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SkyWest adds 20 first-gen Embraer jets as order for new version remains on hold

FILE PHOTO: The logo of Brazilian aviation company Embraer is seen during the Latin American Business Aviation Conference & Exhibition fair (LABACE) at Congonhas Airport in Sao Paulo, Brazil August 14, 2018. REUTERS/Paulo Whitaker

(Reuters) - Brazilian planemaker Embraer SA EMBR3.SA said on Thursday that U.S. regional carrier SkyWest Inc SKYW.O has signed a firm order for 20 E175 planes from its E1 generation, worth close to $1 billion, as an order for newer E2 aircraft remains in limbo.

SkyWest ordered 100 next-generation Embraer planes in 2013, but labor negotiations between pilot unions and airlines in the United States - where there are union restrictions on aircraft size - have so far not allowed regional carriers to fly the new plane.

Due to the uncertainty, Embraer in 2018 removed the order for the newer E175-E2 from its backlog, a document where the planemaker lists the number of orders it has received for its various planes.

SkyWest said on Thursday that its order for the E175-E2 was still on its books, but that its execution depended on reaching a new agreement with pilot unions, under a provision called the “scope clause”.

The airline added that the order announced on Thursday did not affect the order for the 100 E175-E2 planes.

SkyWest was the launch customer for the broader E2 line in 2013, announcing back then an order worth as much as $9.4 billion.

Embraer executives said at the time that the order was a vote of confidence in the new aircraft line, which has since faced some delays.

Embraer has yet to deliver any E175-E2 jets. Embraer executives have said the planes might have more commercial success outside the United States, where there are fewer pilot union restrictions on size.

Reporting by Marcelo Rochabrun; Editing by Daniel Wallis and Christopher Cushing