Thursday, May 08, 2014

United Airlines replacing small jets with bigger ones - The new Embraer 175s will not initially be used on Newark routes

There is hope for travelers who on occasion must try to cram a carry-on into one of the undersized bins in 50-seat United Express regional jets.

Dozens of those snug aircraft will be replaced over the next 1 1/2 years by roomier Embraer 175s, which have 76 seats, including 12 in a first-class section, as well as larger overhead bins, United said.

The E-175 offers "more personal space and wider seats and aisles than other regional jets," said Charles Hobart, a United spokesman. "It's a better customer experience."

United has firm orders for 70 of the aircraft built by Brazilian manufacturer Embraer, with 40 to be operated by Utah-based SkyWest Airlines and 30 to be operated by Mesa Airlines, all under the United Express banner.

Hobart said SkyWest will put the first one in service on May 17 on a route between Chicago O'Hare and Ronald Reagan Washington National airports. Another aircraft goes into action on June 23 between O'Hare and New York's La Guardia Airport.

"This aircraft will eventually serve Newark," said Hobart, but he did not know when.

United Chief Executive Officer Jeff Smisek mentioned in a recent earnings conference call the rollout of the new regional jets as an example of steps being taken to improve cost efficiency after a disappointing first quarter, in which the airline lost $448 million.

"This is an industrywide phenomena, the up-gauging of aircraft," said Kevin Crissy, analyst with Skyline Research in Mahwah.

For commercial carriers, the economics of operating small jets has changed with higher fuel costs. "A 50-seat plane works better at $30 per barrel crude," Crissy said.

Also, as airlines have improved efficiency of reservation systems and have gotten better at filling every seat, it often makes economic sense for carriers to swap smaller planes for larger ones, Crissy said.

The smaller aircraft have been used for short-haul service to help passengers make connections at hubs and for shuttle service to certain cities.

The E-175 has been a hot seller for Embraer. In the first quarter alone, the Brazilian company delivered 195 of them to airlines throughout the world. These included 78 to Indianapolis-based Republic Airways.

American Airlines announced in December it had signed firm orders to buy 60 E-175s. Embraer has put the value of those orders at $2.5 billion.

American also said it had ordered 30 76-seat Bombardier CRJ900 "NextGen" aircraft, valued at $1.42 billion, with options to buy up to 40 more.

The E-175s, which have General Electric engines, burn less fuel per seat than the 50-seat E-145s, Hobart said. The E-145s have Rolls-Royce engines.

At United, upsizing of regional jets required a concession from the pilots' union, which had negotiated limits on the size of aircraft that can be flown by lower-paid counterparts at regional partner airlines.

"In the latest contract, United and our pilots agreed that the regional pilots could operate 76-seat aircraft, whereas previously the limit was 70-seat aircraft," Hobart said.