Additional ERJs Split Between Republic And Chautauqua

PHOENIX, Ariz. - Republic Airways Holdings has ordered 12 Embraer ERJ 145LRs for distribution between its two wholly-owned subsidiaries, Chautauqua Airlines and newly created Republic Airlines. The $240 million contract was announced at the Regional Airline Association (RAA) annual conference held here last week.

Nine of the aircraft will go to Republic, based in Louisville, Ky. The remaining three will be assigned to Chautauqua, based in Indianapolis. Four of the 12 aircraft will be delivered by October, with the remaining eight delivered at a rate of two per month, pending financing arrangements for the eight aircraft.

Chautauqua already operates a fleet of 71 Embraer regional jets (RJs), including nine ERJ 135s, 15 ERJ 140s and 47 ERJ 145s. The nine RJs for Republic will be the first of up to 23 the airline will acquire in preparation for its service launch this October.

Bryan Bedford, chairman of Republic Airways Holdings, said that the Republic order is part of US Airways' "Jets for Jobs" program, meaning that 50 percent of the pilots assigned to fly the new aircraft will be furloughed US Airways pilots. He also noted that by the time all 23 aircraft arrive, around 190 new pilots will have been hired.

Mauricio Botelho, president and CEO of Embraer, told reporters at the conference that "Republic's growing operations represent one of the great success stories in the United States regional airline market, and we are very proud of our continuing relationship with Republic. It is important that this announcement is being made at the RAA convention as this is yet another indication of the strength of the regional market that continues to lead the recovery of airline travel in the United States."

Republic Airways Holdings holds options on an additional 50 ERJs; these options can be exercised beginning in third quarter of next year through fourth quarter 2006.

US Airways President and CEO David Siegel discussed the recent order for the Embraer 170 (C/R News, May 19), saying that it will be a foundation of growth for his airline. "The trend in the regional market is to larger aircraft with mainline-like cabins. This aircraft will be the backbone of US Airways Express fleet going forward." The Alexandria, Va.-based airline announced an order early this month for 85 Embraer 170 jetliners. It also has options on 50 70-seat Embraer 170, which can be upgraded to the 76- seat Embraer 175 as needed, plus 140 options for the ERJ 145.

Siegel noted that US Airways has over 100 large aircraft that will be nearing the end of their useful life over the next five years. The Embraer 190/195 "is very attractive" as a competitor to Boeing aircraft. He also said that MidAtlantic, a division of US Airway, could "flow right up" from the 170/175 sized aircraft "to mainline 190/195" sized aircraft. Staying with the same manufacturer "is a good thing," he said. While no decision has been made, it is very much a consideration to have the same family of aircraft.

The MidAtlantic Embraer 170s will be operated in a dual-class configuration. Bruce Ashby, president of US Airways Express, said that the dual-class configuration was "very important" as a service product. The 170 is a "business market airplane," with a large number of passenger transferring to or from the first class section of the mainline carrier and expecting the first class service.

Botelho said Embraer expects to get Joint Airworthiness Authority (JAA) certification for the 170 in June, followed by Federal Aviation Administration (FAA) certification in September in time for the first delivery to MidAtlantic in November. The first 170 delivery will be to Alitalia Express in late August. The first 175 is expected to fly next month. Certification is planned for mid-2004. Following acceptance of its first Embraer 170 in November, MidAtlantic will receive three per month through September 2006.

Botelho noted the decrease in orders for the 170 by Swiss in March (C/R News, March 31), but said that Embraer still intends to deliver 132 aircraft this year and 136 in 2004. He said that Embraer is "delighted to be working with US Airways as they accomplish a new path, open up the industry and help put an end to the restrictions that have plagued the US airline business for so long."

CRJs To Replace PSA 328 Turboprops

In discussing the introduction of the newly ordered Bombardier CRJ 200s being delivered later this year to PSA, a wholly-owned subsidiary of US Airways, Ashby said that they would be used to phase out PSA's 328 turboprop fleet. All of PSA's turboprops "should be out of the fleet within the next couple of years," he said.

The delivery of the CRJs should also help reverse the negative traffic growth trend that US Airways Express has been experiencing for the past several months. Ashby said that the Express carriers have started reducing their fleets, thereby cutting down available seat miles (ASMs). The huge number of new regional jets now on order "should lead to positive growth," he said.

US Airways has ordered 60 CRJ 200s and 25 CRJ 700s for its Express carriers as part of the 170 aircraft order split between Bombardier and Embraer.

>>Contact: Doug Oliver, Embraer, tel: 954-359-3414, e-mail: doliver@embraer.com<<