MIAMI — Earlier this weekend, United Airlines (UA) began service with its new 76-seat Embraer E175 aircraft by launching its first two E175 routes from Chicago O’Hare to Boston Logan and Washington Reagan.
The Carrier will be adding 27 E175s to its fleet in 2014 (out of a total planned fleet of 70). The new E-Jets will be configured as (12F / 16Y+ / 48), and will be split between United Express partners SkyWest Airlines and Mesa Airlines.
“We are thrilled to welcome the E175 to United Express and celebrate the launch of service from our hometown of Chicago,” said Sandra Pineau-Boddison, United’s senior vice president of United Express. “This fantastic new aircraft will enable us to better serve our customers, particularly in high-frequency business markets.”
In addition to Boston and Washington Reagan, United will also be launching services from Chicago to Minneapolis, Atlanta, and New York La Guardia with the E175 in June, while services from San Francisco to St. Louis, Austin, Dallas Fort Worth, and Minneapolis St. Paul will begin in in September and October, operated by SkyWest.
All 70 E175 aircraft are expected to enter fleet by the end of 2015, bringing United’s fleet of regional aircraft seating 50 or more passengers to 251 airframes split between the Embraer E170 and E175, the Bombardier CRJ-700, and the Bombardier Q400 turboprop. The increased regional fleet will be used in part to replace a portion of United’s 391 regional jets and turboprops seating 50 or fewer passengers.
Indeed, between the elimination of the Cleveland hub and the uptake of the new E175s, United will be able to reduce its fleet of 50-seat RJs and turboprops by more than 150 airframes, bringing its 50-seat RJ fleet size roughly in line with that of rival Delta Air Lines.
The carrier has a regional jet problem, more so on the cost side than on the revenue side though both effects certainly exist. On the cost side, the economics of 50-seat RJs simply don’t make sense given fuel prices, aging fleets (without a viable jet replacement option), and the looming pilot shortage.
But the revenue impact of United’s over-reliance on 50-seat RJs is often overstated. To be sure, Delta’s pledge to not operate 50-seat RJs on flights longer than 750 miles might boost revenue to a degree. But the boost is more marketing and psychological than it is practical. 50-seat RJs on longer flights might explain 5% of United’s revenue struggle. Not insignificant, but far from United’s biggest problem.
Moreover, it’s not as if UA could just walk away from this fleet of 50-seaters. Partly as a result of the extremely slow integration of employee groups (and admitted intransigence on the part of employee unions), management couldn’t commit to a new fleet of 50-seaters until it got scope clauses sorted out, placed the aircraft with specific operators, and secured delivery slots from Embraer or Bombardier. All of that process takes time, and so it took roughly a year and a half from the moment the carrier signed its new pilot deal in late 2012 until the entrance of its first E175.
Sometimes it feels like the curve that United is graded against is that of rival Delta Air Lines, and admittedly Delta has been faster than United in removing 50-seat RJs from its fleet. At the same time, Delta had nearly a year long head start, and it is still in the process of removing 50-seat RJs. The Chicago-based carrier has begun the same process, expect it to pay similar dividends.