Recent vintage Bombardier CRJ900s and Embraer 175s dot the ramp at Ronald Reagan Washington National airport, the result of the last wave of pilot contract changes at US mainline carriers. But the limits of those contracts are already posing a problem for the next generation of large regional jets.

American Airlines, Delta Air Lines and United Airlines are driving the shift. All three are reducing the number of 50-seat regional jets in their feeder fleets and replacing them with the 76-seat models that are becoming ubiquitous at airports like National across the USA.

The shift is almost entirely economic. Executives from all three carriers cite efficiency improvements, additional ancillary revenue opportunities and passenger preference for the move to larger aircraft.

“Our continued progression to more modern, consistent, fuel-efficient and larger-gauge regional aircraft will improve the operational and revenue performance of our Express operation while substantially improving our product offering,” said James Compton, chief revenue officer of United, in October 2014. “For each 50-seat aircraft an E175 is replacing, we expect to generate over $1 million of annual improved profitability.”

American, Delta and United, in conjunction with their regional partners, have either added or ordered 340 CRJ900s and E175s since December 2012 with deliveries through 2017. They will have removed 447 aircraft with up to 50-seats by the end of this year.

While executives from both Bombardier and Embraer anticipate up to 200 more orders for the current generation of 76-seat jets from US carriers over the next few years, the stage is set for the introduction of the next generation of regional jets in 2017.

St Louis-based Trans States Airlines is scheduled to take delivery of its first Mitsubishi Aircraft MRJ90 in the second half of 2017 and Utah-based SkyWest Airlines its first of the type less than a year later in 2018 under the current delivery schedule. SkyWest will then take the first E175-E2 in 2020.

There is just one hitch – none of the pilot contracts at American, Delta or United will allow for either aircraft.

The issue is size and weight. Contracts at all three carriers cap the size of regional aircraft at 76 seats, with a few exceptions grandfathered in from prior contracts, with a maximum takeoff weight (MTOWs) of 39,010kg (86,000lb).

The MRJ90 will carry 81 to 84 seats in the dual-class configuration popular with US carriers with a MTOW of 39,600kg, while the E175-E2 will carry 80 seats in a dual-class configuration with a MTOW of 44,650kg.

The driver of that additional weight, at least on the E175-E2, is the geared turbofan engines. Embraer anticipates a roughly 16% fuel burn savings over the current E175 with the Pratt & Whitney PW1700G engines as well as a new wing.

“No product with those new engines can bring those benefits without the higher weight,” said an Embraer executive during a visit to the airframer’s factory in São José dos Campos, Brazil, in February.

The clean-sheet MRJ uses the PW1200G geared turbofan engine.

“We believe the MTOW limitations could be relieved to some extent, or the airlines and the passengers cannot enjoy the next generation aircraft,” says Masao Yamagami, chairman and chief executive of Mitsubishi Aircraft America. He adds that he is “optimistic” about the prospects of the MRJ90 in the USA.

Embraer Commercial Aviation president Paulo Cesar Silva said in February that the airframer is “hedging” on the needed contract changes with its E175-E2 but added that he is confident on its prospects.

Delta’s pilot contract is the first to come up for renewal. Negotiations between the carrier and its chapter of the Air Line Pilots Association (ALPA) are already underway ahead of a 31 December expiration date.

Embraer, Mitsubishi, SkyWest and Trans States are all watching the negotiations at Delta closely, their executives say. The mainline carrier set the 76-seat standard for the current round of regional fleet changes in its last pilot contract in June 2012 and could do the same with its next contract.

United’s pilot contract becomes amendable on 31 January 2017 and American’s contract on 1 January 2020.

Both Delta and the carrier’s chapter of ALPA decline to comment on the scope restrictions and the potential for next generation of regional jets in the Delta Connection fleet.

Labour, or at least an airline’s relationship with it, will ultimately be the deciding factor on the necessary scope changes. Delta is seen as having a good relationship with its pilots but other carriers may not be in the same position.

“APA will not agree to any scope concessions,” said the leadership team of the Allied Pilots Association (APA), which represents pilots at American, in a joint letter to members during their last round of contract negotiations in October 2014. The comment followed a proposal by the Fort Worth, Texas-based carrier to change the definition of large regional jet to ones with 71 to 76 seats, which would have allowed for roughly 81 more aircraft than under a previous memorandum of understanding, during already contentious contract talks last fall.

A union spokesperson says their position is unchanged. Referring to the E175-E2, they add: “I have great expectations that Embraer will sell a lot of those airplanes, they’re just going to be flown by mainline pilots.”

“If and when we go down that path, given if there’s a change in scope, we’ll consider it at that point,” said Peter Warlick, vice-president of fleet planning at American, referring to the MRJ and the E2 in February.

ALPA’s national leadership joins the Delta chapter declining to comment on the issue.

There is an air of inevitability around the induction of the MRJ and E175-E2 into US regional fleets. Manufacturer and regional airline executives agree that the scope changes are necessary for the sector to make further efficiency and performance gains.

“I believe that the marketplace sees value in the technology and efficiency of this asset but they’re painfully aware that they’ll need scope relief, especially on the weight side, to make this a reality,” says Richard Leach, president of Trans States Airlines-parent Trans States Holdings.

He sees the push for scope relief gaining momentum once the MRJ90 – and later the E2 – takes to the skies, something that is first expected this September or October.

“We’ve got to get it to market and be able to fly it,” says Leach.

Embraer’s Cesar echoes this position, saying he believes that there will be some scope relief just “not now, maybe in two years or three years time”.

The mainline carriers are interested in both next generation regional jets, even if they are vague like American’s Warlick on the matter.

“We’ve talked to all of our partners about the assets – they have varying degrees of interest – and that’s good,” says Leach.

Trans States, which also owns Compass Airlines and GoJet Airlines, operates regional services for American, Delta and United. It has 50 firm orders and 50 options for the MRJ90 and a letter of intent for 50 E175-E2s, the Ascend Fleets database shows.

SkyWest president Chip Childs said in October that they are “actively engaged” with their four partners – Alaska Airlines, American, Delta and United – on the topic of fleet replacement. “Scope continues to be the largest piece of that conversation,” he added.

Replacing 50-seaters is likely to remain the focus of US mainlines for the next few years. American, Delta and United will have roughly 636 such aircraft in their regional fleets at the end of this year, their respective fleet plans show. It is reasonable to estimate that roughly half – if not more – of these could be removed and replaced with either 76-seaters or next generation regional jets during the next five years.

The replacement of ageing 70-seaters is another possible opportunity for the new models. The US fleet of both Bombardier CRJ700s and Embraer 170s will have an average age of 12 years when the MRJ90 enters service in 2017, Ascend shows.

United has already begun removing CRJ700s from its feeder fleet in favour of 76-seaters. It plans to remove 15 of the Canadian regional jet for a remaining fleet of 100 by the end of this year.

“All the majors are aware of the weight of the MRJ and the E2 and the limits that exist because of that,” says Leach. “I think they’ll choose when the timing is right for that to be an item of negotiation.”

Source: Cirium Dashboard