delta Connection under agreements with United Continental Holdings and Delta Air Lines.
Brokerage firm Raymond James raised its rating on SkyWest to “outperform” from “market perform,” citing growth opportunities for the company.
Reporting by Karen Jacobs; Editing by Mark Potter and Sofina Mirza-Reid