Embraer Removes 100-unit SkyWest Order from E2 Backlog

 - October 30, 2018, 12:23 PM

Sending another signal that hopes for a relaxation of U.S. airline pilot union scope clauses have dimmed, Embraer has removed from its backlog an order for 100 E175-E2s from Utah-based SkyWest, the manufacturer confirmed Tuesday. However, the terms of the order, placed in 2013 upon the program’s launch, have not changed, said Embraer CFO Nelson Salgado during the company’s third-quarter earnings call with investment analysts.

The removal of the 100 aircraft from the order backlog comes soon after the cancellation of an order for 24 E190s by JetBlue, which opted instead to replace its current fleet of E190s with Airbus A220s. The two moves together contributed to a reduction in Embraer’s backlog from $17.4 billion at the end of June to $13.6 billion at the end of September.

The uncertainty about the SkyWest order derives from restrictions written into the pilot contracts of the three major U.S. airlines that effectively limit the maximum takeoff weights of the airplanes flying for their regional affiliates to 86,000 pounds. Although both the E175-E2 and the Mitsubishi MRJ90 can meet the 76-seat capacity limitations in those scope clauses through configuration in a two-class cabin layout, neither airplane can meet the mtow limits, effectively disqualifying them from use by U.S. regional airlines.

Embraer, which claims an 85-percent share of the 76-seat market in the U.S., continues to advertise the current GE CF-34-powered E175 as a cost-effective alternative to the E2 in the U.S. For its part, Mitsubishi has said it believes the smaller of its two MRJ variants, the MRJ70, will fill the need for 76-seat lift in a single-class configuration. It does not expect that airplane to reach the market until 2022, however.

Mitsubishi, in fact, has placed more emphasis on improvements to the smaller variant as pilot unions appear unlikely to relax the weight limitations in the next round of bargaining. “We are operating under the assumption that fundamentally there will be limited change [to scope clauses],” conceded Mitsubishi MRJ chief development officer and head of program management Alex Bellamy in a recent interview with AIN.