SkyWest Airlines, Inc. [NASDAQ: SKYW] is eagerly awaiting its latest additions to its fleet thanks to a financial deal with the Brazilian government. Embraer recently announced that the Brazilian Development Bank (BNDES) approved financing for the export of six Embraer E175 commercial jets to the North American regional carrier. The aircraft will be delivered through the end of the year under existing previously announced orders with Embraer. This is great timing for the carrier, which finds itself working hard to stay on pace with ever-demanding flight schedules.
This is also a win for Embraer and the country of Brazil since the financing of R$670 million (approximately USD$128.3 million), will be made through disbursements conducted in Brazil. SkyWest’s commitment to pay BNDES in dollars helps to further stimulate foreign currency transactions in Brazil, something the country is very keen on.
This is the second financing deal with BNDES for the sale of Embraer aircraft exports to SkyWest Airlines. The first transaction was executed in December 2020, in the amount of R$ 400 million (about USD$76.6 million at today’s currency rates).
The FYI on the BNDES
BNDES is the main financing agent for development in Brazil and has played a fundamental role in stimulating the expansion of industry and infrastructure in the country, focusing on financing the expansion of national companies far beyond the borders of the country. As with Embraer, BNDES seeks to diversify the sources of its resources on the international market.
EMB E175 Fits a Growing Need
Designed for short to mid-range flights, the E175 features a cabin layout comparable to smaller mainline jets, but without the middle seats. Dual-class seating offers a layout for 76 seats or 10 seats in a single class (depending on the individual airline’s layout). The overhead baggage compartments are a little snug for oversized carry-ons, but then again, this is commonplace for aircraft of its size. Passengers tend to like the E175 because of the missing middle seats but also the great ratio of first-class seats.
One of the key features of the E175 is its big jet feeling. It just doesn’t feel cramped, and the large windows offer a great view while also providing plenty of natural lighting to enhance the spacious feel.
If you are interested in specs, the jet offers a max cruise speed of Mach 0.82, a range of 2,200 nm, and a service ceiling of 41,000 feet. Delta Connection flights utilize the E175 SC, which features specially designed wingtips and other fuel-saving devices that provide enhanced economic performance. Embraer claims these devices cut CO2 emissions by 6.4 percent.
Busy Times for SkyWest
SkyWest welcomes receiving the new jets as soon as possible to help support its busy flight schedule. The company operates partnerships with United Airlines, Delta Air Lines, American Airlines and Alaska Airlines carrying more than 36 million passengers in 2021.
Headquartered in St. George, Utah, their fleet of more than 500 aircraft connects passengers to 260 destinations throughout North America. As of June 30, 2022, the regional carrier operates 223 Embraer E175 aircraft and 140 Bombardier jets composed of CRJ 200s; 114 CRJ 700s and 44 CRJ 900s.
If recent trends continue, SkyWest will likely need to order additional aircraft from Embraer and BNDES will surely help facilitate those financing deals. After all, it’s a win-win situation for SkyWest, the bank and Brazil. We think they’ll all be saying “Obrigado” again very soon. We’ll keep you updated.
