Thought this press release should go here given the thread title. After I posted it I realized this was the sick thread so sorry for trying to change the subject but...

SAO JOSE DOS CAMPOS, Brazil, Oct. 21, 2015 /PRNewswire/ -- Embraer and SkyWest, Inc. (SkyWest) have signed a firm order for an additional 19 E175s jets. The aircraft will be flown by SkyWest Airlines, Inc. a wholly-owned subsidiary of SkyWest, under a Capacity Purchase Agreement (CPA) with Delta Air Lines. The transaction will be included in Embraer's 2015 fourth-quarter backlog. Delivery of the first aircraft is expected for the third-quarter of 2016.
"We thank SkyWest for the continuous trust in Embraer and its products," said Paulo Cesar Silva, President & CEO, Embraer Commercial Aviation. "This partnership has been very successful and we look forward to it continuing for many, many years."

All the E175s will be configured in a dual class 76-seat layout, equipped with 12 First Class seats, 20 Delta Comfort+ seats, and 44 Main Cabin seats, and will operate under the Delta Connection brand.

"We remain impressed with Embraer's E175 product and are pleased to advance our Delta partnership with these aircraft," said Chip Childs, SkyWest, Inc. President.

The E175s feature a new wingtip that, among other technical enhancements, improves aerodynamic performance. Fuel consumption on a typical flight is 6.4% lower than first-generation E175s. In North America, the E175 is the preferred aircraft of carriers operating 76-seat jets. Since 2013, the E175 has captured over 80% of orders among aircraft in its class from airlines in the United States.

Embraer is the only manufacturer to develop a modern family of four airplanes specifically targeted for the 70- to 130-seat segment. Since the formal launch of the program in 1999, the E-Jets have redefined the traditional concept of regional aircraft by operating across a range of business applications. The first E-Jet entered revenue service in 2004.



Not sure about Brazil, but in the US to account for these this way you have to show the transaction was material to the quarter. That means payments have already been received or this is may be a part of a larger order that has dates of obligation within the quarter.

 

As an aero engineer, I find it amazing that even though the Ejet's have been developed and in production for the last decade, they are still finding ways to improve the wing by 6.4%. Are the new computer simulations just that much more advanced? You'd thought the E175 would have come with the most efficient wing possible on delivery.

 

Low rates on the E190 would cause seniority list flip flopping. This causes a massive headache when you finally get a good rate on the plane, or fleet changes are made. Safety, insurance, etc are not really the issue. The regionals go through this all the time.

 

Section 1 D. 9. of the Delta PWA contains a ratio of Mainline domestic block hours to Delta Connection BH. When we merged, the ratio was about 0.9 ML / DCI. Today we fly almost twice that amount (1.7X) during our peak summer season.

The minimum compliance number for our ratio is triggered by 76 seat operations. Since the company has resumed placing these aircraft into operation the minimum compliance metric is expected to increase to 1.56.

The rejected agreement was expected to raise this minimum number to 1.81. Of course the company has to over-fly the minimum to remain compliant on the shoulder months.

Increasing the BH ratio from 1.56 to 1.81 protected about 400,000 block hours. A 717 flies about 3,300 block hours per year. If we assume the E195 to be used in a similar fashion as a 717, it equals about 121 aircraft's worth of block hours. Recall, the plan was for 50 E190's. So, the increasing ratio protected more than just what the E195 was expected to fly. The 757 and 737 fly more block hours than the 717. The result of all of this is that the increasing BH ratio drove about a 2 to 1 increase. Therefore, the new narrow-body fleet type protected itself and one more aircraft too.

I do not know if it was planned to work out that 40 737-900 would create the needed BH above what 50 E195 could fly, but the math worked out almost perfectly (which made me think it was not a coincidence). Still, the company could replace MD88's & 757's with 737 and 321. To some extent they probably will. The E190 is not a suitable MD88 replacement (JMHO). Glad to hear the "flex fleet" of 757's seems to be flexing up by reducing the reductions ... good news.

This is not a pro/con discussion. TA15 has been asked and answered. It is just an explanation of how a section of our PWA works and if future negotiations result in a similar ratio change, the explanation is offered to help people understand the mechanism.

 

I get your education effort however, the ratios will always trail the number of mainline hours when they are executing the efficiency plan of upgauging the airline. The only "protection" is in a reduction cycle. They will always have the ability to pull down to some degree with trailing ratios. If they start a pull down, it will be because of a catastrophic event. That will be the trigger to renegotiate the balance of flying.

With the precedent of Moak giving away scope outside of section 6 or negotiating early at any time, we are never really protected. You can apply the same logic to widebody JV scope. If they need to do it, they will. They will answer to the grievance when they are ready to renegotiate. This is more about trust, respect for the pilots and respect for the agreement. They have proven there is little respect for either, hence no trust.

 

Let's say the ratio's were such that the company was out of compliance as of right now. Say like with the JV balance. What would we get? At least with the Moak crowd? A "one" time $30M forgiveness?

What does the pilot group cost the company? $2B or something like that? What's $30M? 1.5%? Split between 12000 pilots?

Yeah. That'll teach them to be out of compliance.


Yeah for new guys.

 

If anything, they still like their jumbo RJs, and the E175 is the best of the best in that regard, and TA2015 gave up more of them.

 

Its $3.3B but what's a billion here or there. So to make your point even stronger, the settlement was 0.009% of total compensation.

That'll teach'em, Yeah.

 

The BH ratio drove a 2 to 1 increase? How? If it was 1.1 back in 2012, if I remember what Alpha said, and is now 1.7+, and the ratio only required it to be 1.35, how did the min ratio drive a 2 to 1 increase?

I mean a ratio difference of 1.56 to 1.81 is 0.25, right? And that's 400K block hours / 121 ML aircraft protected. But that means 1.7X - 1.35 min ratio (as of right now) = .35, more than 400K block hours and more than 121 aircraft unprotected, so how is that driving anything?

It's more like taking credit for the sun coming up in the morning or water being wet. I mean if ALPA was all knowing in 2012 about future fleet plans and they knew in 2015 we'd be at a 1.7 ratio right now, why wasn't the ratio min set at 1.7?

 

717+++++