News from PAS 2013 today was eye popping; 100 E175-E2 is no small launch. One looks at this order, and keep in mind last year’s Farnborough order for 100 MRJs, firmed up at the end of 2012, and then does that leave space for anything else?
At last year’s Farnborough show the MRJ order by the airline, notably absent at the announcement was any airline management. This year the airline’s CEO is at the show and present for the Embraer order.
SkyWest is a big airline – far bigger than most people realize. It has a fleet of 750 aircraft. The two big orders now account for at least 200 (27%) of that fleet’s replacement. Is it over?
We spoke with Skywest’s CFO Mike Kraupp and he said it might be. Might, because they buy aircraft based on their major airline partner needs. For example, United and American Eagle both requested SkyWest to go for the Embraer airplane. He went to explain that as the airline was going through its replacement evaluations they looked at Bombardier, Embraer, Mitsubishi and Sukhoi. Sukhoi was deselected soon into the process. According the Mr Kraupp, Bombardier “lacked interest” and the CSeries was out of scope for the airline but of interest from Bombardier. Deciding on the MRJ and E2 means some engine commonality.
This means that unless an airline partner requests a Bombardier airplane, SkyWest is focused on Embraer and Mitsubishi. SkyWest likes the economics of these two airplanes. Mitsubishi was “aggressive” last year to win the business and Embraer “stepped up” this year. Bombardier could come back if an airline partner secures a deal that SkyWest can work with.