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Republic adding 50 E175s for United ops, leases 24 Q400s to Flybe

Republic Airways Holdings is to amend its Shuttle America E-Jet capacity purchase agreement (CPA) with United Airlines to add 50 new 76-seat Embraer 175s, while removing the 31 Q400s from United service and subleasing 24 of them to Flybe in the UK.The duration of each aircraft under the E-Jet CPA will be 12 years. Also as a part of the amendment, Shuttle and United will extend the CPA for the existing 38 E170s to new expiration dates ranging from September 2019 to December 2022.The winding down of the Q400 CPA will start in January 2015 and end in September 2016. Deliveries to Flybe will be coordinated with the removal of the aircraft from United service. The remaining seven Q400s will be sold, leased or returned to the lessor.“United was our first E-Jet customer, and we are excited for the opportunity to further develop our relationship with 50 new E175s. This is a testimony to the excellent work of our employees, and we look forward to continuing to provide United with safe, clean and reliable air service,” said Bryan Bedford, President, Chairman and CEO of Republic.As part of the United E-Jet CPA amendment, Republic signed an agreement with Embraer to acquire 50 new E175s, deliveries of which will run from July 2015 to August 2017.Flybe is using addition of the 24 Q400s to resolve its legacy fleet commitments, a process also involving Embraer. In July 2010, Flybe ordered 35 E175s, with deliveries originally scheduled to be completed by March 2017. So far, eleven have been delivered and last year the deliveries of the remaining twenty four were rescheduled to a four-year period from October 2015.The new agreements relate to these remaining twenty four E175s. Flybe and Embraer have now agreed to terminate 20 E175s from Flybe’s firm order backlog and to defer delivery of the four remaining E175s from Flybe’s order until 2018, in line with Flybe current fleet planning needs.The Q400 being sub-leased by Flybe have an average age of 5.4 years and will have an average sub-lease period of 4.6 years at March 2015. Their delivery schedule fits Flybe’s fleet replacement and growth profile as twenty one Q400s from the existing Flybe fleet come to the end of their lease periods over the next four years. Saad Hammad, Flybe’s chief executive officer, commented, “We are committed to flying the right aircraft on the right routes. The agreements between Flybe, Republic Airways and Embraer bring more than just an ability to keep to that commitment. With the substitution of 20 E175 future deliveries by young and attractively priced Bombardier Q400s, our core UK branded fleet is now right sized to our capacity growth and aircraft renewal plans at a net cost broadly in line with our expectations.“Flybe continues to value its close partnership with Embraer,” Hammad added. “Our current E175s are popular and reliable aircraft and will remain a valued part of our fleet, providing efficient and cost-effective services on our longer sectors.”

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