MIAMI – Republic Airways and United Airlines have reached an agreement to wind down the United Express fleet of 31 Bombardier Dash 8 Q400 aircraft, adding 50 Embraer E175s as replacement. The agreement will increase United’s fleet of the 76-seat ( 12F / 16Y+ / 48Y ) E175 regional jet (RJ) to 120 aircraft, and marks a blow for turboprops in the United States. Delivery of the new E175s will begin in July 2015 and continue through summer 2017, while the Q400 fleet will be removed from service between January 2015 and September 2016. Of Republic’s 31 Q400s, 24 will be sold to European low cost carrier (LCC) Flybe, as a replacement for that carrier’s canceled order for 20 E175s.

The E175s will replace the Q400s and smaller 50-seat RJs such as the Embraer E145 or Bombardier CRJ-200. United Express already has 10 Embraer E175s in service withSkyWest Airlines (with 30 more on order), as well as six in service with Mesa Airlines (with 24 more on order). Rival airlines have often opted for mix of Embraer E-Jets and Bombardier’s CRJ-900 Next Gen (which offers superior operating economics), in adding large regional jets to their fleet, but with the new aircraft, United appears to have aligned on the more comfortable E175.

In terms of replacement, United’s Q400s will operate 672 flights this week, with primary bases at Newark and Denver, as well as a secondary base at Washington Dulles. On shorter flights, the operating economics of the Q400 are far superior to those of the E175, but that advantage evens out at about 500 nautical miles ( ~ 575 miles). The E175 is more flexible, with a longer range and the ability to operate more flights per day due to its higher cruising speed. Thus United could conceivably replace the 20 Q400s actually built into the flight program with 16 or 17 E175s, freeing up the remainder of the aircraft for the more pressing task of replacing the 50-seat RJs.

Indeed, United finally appears to have admitted that it has a problem with RJs, one that helped drive many of its revenue challenges over the past 24 months. That RJ problem won’t go away overnight, but by the time all 120 E175s are in service, its will be alleviated substantially. In that sense, the news is extremely positive for United.

At the same time, it is a shot across the bow of Bombardier, who is betting on the Q400 as a replacement for aging regional jet fleets. Outside of the Pacific Northwest, that does not appear to be a feasible goal. United’s Q400 fleet was held up as a successful operation, but in an ironic twist, will now be replaced by regional jets. The problem, as it always is, appears to be the poor customer perception of turboprops in the United States. Until that changes, US airlines will be unable to take advantage of the superior operating economics of them.