A pair of major new suppliers for Embraer’s next-generation E-Jets identified themselves last week in a sign that program advancement continues apace despite the airframer’s reservations about communicating any details about its plans for an industrial launch or even performance specifications.
Republic Airways Holdings
Embraer Commercial Aviation CEO Paulo Cesar de Souza e Silva said he sees requests for proposals coming from U.S. airlines for between 200 and 400 regional jets in the 70- to 76-seat market segment as relaxed scope clauses continue to drive demand on this side of the Atlantic while a “pause” in Europe takes hold.
Embraer expects to see substantial sales activity over the next few months involving 70- and 76-seat E-Jets as U.S. major airlines respond to relaxed union limits on regional jets among their regional airline partners, according to the manufacturer’s CEO, Frederico Curado.
India’s fastest growing and most successful airline–budget carrier IndiGo–has become the first victim of an October ruling by the country’s aircraft acquisition committee governing the number and kind of aircraft imported by airlines to encourage regional connectivity to smaller towns. In November the committee, led by civil aviation minister Ajit Singh, cleared for import only five of the 16 Airbus A320-series aircraft Indigo wanted to acquire.
Embraer’s waning E-Jet backlog received a welcome boost this week with a firm order for 47 seventy-six-seat E175s from Indianapolis-based Republic Airways. The deal, announced Thursday morning, includes options on another 47 of the airplanes, potentially raising its list-price value to $4 billion.
A new pilot contract ratified by the pilots of United Airlines on December 15 will open more opportunities for “large” regional airplane flying by United Express affiliates but likely result in another large-scale grounding of 50-seat regional jets. It also appears to signal a desire for United to add 90- to 120-seat narrowbodies in the category of the Embraer E190/195 and Bombardier CSeries CS100 some time after January 2016.
Republic Airways’ efforts to “restructure” its Indianapolis-based Chautauqua Airlines subsidiary appear to have yielded their intended results. During a November 1 conference call to discuss the company’s third-quarter earnings, Republic CEO Bryan Bedford reported that the regional airline holding company has found a way to mitigate future negative cash flows at Chautauqua by some $45 million over five years, largely by reaching new business agreements with several “key stakeholders ” and returning idled aircraft to revenue service.
Residual value guarantees, superior hot-and-high capabilities and “outstanding” launch customer incentives all contributed to a decision by Mexico’s second-largest airline to take a “calculated risk” on the Sukhoi Superjet 100, Interjet CEO Jose Luis Garza told AIN during a visit to New York last week.
Conditional labor contracts offered to employees of bankrupt American Airlines by its would-be merger partner, US Airways, provide for only marginal improvements over offers they have received through the bankruptcy process, according to US Airways chairman and CEO Doug Parker.
Unfazed by a fast-depleting order backlog, Brazilian manufacturer Embraer is betting on a sales surge in North America for its E-Jet airliners. This expectation is partly due to expectations of long-awaited reforms to U.S.“scope-clause” trade union restrictions based on aircraft size that currently prevent regional airlines from operating with crews from their associated mainline carriers.