Why Embraer’s E-Jets will remain the job of US regional airlines until the 2030s

If you’re flying a regional jet in the US today, it’s probably on an Embraer E-Jet.

The E-Jet family — the E170 and E175, in particular — makes up about half of the 1,367 regional jets flying for Alaska Airlines, American Airlines, Delta Air Lines and United Airlines by the end of 2023, their fleet plans are displayed. Some of the more unusual models include Mitsubishi’s, as well as Bombardier’s, the CRJ family and the older ERJ family from Embraer.

The E-Jets are so popular — it helps that there is no competing aircraft in production — that American ordered 90 more E175s in March to complement the more than 240 already in its American Eagle fleet. Not bad for a plane that first flew more than 20 years ago.

“The 175-E1 is still the largest aircraft in the US,” said Arjan Meijer, president and CEO of Embraer Commercial, at an investor event in New York on Monday. “We believe there is a very large market waiting for us.”

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That market includes replacing older 50-seat jets, mainly CRJ200s and ERJ-145s, as they disappear from US skies. Delta’s subsidiary flew its last CRJ200 in December 2023, schedule data from aviation analytics firm Cirium Diio shows. United plans to phase out the 50-seat models at its subsidiaries in the next few years and in America by the end of the decade.

Meijer was unable to provide an exact number of planes that Embraer hopes to sell, as replacements for the 50-seat regional jets will not be one-off due to pilot contract restrictions. But, he said, the market for E175-sized planes is huge as many destinations across the US are too small for larger planes like the Airbus A320neo and Boeing 737 MAX families.

Regardless of the numbers, one thing is clear: US fliers can expect to see E175s in regular rotation in the 2030s — and possibly even into the 2040s.

This is both good and bad news for Embraer. While the continued sales of the E175 is a huge boon for the Brazilian plane maker, it comes at the expense of its next generation of E-Jets, known as the E2, which was built to replace the earlier models.

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According to the company, the E175-E2 offers double-digit fuel efficiency benefits over the E175, also known as the E175-E1, as well as more width and more seats. The revised aircraft seats 80 passengers, instead of 76, in the two-class configuration common in US states.

Despite those performance advantages, the E175-E2 has not received a single firm order from the US The lack of deals caused Embraer in 2022 to delay the certification of the aircraft to 2027 or 2028, at least three years later than planned.

The lack of interest is a result of tighter rules on Alaska, American, Delta and United’s pilot contracts. Those rules, known as “scope clauses,” govern the size and number of regional flights that major airlines can contract with affiliates. They currently cap the size of regional jets at 76 seats with a maximum takeoff weight of 86,000 pounds; the E175-E2 is much larger and heavier, seating 80 passengers and a maximum takeoff weight of 98,767 pounds.

“The E175-E1, being an incredibly powerful aircraft, creates its own need to not change the range clause,” Meijer said.

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Pilot contracts at Alaska, American, Delta and United that lock in current regional flight limits don’t come up for renewal until 2026 at the earliest.

The E175 that American and other airlines buy today is not the same plane that Embraer first flew in 2003. The addition of “wingtips” – angled extensions at the wing tips – in 2014 improved fuel efficiency by more than 6% compared to the original model with unchanged wings.

With continued sales of the E175 and E2 suspended, Embraer is in a holding pattern going forward in the regional jet segment. Work on a new turboprop that could seat up to 90 passengers is “deep freezer,” as Meijer puts it. And while research into other new technologies, including hydrogen fuel cell propulsion and electric vertical takeoff and landing (or eVTOL) continues, the planemaker has yet to set a specific path for its next commercial aircraft.

“We are really investing in new technology to maintain our readiness for new products,” Embraer CEO Francisco Gomes Neto said on Monday. “Right now, we don’t have a concrete plan to go this way or that way.”

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