Republic Announces new CPA with American

Republic Announces new CPA with American

By Cliff1066 of Flickr

Republic this last week was awarded a Capacity Purchase Agreement with American Airlines that will last 12 years. The service will start this Summer in July, and all aircraft will be on the property by the end of 2015. This will take the contract period through 2027 for the last aircraft that arrives.

Republic's CPA will be for 53 Emb 175's, and they should see a delivery rate of 2-3 aircraft per month until all 53 are filled.

Of the 53 Aircraft

  • 47 will be purchased from Embraer
  • 1 leased previously owned aircraft from Embraer
  • 5 purchased from a previous owner.

Interestingly, Republic will have options for an additional 47 Aircraft from Embraer after 2015. Whether those will go to American or not will remain to be seen.

Also, Republics tumultuous labor relationships will prove interesting as this new flying is implemented. A potential Strike at Republic from their Pilots could cripple the new contract between AMR and Republic Airways. Whether the National Mediation Board will release the pilots who have been in negotiations with a sub-industry contract for over half a decade is anyone's guess. The last Regional to see that amount of time in contract negotiations between Pilots and Management was Pinnacle Airlines.

The Pilot Demand Model has been updated for the new American CPA, at Republic Airways Pilot Demand.

Currently American's Scope contract will allow for Max Aircraft weights of up to 86,000 lbs. This will limit to some extent what models of Emb175's will qualify under the scope. According to Wikipedia E-Jet Page max gross weights these models would be the STD, and the LR.

Current American Scope language limits the number of "Large Regionals" to 25% of Mainline Narrowbody Fleet. At current numbers this is roughly 120 "Large Regional" aircraft. This scope eventually max's out at 40% of the Mainline Narrowbody Fleet in 2016. With Current mainline numbers this would be roughly 200 "Large Regional" aircraft. Although this announcement is ground breaking for American, there are still are large number of other potential bids to be awarded to cover Americans remaining scope.

With the recent Order by Republic the unknown bids look something like this

 

American Mainline NarrowBody Scope Limit "Large Regional" Limit Current Total Regional Ordered/In-service Current "Large Regional" Ordered/In-service
Roughly 492  320  120 325 53

 

It should be noted the amount of additional "Large Regional" aircraft remaining not awarded. However, any additional aircraft beyond what has been ordered will require a fleet reduction, presumably by American Eagle.

At 2016 it shifts to look like this:

 

American Mainline NarrowBody Scope Limit "Large Regional" Limit Current Total Regional Ordered/In-service Current "Large Regional" Ordered/In-service
Roughly 515  334  206 325 53

 

By 2016 their will be room for an additional 150 aircraft worth of flying at the "Large Regional" level. However, substantial reduction would have to occur with the grounding of smaller regional aircraft, this poses a substatial threat to Eagle, unless they are awarded "Large Regional" flying.

An American/US Air merge would have some effect as it would increase the current number of Mainline Narrow-Body aircraft, but it would not change the current ratios of Pilot Scope, due to the MOU's signed by APA and US Airways Pilots.

 

 

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