Embraer’s E-175 wins a small, but key, order

The E-170/5 is the best-selling Embraer aircraft. Based on ch-Aviation fleet data, 773 of these aircraft are in active status as of today. But this number is nuanced. Look at this chart. [caption id="attachment_78057" align="alignright" width="443"] Source: ch-Aviation[/caption] Of the 773 active aircraft, 83% are in the United States. The mishmash smudge at the top of the chart are markets with single-digit fleets. These markets amount to 10%. If we add Canada to the US, this accounts for 86% of the active fleet. The E-170/5 fleet is the de rigueur regional jet in North America. And this means that the story of the E-170/5 fleet is written in the US. Irrational rules like the Scope Clause are the reason for this. We have covered this issue several times. All of which is to say, the story of Embraer is about the tremendous success of the E-170 and its successor, the E-175. But for Scope Cluase, Embraer developed the next successor, the E175-E2. The E175-E2 will never enter commercial service because of US restrictions. Unless, by some miracle, Embraer can persuade the Indians to build a FAL to manufacture them. It would be an excellent aircraft for the growing Indian regional market. Can BRICS save this aircraft? It could happen. Meanwhile, here is what the active E-170/5 fleet looks like by variant. [caption id="attachment_78056" align="aligncenter" width="202"] Source: ch-Aviation[/caption] The E-170-200 is also known as the E-175. As the table clearly shows, this is the best seller. And that is why we hear today that American has ordered another four for its Envoy regional. The PR note states: "American Airlines has signed a firm order with Embraer for four new E175s. The aircraft will be operated by American’s wholly owned subsidiary, Envoy Air. With all deliveries in Q4 2024, Envoy’s all E-Jet fleet will grow to over 150 aircraft by the end of 2024. The contract value is US$230.6 million at list price, and will be included in Embraer’s 2023 Q4 backlog. “These new jets will allow us to continue growing with American Airlines. We’re pleased to announce these additional four aircraft, following the order announced in June, as the US domestic and regional markets recover from a very challenging few years. The E175 allows us to provide an excellent and reliable service to American Airlines and the thousands of guests we serve everyday”, said Pedro Fábregas, President & CEO of Envoy. “This new order demonstrates once more the importance of the E175 to connectivity across the United States, and is another sign that the challenges the market has been facing are improving,” said Martyn Holmes, CCO, Embraer Commercial Aviation. “The E175 is the backbone of the US regional network, with over 620 aircraft sold, and 86% market share since 2013. We thank American Airlines and Envoy for their long partnership with Embraer.” The E175 entered service in North America in 2005, and has since come to dominate the sector, due to its comfort, high performance, and efficiency. Customers like Embraer’s trademark two-by-two seating, meaning no one must endure a middle seat. To date, the worldwide E170/E175 fleet has accumulated over 19.5 million flight hours with Envoy having flown 1.3 million of these hours." Embraer's San Jose dos Campos facility will keep making E-175s as long as customers order them. Embraer has no competitor for newly built aircraft in the segment. As the older CRJs are retired, E-175s will take their place. Russian and Chinese aircraft in the segment can't match the customer support, economics, and performance. Even if this order is small, it comes from a major airline. A customer that is doing a repeat order, again. For Embraer, this is very important. Because it sends a signal to airlines globally that it produces excellent aircraft. The E-175, being a best seller, boosts the rest of the E-Jet family. Which is just what Embraer wants to market to hear. Four aircraft reaffirm Embraer's good name.

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