Regionals Update: Embraer struck by new order deferrals

 - May 15, 2008, 8:40 AM

Milwaukee-based Midwest Express has informed Brazil’s Embraer that it wants to delay delivery of its Skyway subsidiary’s first ERJ-140 regional jets until January 2004, roughly a year later than originally planned. Midwest Express attributed its decision to the generally weak condition of the airline industry and its desire to concentrate on the introduction of new Boeing 717s into its mainline fleet. In November Skyway resolved a dispute with Fairchild Dornier over the cancellation of the German manufacturer’s 428JET program, leading to a follow-on order for four more 32-seat 328JETs. A year earlier Skyway threatened to sever its relationship with Fairchild and subsequently signed with Embraer for 20 ERJ-140s. Now flying nine of the high-wing Fairchild jets, the Milwaukee-based regional carrier awaits delivery of three more 328JETs and holds options for another 10.

Meanwhile, another high-profile Embraer operator last month revealed its decision not to renew the leases on 11 ERJ-145 regional jets and return the airplanes to their owners by the end of the year. Brazilian regional airline Rio Sul, a Varig subsidiary, plans to replace the lost capacity with Boeing 737-700s. It blamed the ERJ’s high lease costs for its decision.