The E175-E2 is a next-generation regional jet from the Brazilian aircraft manufacturer Embraer. Providing better economics and passenger experiences than the previous generation of aircraft with an extensive range that can make many new routes viable and increase margins on existing E175-E2 routes. However, the aircraft has not sold well in the United States, and much of the reason is not Embraer’s fault.
The Embraer E175 is a popular aircraft
Major US airlines have contracts with regional carriers to fly smaller jets at a lower cost than what it would be for a major carrier. One of the most popular regional jets is the 70 to 76-seater Embraer E175.
For example, from the most recent filings, the following US airlines had contracts for the following numbers of Embraer E175 aircraft:
- Alaska Airlines: 62 Embraer E175s
- American Airlines: 173 Embraer E175s
- Delta Air Lines: 109 Embraer E175s
- United Airlines: 190 Embraer E175s
According to Embraer, across North America, the manufacturer’s aircraft make up over 80% of the regional jet market seating 70-90 passengers with over 550 aircraft placed with airlines in the continent.
Why the Embraer E175-E2 has not sold well
As stated above, major US airlines have contracts with other airlines that govern regional flying. Airlines also have agreements with their pilots that include scope clauses, which is one of the main reasons for low Embraer E175-E2 sales, and the aircraft is delayed until 2023.
The scope clauses limit the size of aircraft that regional carriers can fly under contract. This caps out seats at 76 and a maximum takeoff weight (MTOW) that sets the largest jets regional carriers can operate as Embraer E175s or a Mitsubishi CRJ900 (formerly Bombardier CRJ900).
When Embraer designed the E175-E2, it went with heavier engines. Those engines are more fuel-efficient and give the aircraft the improved economics over the Embraer E175s that the airline advertises, among other improvements. Those heavier engines push the E175-E2 out of scope.
Embraer casts the scope clauses as being a barrier to E175-E2 sales and environmental improvements. The aviation world is consistently moving toward more environmentally friendly operations through lower fuel burn, among other improvements, and next-generation aircraft are a central component of reducing emissions from aviation.
In 2013, SkyWest, one of America’s most prominent regional carriers, placed an order for 100 new Embraer E175-E2s with options for another 100 of the type. However, that order remains in flux as there is little reason for SkyWest to take the aircraft if it cannot fly the planes under contract.
Will airlines and pilots alter scope clauses?
In general, any changes to scope clauses require negotiations, and that takes time. Unfortunately, there does not appear to be a major push for airlines to renegotiate their scope clauses to include the new Embraer E175-E2.
Embraer’s E175 is already a hot seller, and a next-generation aircraft would also be set up for success. In addition, the improved range and efficiency could work wonders for network planners who already adore the efficiency and abilities of the Embraer E175.
Airline pilots would likely be worried about the potential for more flying to be outsourced. There are methods that pilots can have inserted in scope clauses that could limit things such as the length of routes that the E175-E2 could operate and continue to cap seating capacity on the aircraft to around 70 to 76 seats.
Do you think US airlines should renegotiate their scope clauses to include the E175-E2? Which carriers would you want to order the type? Let us know in the comments!
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