Norway's Wideroe says may increase Embraer jet order

By Tim Hepher

ABERDEEN (Reuters) - Scandinavia's largest regional airline said on Thursday it aims to increase its order for E2 jets after it received the first of three new-generation aircraft from Brazil's Embraer to become its inaugural operator.

Wideroe's purchase of Embraer's <EMBR3.SA> upgraded E190-E2 marks its first foray into jets after decades linking communities near the Arctic Circle with turboprops. It has options to buy another 12.

"We will work extremely hard to ensure that we can receive the remaining 12," Chief Executive Stein Nilsen said during an Aberdeen stopover as the jet was being delivered to Norway.

He said Wideroe could also be interested in the smaller E175-E2, due to enter service in 2021 and currently prevented by union scope clauses from operating in the United States.

The boss of Norway's oldest airline shrugged off a potential offer by British Airways-owner IAG <ICAG.L> for budget carrier Norwegian <NWC.OL>, saying there was no direct competition with Wideroe which serves mainly small domestic airports.

"We are focusing on our niche," he told Reuters.

Embraer Commercial Aircraft CEO John Slattery said he sees "real and advanced" opportunities for sales as the E2 reaches its first operator, adding he would be disappointed if Embraer only sold as many of the overall family as it delivered in 2018.

The E190-E2 is the first of three new-generation aircraft in Embraer’s commercial jet line-up with new wings and Pratt & Whitney <UTX.N> engines aimed at improving fuel efficiency.

Embraer is also expanding the size and range of its largest commercial jet, the E195, whose upgraded E2 version enters service in 2019, posing a challenge to Bombardier's CSeries.

Embraer expects a market for 6,400 jets in the 70-130 seat segment over the next 20 years.

"The pipeline of opportunities is as robust as I've seen in seven years at Embraer," Slattery said. The Brazilian company has gone through a slow patch in sales of the E2 model.

He declined comment on reports Embraer is close to agreeing the sale of its commercial arm to Boeing <BA.N>.

EXPANSION PLANS

Wideroe, which once linked rural networks with former owner SAS Scandinavian Airlines and is now run independently under a consortium of investors, plans to introduce the jet on April 24.

It will replace Bombardier <BBDb.TO> Q400 turboprops on some routes and will hold 114 passengers in a single-class layout.

Nilsen said fewer domestic airports and sharp rises of up to 70 percent in airport fees had prompted Wideroe to scale up from smaller despite harsh winter conditions in Norway.

"It has been a real challenge to further the route developments in thee rural areas of Norway," he said.

Wideroe however plans to expand international flights and rent out some of the new jets with crews to carry passengers on behalf of Finnair <FIA1S.HE>.

(Reporting by Tim Hepher; Editing by Alexandra Hudson)