SkyWest’s 100-aircraft tentative order for the is for the MRJ90, the larger of the two versions, but the deal also gives the U.S. regional carrier the flexibility to convert all or part of the order to the smaller MRJ70, CFO Michael Kraupp tells Aviation Week.
The eventual type or mix of types will depend on what happens with scope clauses at the major U.S. carriers that contract SkyWest to feed their networks. Kraupp says he believes SkyWest, the parent company of SkyWest Airlines and ExpressJet Airlines, can make that decision as late as one year before the first MRJ is delivered.
Currently, the airlines for which SkyWest operates most of its aircraft—and —have scope clause limits that restrict regional feed to 76- and 70-seat aircraft, respectively.
Delta recently reached a new agreement with its pilots union that sustains its cap, but United is pushing for a higher limit in negotiations on a joint contract with its pilots and those of the former Continental Airlines.
, a potential future SkyWest customer, also is pushing for a higher cap, using the leverage created by its Chapter 11 bankruptcy proceedings, and already is able to outsource some flying to aircraft with as many as 86 seats.
The MRJ90 and MRJ70 are designed to seat up to 92 and 78 passengers, respectively, in a single class with 29-in. seat pitch, but can provide fewer seats with larger pitch or in a two-class configuration.
“We’ll see where scope clause shakes out,” Kraupp says
The tentative MRJ deal, with the first delivery targeted for 2017, is only a part of the fleet replacement planned by SkyWest. SkyWest’s subsidiaries operate 725 aircraft today.
The fleet includes about 430, 700s and 900s and about 290 120s, ERJ-135s and . Kraupp says SkyWest is having “ongoing discussions” with aircraft manufacturers about fleet replacement.
Another agreement might not happen for 12-18 months, but could be reached earlier “if other parties can come to the table in a similar fashion [as Mitsubishi] and offer attractive deals,” he says.
Kraupp describes the tentative Mitsubishi deal, as well as an agreement for 200 Pratt & Whitney PW1200G engines to power them, as an example of the discounts SkyWest can negotiate that other regional carriers cannot because their fleets are not large enough accommodate large orders.
“We don’t think there are others in the market that can drive volume pricing,” he says.
Kraupp also indicated some flexibility in the maintenance terms for the MRJ aircraft and engines, which are still being worked out as part of a package deal. Financing terms also are still under discussion, but some adaptability is available there, too, depending on the length of the contracts that SkyWest’s major airline partners want to sign for the operation of the aircraft.
The end result, Kraupp says, is that SkyWest will be able to provide flexible terms to its major airline partners on the length of the agreements to operate the aircraft.