June 28, 2012
Within the next three years, the largest operators of Embraer’s 37-50-seat ERJ aircraft might need to spend more than $1 billion to overhaul all of the Rolls-Royce engines that power their regional jets, an Aviation Week Intelligence Network analysis shows.
The overhaul rate, as well as the projected cost, is even higher than for the General Electric engines that power Bombardier’s similarly sized CRJs (Aviation Daily, June 27).
Some of the aircraft, which U.S. regional carriers operate on behalf of major airline partners, are destined to come out of service. That is because high fuel prices have made them money-losers on many routes and, over the past decade, major U.S. carriers have been able to loosen union contract restrictions that limited the size of the aircraft their regional partners could operate.
Maintenance costs compound the problem. As reported earlier this week, data compiled with Aviation Week Intelligence Network’s MRO Prospector tool showed that three of every four of the GE CF34-3 engines will need to be overhauled within the next three years at a total cost of more than $1 billion, if those aircraft remain in service. But Prospector also shows that nearly every Rolls-Royce AE 3007 will need to be overhauled over the same time period, some of them more than once, at a projected cost exceeding $1.4 billion for all the engines’ operators.
The AE 3007 powers Embraer’s 37-seat ERJ-135, 44-seat ERJ-140 and 50-seat ERJ-145. It also is used for the Cessna Citation X business jet.
If SkyWest subsidiary ExpressJet, the largest operator of the ERJ, were to retain its entire fleet of these aircraft, it would need to overhaul all of the engines within the next three years at a projected cost topping $470 million. U.S.-based SkyWest says ExpressJet engine overhaul expenses are reimbursed as incurred under the regional airline’s contracts to operate the jets for Delta Air Lines and United Airlines.
American Eagle Airlines, the second largest ERJ operator, would need to spend $460 million to do the same. The regional carrier, however, is slated to return 39 of its ERJ-135s to Embraer in 2012 and 2013 as part of the Chapter 11 bankruptcy court proceedings of Eagle’s parent company, AMR Corp.
Chautauqua Airlines, a subsidiary of U.S.-based Republic Airways, could face more than $145 million in expenses to overhaul all of its engines. Republic Chairman and CEO Bryan Bedford in April said that Chautauqua needs to reduce its annual costs by as much as $60 million to make its operations profitable, and is trying to achieve those savings through actions such as maintenance-cost reductions and revised lease rates and debt structures on the aircraft; it also has parked some of the jets.