Tuesday, October 3, 2017

SkyWest’s second E175SC order gives aircraft foothold in US market

SkyWest Inc. has placed a firm order for 20 Embraer E175s, including 15 in the “Special Configuration” (SC) model aimed at allowing US major airlines to contract capacity on 70-seat jets without sacrificing premium seats.

The order follows one last month for 25 E175s by Utah-based SkyWest, parent of SkyWest Airlines and ExpressJet Airlines. The September order included 15 E175SC aircraft that will be configured with 70 seats. The total number of E175SCs now on order is 30, all by SkyWest, the largest regional airline operator in the US.

All 30 E175SCs will be operated by SkyWest Airlines under contract for Atlanta-based Delta Air Lines. The remaining 15 E175s ordered by SkyWest in the past month will be operated under contract for Seattle-based Alaska Airlines in a standard 76-seat configuration.

Delta is maxed out at the number of 76-seat aircraft on which it is allowed to contract regional flying under a scope clause in its pilot labor contract, meaning regional aircraft added by the airline going forward need to be configured with 70 seats. But Delta did not want a standard 70-seat jet, such as the E170 or the Bombardier CRJ700, because that would mean removing business class and premium economy seats.

Embraer believes it has found a solution with the E175SC, which will allow airlines to operate a 70-seat aircraft with the same number of premium seats as a 76-seat aircraft.

“70 seats is where we see the bread and butter going forward” in the US market because of major airline pilot labor contract scope clauses regarding seat numbers, Embraer VP-North America sales and marketing Charlie Hillis told reporters last week at the Regional Airline Association (RAA) convention in West Palm Beach, Florida. “We knew that scope would be filled and we would not be able to sell many more 76-seaters. We knew we had a great airframe in the E175 … This hopefully is the replacement for the [aging] 70-seaters out there” in the US market.

The first E175SC will enter service in 2018.

The E175SC is being sold at E170 pricing, according to Hillis. SkyWest has the option in the future to retrofit the aircraft to seat 76 passengers. Under the terms of its contract with Embraer, SkyWest will have to go through Embraer to do the retrofit, the cost of which will bridge the gap between the price at which the aircraft was sold and standard E175 pricing, Hillis explained.

SkyWest president and CEO Chip Childs said the flexibility of the aircraft—giving it the option to retrofit to 76 seats—was appealing. SkyWest likes having the ability to switch to 76 seats and move the aircraft to another mainline partner airline in the future if necessary.

Delta “is very pleased with the product” because it will not have to sacrifice premium seats, Childs said.

E175s currently operating in the Delta network are configured with 12 37-inch pitch business class seats, 12 34-inch pitch premium economy seats and 52 31-inch pitch economy seats. Childs told ATW at the RAA convention that SkyWest E175SCs operated in the Delta network will keep the same number of business class and premium economy seats, but cut six economy seats.

Childs said there is “likely to be more interest in the [US] marketplace” for the E175SC.

(Aaron Karp - ATWOnline News)

No comments: