Today, Embraer announced that it has rescheduled the start of operations of the E175-E2 by one year to 2024. This announcement implies that the type will start commercial services five years after it made its maiden flight. Nevertheless, there’s still a long way to go before the E175-E2 is successful. Let’s investigate further.
Once again, the E175-E2 is pushed back
In August 2020, Embraer confirmed the first delay in the development of the E175-E2. As a result of the global COVID-19 pandemic and several downturns, Embraer set a new date of 2023. The original date was 2021’s second half.
Move forward almost nine months later, and Embraer has once again changed its plans. The aircraft manufacturer said,
“Given the current market conditions for commercial aviation, Embraer has rescheduled the start of operations of the E175-E2 by one year to 2024.”
Plus, Antonio García, Embraer’s Chief Financial Officer, said,
“We rescheduled the entry into service for the E175-E2 to 2024 from 2023 because we don’t expect a scope clause change in the US in the next few months”.
In the meantime, the company will continue the certification work on the aircraft, although on a newly revised timeline. Embraer will continue to offer its best-selling aircraft, the E175, of which it has delivered over 660 units to date. Embraer also has an order book of 132 E175 planes.
The E175-E2 first flew in December 2019. In those pre-pandemic days, Embraer already faced enormous pressure to make this new-generation commercial aircraft a success, and since, the pressure has only increased.
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No sales for the E175-E2
Unlike its predecessor, the E175-E2 is not a best-seller as it stands. Actually, it has zero sales since the project was launched, along with the broader E2 line, in 2013.
Embraer has only one possible buyer for the E175-E2 at the moment - US carrier SkyWest. This airline signed an order for 100 E175-E2 planes in 2013. Nevertheless, Embraer is not listing the order on its backlog due to uncertainty.
While the E175-E2 is a magnificent plane, major US airlines have contracts that govern regional flying. Airlines and pilots have scope clauses that limit aircraft size that regional airlines can fly. Therefore, Delta and American (airlines that work with SkyWest) must reach a new agreement with its unions before it can get its E175-E2 order, as reported by Reuters.
What can Embraer do to push the E175-E2 sales?
In 2019, then-Embraers CEO, John Slattery, said that each of the three models of the E2 program would account for about one-third of the sales. That means 33% for the E175-E2, 33% for the E190-E2, and 33% for the E195-E2.
Fast-forward to 2021, and the E195-E2 is clearly the best-seller among the three. According to Embraer’s latest results, it has delivered 17 E190-E2 and has a firm backlog for five more units. Meanwhile, 19 E195-E2 are already in service, and Embraer has orders to develop further 164 planes.
For the E175-E2 to succeed in the US, Embraer requires the airlines and pilots to renegotiate their Scope Clauses. Worldwide, Embraer needs the aviation industry to recover from the COVID-19 pandemic. Both are big 'ifs' at the moment.
The E175-E2 has a solid case to succeed in the post-COVID world. Compared to the original E175, the E2 variant offers fuel savings of 16% and reduced maintenance costs by 25%. It also provides more capacity, offering between 80 and 90 seats.
The aircraft has a range of 2,000 nautical miles (3,704 kilometers) and 75% brand new systems, which allows reduced CO2 emissions, noise and maximizes operational efficiency for airlines.
Why is the E175-E2 not selling so far? Tell us your reasons in the comments.