Republic anticipates difficulty winning United E-175 contract

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Republic Airways anticipates difficulty winning the contract to operate United Airlines' new Embraer 175s due to its on-going labour negotiations.

The Indianapolis-based regional carrier is still awaiting a vote by its International Brotherhood of Teamsters (IBT)-represented pilots on its last, best and final offer that it presented to the union earlier this year, says Republic chairman, president and chief executive Brian Bedford during an earnings call today.

"Until we have greater clarity on our labour costs it will be very difficult for Republic to compete for any new business," he says.

Chicago-based United announced an order for up to 70 76-seat E-175s from Embraer with deliveries in 2014 and 2015 on 29 April. It is split between 30 firm orders and 40 options. The airline said that it would select an operator at a later date.

Republic and its subsidiary Shuttle America are the largest operators of the E-170 and -175 family of aircraft in the USA, with 126 of the 168 in service, according to Flightglobal's Ascend Online database. Trans States Airlines-subsidiary Compass Airlines operates the remaining 42 aircraft.

The carrier won a tender in January to operate 47 E-175s for American Airlines under an eight-year capacity purchase agreement.

A contract vote that was planned for late February was postponed when the US National Mediation Board (NMB) convened a meeting between Republic and the IBT in March, says Bedford. He says that the parties remain "far apart" in terms of the economics of the new agreement and that he hopes that the union will allow Republic's pilots to vote on the offer soon.

Bedford says that Republic anticipates ratification of a new contract with its flight attendants by August.