It may have taken Continental Express a year to decide on its new regional aircraft, but Embraer has no complaints now.
The carrier has become the North American launch customer for the Brazilian-built 50-seat EMB-145 regional jet. It has announced firm orders for 25 of the type, plus no fewer than 175 options, with deliveries planned to stretch over the next 12 years.
A beaming Mauricio Botelho, Embraer's president and CEO, not surprisingly declared himself "very happy", claiming the order means the EMB-145 is now assured of success in the industry.
Similarly delighted is Allison, whose AE 3007 turbofan has just received its largest order to date as part of the deal.
David Siegel, Continental Express's president, says a selection procedure of unprecedented rigour was undertaken before the EMB-145 was chosen in preference to the Canadair Regional Jet and Saab 2000.
Factors in the Brazilian aircraft's victory were its superior economics over shorter sectors and "clearly superior" passenger appeal compared to its Canadian competitor.
It scored over the Swedish contender by providing "jet revenues and turboprop costs", whereas the Saab 2000 gave "turboprop revenues and regional jet costs".
Value of the initial 25-aircraft contract is $375 million, with Embraer arranging an unspecified financing structure for Continental Express.
The airline currently operates an all-turboprop fleet of 25 Beech 1900Ds, 32 Embraer Brasilias and 41 ATRs of varying types. Siegel says there is no intention to replace any of those with the new aircraft for the next three to five years. Turboprops freed from existing sectors will be used to implement the carrier's plans for growth.
Four EMB-145s will be delivered by the end of this year, 16 in 1997 and the remaining five by mid-1998.
Siegel sees three business opportunities for Continental Express in using the new jets: increasing flights out of Continental Airlines' hubs at Cleveland, Houston and Newark; the "downgauging" of some of the parent company's thinner routes currently operated by larger aircraft; and upgrading some of Continental Express's existing turboprop-served sectors.
Siegel says Continental is firmly wedded to the hub-and-spoke concept, and will not be using the new aircraft to by-pass the hubs (which he describes as "significantly under-exploited") or set up direct city pairings. The first 25 EMB-145s will be used to build growth at those hubs.
Source: Flight Daily News
