Embraer Finalizes Orders from Republic Airways and Azul

 - December 20, 2018, 12:58 PM
Finalizing a letter of intent announced at the Farnborough airshow, Embraer has signed a contract with Republic Airways for a firm order for 100 E175s. Deliveries are scheduled to begin in the second half of 2020. (Photo: Embraer)

Embraer has signed a contract with U.S. regional airline Republic Airways for a firm order for 100 E175s and with Brazil’s Azul Airlines for 21 E195-E2 jets. The deal finalizes the letters of intent that were announced at the Farnborough Airshow in July. The two sizable E-Jet orders will help the Brazilian aircraft manufacturer to achieve its goal to finish 2018 with a book-to-bill of around 1.5 and recover the backlog, which declined from 360 commercial jets as of mid-year to 251 at the end of September.

Embraer removed 123 aircraft from the backlog—including 100 E175-E2s earmarked for SkyWest and 24 E190s ordered by JetBlue Airways—in the third quarter. The SkyWest order was removed due to the contract's conditionality terms related to the scope clause.

The contract with Republic Airways, the world’s largest E-Jet operator with a fleet of about 190 E170/175s, also includes purchase rights on a further 100 E175s with conversion rights to Embraer’s E175-E2 platform. Deliveries will begin during the second half of 2020. 

John Slattery, president and CEO, Embraer Commercial Aviation, said the order is "a great way to finish this very hectic year at Embraer.” 

Republic's president and CEO Bryan Bedford said the order for up to 200 E-jets positions the airline “to capitalize on growth opportunities we see developing over the next five years, as more than 300 regional aircraft flown by our competitors reach their natural expiry.” The regional airline, based in Indianapolis, Indiana, offers scheduled passenger service with approximately 950 daily flights to 100 cities in 40 U.S. states, Canada, the Caribbean, and Central America. It provides fixed-fee flights operated under its major airline partner brands of American Eagle, Delta Connection, and United Express.

The Azul contract is in addition to the 30 E195-E2 jets ordered by the airline in 2015, raising Azul's total order to 51 Embraer E2s. Azul is the launch operator of the E195-E2 and will receive the first aircraft in 2019.

Embraer is in the process of selling 80 percent of its commercial aviation business to Boeing, but the proposed tie-up suffered another setback after a Brazilian judge issued his second injunction suspending the deal in response to a class action filed by Embraer's union in São Jose dos Campos, Brazil Economico and Reuters reported on Thursday. Embraer did not reply to AIN’s request for confirmation. The first injunction, by the same federal judge in São Paulo, was overturned by a Brazilian appeals court a couple of days later. Embraer and Boeing released details of the proposed transaction earlier this week.