jetbluefan1
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JetBlue launches fleet review with E190 cost concerns

Thu Mar 16, 2017 12:10 am

“The stage length of the E190 is 40% shorter but the E190 is a high CASM airplane,” says Hayes. “We look at the E190 issue not as a CASM issue, but a return issue.”

https://www.flightglobal.com/news/artic ... rn-435199/

Nothing concrete w/r/t future deliveries in the article, but an interesting comment nonetheless, especially when considering the multiple times B6 management has spoken about the E190's.

IMO B6 @ BOS wouldn't be nearly as large it is today if it wasn't for these aircraft. They allowed B6 to effectively penetrate primarily business markets profitably.
 
flyby519
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Re: JetBlue launches fleet review with E190 cost concerns

Thu Mar 16, 2017 12:43 am

Perhaps time for B6 to go on a shopping spree in YUL.
 
Obzerva
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Re: JetBlue launches fleet review with E190 cost concerns

Thu Mar 16, 2017 12:47 am

VA are currently in the process of returning their E190s to the lessors as well.

As comfortable as they are, they seem to run on a thin margin for profitably.
 
Cointrin330
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Re: JetBlue launches fleet review with E190 cost concerns

Thu Mar 16, 2017 1:03 am

Isn't American Airlines ditching theirs as well (all inherited through the merger with US)?
 
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jfklganyc
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Re: JetBlue launches fleet review with E190 cost concerns

Thu Mar 16, 2017 1:03 am

They stopped all 190 deliveries a while ago.

Few expect the outstanding 190 deliveries to come on property.

Future B6 fleet 321/Cseries/LR for S America/330 to Europe (if they decide to go to Europe)
 
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enilria
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Re: JetBlue launches fleet review with E190 cost concerns

Thu Mar 16, 2017 1:13 am

I think the plane is not super-low-cost, but they are not going to find anything better in that size class once you consider their sunk cost. Maybe if fuel oil was $80, but now it doesn't work to replace the plane. Getting rid of it would orphan too many markets. Maybe this is part of an effort to get a regional feed carrier more like OO than Cape Air?
 
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LAXintl
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Re: JetBlue launches fleet review with E190 cost concerns

Thu Mar 16, 2017 1:27 am

JetBlue hosted a Wall Street event last week to introduce their new CFO Steve Priest and this was one of the pieces of news that came out.

Per comments of an analyst in attendance:

Mr. Priest noted the E-190s are “expensive” aircraft and that they are ‘taking a good look’ at the role those planes have in the fleet. He noted they were good for business routes out of Boston, but our take was he views these as a net negative for the company on the P&L.

We believe JBLU's 60 E-190s are a disproportionate cost drag on JBLU’s cost structure and, while valuable in certain markets, create operational and product complexity and give JBLU more reasons to open up markets where the airline’s presence probably isn’t needed. DOT data suggests E-190s carry CASM ex-fuel costs that are 63% higher than A320s on similar stage length, implying a massive opportunity for JBLU to cut its unit costs with an E-190 exit. Generally speaking, the most consistently successful airlines in the world run single fleet families.
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ikolkyo
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Re: JetBlue launches fleet review with E190 cost concerns

Thu Mar 16, 2017 1:37 am

CSeries is a logical replacement in my book, optimized and efficient for its capacity range. Plus engine commonality with the A320neo.
 
ITB
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Re: JetBlue launches fleet review with E190 cost concerns

Thu Mar 16, 2017 1:46 am

The sentiments expressed by JetBlue in the Flight Global article will be of serious concern Embraer. It would be interesting to know in more detail what factors are leading JetBlue to label the E190 a "high CASM" aircraft.
 
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Re: JetBlue launches fleet review with E190 cost concerns

Thu Mar 16, 2017 1:55 am

jetbluefan1 wrote:
“The stage length of the E190 is 40% shorter but the E190 is a high CASM airplane,” says Hayes. “We look at the E190 issue not as a CASM issue, but a return issue.”


Naturally, a 40% shorter stage length will skew the CASM of any aircraft. Additionally, aren't all mainline (3x3) aircraft more efficient (per seat mile) by default since they have 1 aisle for 6 seats instead of 1 aisle for 4 seats?

If the E190 is such a hog, is the E170/E175 even worse or do the regional pay scales help offset the inefficiency of the plane? A-net conventional wisdom indicates that the stretch of any aircraft has better CASM (738 vs 739, 752 vs 753, 788 vs 789 etc) Is labor the determining factor? Is this a reason why UA decided not to acquire any new 100-seat, mainline-paid, narrow body?
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Re: JetBlue launches fleet review with E190 cost concerns

Thu Mar 16, 2017 1:55 am

The issue with the E190 has always been the low SFC of the CF34-10E (even lower than the -8E) and its high overhaul cost due to low scale of economics. While the trip costs are less then an A320 by about 8-10%, the cost per seat is significantly higher which is the margin drag.

The good news is these shortcomings of the -10E have supposedly been fixed with the GTF on the E2. Coupled with a new wing and other drag improvements along with longer maintenance intervals (rolled out on the latest E175s), E has cleaned up this loose ends and should see a more competitive frame moving forward. Today, the E190 works best as a critical-feeder on a thin route to a major hub were the trip cost advantage is most advantageous as they're not chasing marginal pax. The high feed CASM (generally 1000 miles or less sectors) are then offset by low A321/739 trunk routes they're connecting too. Other way that works is building a smaller airline like TACA and Copa back in the day where low load factors make trip cost improvements the major driver over the standard lift. Either of these are good fits for JB and I suspect that most of their markets have demand curves that its net positive to run the bigger plane with junk fares at advance purchase to fill the back to lower overall CASM for the higher paying business travels.
 
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Re: JetBlue launches fleet review with E190 cost concerns

Thu Mar 16, 2017 1:59 am

And yet B6 is swapping the 190s for the Airbuses on the Cuba flights because the market isn't there for the larger aircraft. Dropping the 190 would leave a lot of holes in the B6 map, unless replaced with something of similar capacity. Is the CS100 that much lower in operating cost to justify the higher acquisition costs, training, etc.? Same or lower crew costs?

As to AA, the 190 represents a micro-fleet that doesn't fit in with the volume of the other large scale fleets, and must be expensive at the mainline pilot scale. It's a big jump up from Eagle rates without providing an equivalent percentage of additional seats. So it does make sense to phase those out. The A319s can fill that market.
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LAXintl
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Re: JetBlue launches fleet review with E190 cost concerns

Thu Mar 16, 2017 2:07 am

ITB wrote:
The sentiments expressed by JetBlue in the Flight Global article will be of serious concern Embraer. It would be interesting to know in more detail what factors are leading JetBlue to label the E190 a "high CASM" aircraft.


Nothing scientific about it. It only holds 100 people

Its simple math.

Like all smaller planes its CASM will be higher compared to larger peers.
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GSPSPOT
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Re: JetBlue launches fleet review with E190 cost concerns

Thu Mar 16, 2017 3:23 am

Didn't B6 do any kind of CASM analysis before committing to the E190? Also, if E2 is significantly more cost effective wouldn't Embraer work them a sweet deal on those to keep B6 inhouse?
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Re: JetBlue launches fleet review with E190 cost concerns

Thu Mar 16, 2017 3:39 am

GSPSPOT wrote:
Didn't B6 do any kind of CASM analysis before committing to the E190? Also, if E2 is significantly more cost effective wouldn't Embraer work them a sweet deal on those to keep B6 inhouse?


I believe JetBlue ordered 100 E190's in 2003 and was a launch customer of the plane. They were a much different airline in a much different operating environment than today, so I believe it's just a case of changing needs.
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Re: JetBlue launches fleet review with E190 cost concerns

Thu Mar 16, 2017 4:14 am

If one is only going to sell, say 90 seats, on a flight ... the E190 will do it cheaper than an A320. That is why so many airlines bought them. They saw routes that the E190 could perform cheaper than larger aircraft. It is a simple fact of airline economics though, that larger aircraft will always have a CASM cheaper than smaller aircraft. But with only 90 seats (for example) sold, the smaller aircraft will have a CRSM cheaper than the larger aircraft.

The problem arises when accountants look at the CASM and shudder at smaller aircraft ... forgetting that a passenger load on an E190 might be profitable but that same load would be loss making on an A320. It becomes a balance of deploying aircraft.

Clearly when JetBlue bought the E190, it was targeted at just such routes. It looks like today, with the continued success of JetBlue, those routes are becoming rarer and rarer. Air Canada, who bought the E190 for the same reasons as JetBlue, is coming to the same conclusion and have retired 20 out of the original 45. The problem is, that as those E190 targetted routes become rarer and rarer, the cost advantage of a separate fleet type is lost as the fleet becomes smaller.
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Re: JetBlue launches fleet review with E190 cost concerns

Thu Mar 16, 2017 4:33 am

GSPSPOT wrote:
Didn't B6 do any kind of CASM analysis before committing to the E190?


My original reaction was similar - wouldn't they know their costs anyway? However, after reading the article, it seems to me the real issue is coming up with a plan for what's next. Do they retire the type? Do they take the new E2? The article seems to allude that jetBlue had support issues with the type in the beginning. Probably, maintenance of the plane ended up being more costly than expected including canceled flights, lost revenue, etc. If they take the E2 - when is it going to be? Are they going to have same maintenance issues? This seems to be a concern as "The more airlines that order an airplane, the more aftermarket support you will see.” What if they decide to be an all A320 family airline again? What price could they get for the E190s they currently have? Would the 320NEO's efficiency offset the extra cost of flying the bigger plane in smaller markets?
 
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Re: JetBlue launches fleet review with E190 cost concerns

Thu Mar 16, 2017 5:00 am

A CSeries/A320/A321 fleet might just be the course of action, but of course, I must bring up the E2.

B6 will be recieving the A320/A321neos with PW powerplants. Are the E2s at all attractive to B6?
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Re: JetBlue launches fleet review with E190 cost concerns

Thu Mar 16, 2017 5:36 am

GSPSPOT wrote:
Didn't B6 do any kind of CASM analysis before committing to the E190? Also, if E2 is significantly more cost effective wouldn't Embraer work them a sweet deal on those to keep B6 inhouse?


There're a couple of points I'd make here. One is that B6 has probably outgrown a lot of the markets for which they originally selected the E190, and B6 has changed a little in its model and its role in the marketplace since then also. The second, and another post alludes to this, is that the E-Jet family, including the E190, seems relatively inexpensive to operate from a fuel perspective, but relatively expensive to operate from a maintenance perspective - in today's fuel environment, the E-Jet has lost its attractiveness because the relatively high mx costs now outweigh the relatively low fuel costs, rather than the other way around as would have been the case up until a couple of years ago. So, I suspect the E190 did actually do what B6 asked of it, but now is proving to be a little bit of a burden. If fuel prices shot back up in the next 6 to 12 months, B6 might again rethink its position on the E190s.
 
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Re: JetBlue launches fleet review with E190 cost concerns

Thu Mar 16, 2017 5:37 am

Jetblue regrets the E190 from day one.
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Re: JetBlue launches fleet review with E190 cost concerns

Thu Mar 16, 2017 7:10 am

LAXintl wrote:
JetBlue hosted a Wall Street event last week to introduce their new CFO Steve Priest and this was one of the pieces of news that came out.

Per comments of an analyst in attendance:

Mr. Priest noted the E-190s are “expensive” aircraft and that they are ‘taking a good look’ at the role those planes have in the fleet. He noted they were good for business routes out of Boston, but our take was he views these as a net negative for the company on the P&L.

We believe JBLU's 60 E-190s are a disproportionate cost drag on JBLU’s cost structure and, while valuable in certain markets, create operational and product complexity and give JBLU more reasons to open up markets where the airline’s presence probably isn’t needed. DOT data suggests E-190s carry CASM ex-fuel costs that are 63% higher than A320s on similar stage length, implying a massive opportunity for JBLU to cut its unit costs with an E-190 exit. Generally speaking, the most consistently successful airlines in the world run single fleet families.


If the last sentence of the analyst's comments are accurately reporting Mr Priest's views, then I wouldn't go buying those cheap Bombardier shares in expectation of C-Series orders from JetBlue.
You can't have a single fleet family covering E190, A320 and A321 sized planes from Bombardier, because they have no A321 equivalent, but JetBlue have been taking delivery of nothing but A321s since 2013, so they obviously have a requirement for aircraft in this size,
 
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Re: JetBlue launches fleet review with E190 cost concerns

Thu Mar 16, 2017 7:35 am

enilria wrote:
once you consider their sunk cost.


The POINT of calling something a "sunk cost" is that it is NOT to be considerded.
 
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Re: JetBlue launches fleet review with E190 cost concerns

Thu Mar 16, 2017 8:31 am

Andy33 wrote:
If the last sentence of the analyst's comments are accurately reporting Mr Priest's views, then I wouldn't go buying those cheap Bombardier shares in expectation of C-Series orders from JetBlue.


Hits the nail on the head--what would the C-Series offer differently? But I suppose small planes in general are going to offer less CASM than big ones. Maybe the A319 would be a better fit.
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Re: JetBlue launches fleet review with E190 cost concerns

Thu Mar 16, 2017 8:40 am

Time for a CRJ-NEO.
 
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Re: JetBlue launches fleet review with E190 cost concerns

Thu Mar 16, 2017 9:17 am

longhauler wrote:
If one is only going to sell, say 90 seats, on a flight ... the E190 will do it cheaper than an A320. That is why so many airlines bought them. They saw routes that the E190 could perform cheaper than larger aircraft. It is a simple fact of airline economics though, that larger aircraft will always have a CASM cheaper than smaller aircraft. But with only 90 seats (for example) sold, the smaller aircraft will have a CRSM cheaper than the larger aircraft.

The problem arises when accountants look at the CASM and shudder at smaller aircraft ... forgetting that a passenger load on an E190 might be profitable but that same load would be loss making on an A320. It becomes a balance of deploying aircraft.

Clearly when JetBlue bought the E190, it was targeted at just such routes. It looks like today, with the continued success of JetBlue, those routes are becoming rarer and rarer. Air Canada, who bought the E190 for the same reasons as JetBlue, is coming to the same conclusion and have retired 20 out of the original 45. The problem is, that as those E190 targetted routes become rarer and rarer, the cost advantage of a separate fleet type is lost as the fleet becomes smaller.

:checkmark:
B6 has evolved quite a bit also, and given the unflattering words spoken by the new 'beancounter' at the press conference about the 190, I would not be surprised at all if B6 simply decided to ditch the Brazilian jet and concentrate on the single Airbus family. They would probably be happy to leave some -presumably either not-so-important, and/or underperforming- markets and work on the segments where the Airbus economies produce stellar results. It seems as if, past the initial growing spree, B6 don't like to keep smaller markets alive per-se, but need rather need to concentrate on the solidly performing side of the business. And that is the reason why they are being cautious about the -21LR order and the anticipated growth across the Atlantic.
 
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Re: JetBlue launches fleet review with E190 cost concerns

Thu Mar 16, 2017 11:26 am

Andy33 wrote:
LAXintl wrote:
JetBlue hosted a Wall Street event last week to introduce their new CFO Steve Priest and this was one of the pieces of news that came out.

Per comments of an analyst in attendance:

Mr. Priest noted the E-190s are “expensive” aircraft and that they are ‘taking a good look’ at the role those planes have in the fleet. He noted they were good for business routes out of Boston, but our take was he views these as a net negative for the company on the P&L.

We believe JBLU's 60 E-190s are a disproportionate cost drag on JBLU’s cost structure and, while valuable in certain markets, create operational and product complexity and give JBLU more reasons to open up markets where the airline’s presence probably isn’t needed. DOT data suggests E-190s carry CASM ex-fuel costs that are 63% higher than A320s on similar stage length, implying a massive opportunity for JBLU to cut its unit costs with an E-190 exit. Generally speaking, the most consistently successful airlines in the world run single fleet families.


If the last sentence of the analyst's comments are accurately reporting Mr Priest's views, then I wouldn't go buying those cheap Bombardier shares in expectation of C-Series orders from JetBlue.
You can't have a single fleet family covering E190, A320 and A321 sized planes from Bombardier, because they have no A321 equivalent, but JetBlue have been taking delivery of nothing but A321s since 2013, so they obviously have a requirement for aircraft in this size,


I wonder if the A319 makes more sense, keeping with the all-Airbus simplicity.

I would think the range of these aircraft could also allow for more efficient non-Mint transcon flying.

How does the A319 operating cost compare to the A320 and the E190?
 
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Re: JetBlue launches fleet review with E190 cost concerns

Thu Mar 16, 2017 11:36 am

There have been rumors going around for a long time that JetBlue has been negotiating with Bombardier for the CSeries jets. Bombardier also had indicated several months ago that they expect a large order for the jet, from an unidentified airline, (similar in size to the Air Canada order), sometime this year. Could this be a JetBlue order?
 
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Re: JetBlue launches fleet review with E190 cost concerns

Thu Mar 16, 2017 12:27 pm

Cointrin330 wrote:
Isn't American Airlines ditching theirs as well (all inherited through the merger with US)?

Correct, current plan is to have them phased out by 2019
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Re: JetBlue launches fleet review with E190 cost concerns

Thu Mar 16, 2017 4:26 pm

What scope limits concerning codeshares does B6 operate under? Standard -- no more than 76 seats and under 86k pounds?

CB
 
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Re: JetBlue launches fleet review with E190 cost concerns

Thu Mar 16, 2017 7:27 pm

jetbluefan1 wrote:
I wonder if the A319 makes more sense, keeping with the all-Airbus simplicity.


As an E190 replacement. I don't think it would be a good idea. It would be a seat reduction while still costing about same as it would cost to operate the A320. This is where C-series can come in as winner. Not only as a 100 seater replacement (CS100) but as stop gap between the A320 and 100 Seater aircraft (CS300) . Jetblue's A320 capacity is going up to 162. Seeing how a large part of B6's network is built around a 100 seater, I don't see how they can walk away from a 100 seater entirely. As posted in the E-195 rollout forum here the threey reasons why I beleve the C-series is a good fit for Jetblue.

INFINITI329 wrote:

I believe that Jetblue must get something higher than 100 with their base seat count on the A320 going to 165. I think 65 seats is too large of a gap in fleet types for Jetblue's model so a 130 seater would be ideal. The are several benefits that I see with the C-series in Jetbue's network;

1. A CS100 & CS300 mixed fleet would fill the 100- 130 seat segment (completely replacing the E190 and allowing for growth. Jetblue has some of the oldest E190s in the world)
2. The C-series can fly any route currently in Jetblue network (It can replace the 320 on routes where capacity isn't really needed and open new ones where the C-Series would be way more efficient)
3. Jetblue's 320neo will also be p&w power so I would assume some synergies would be found there on maintenance
 
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Re: JetBlue launches fleet review with E190 cost concerns

Thu Mar 16, 2017 7:49 pm

jetbluefan1 wrote:
I wonder if the A319 makes more sense, keeping with the all-Airbus simplicity.

I would think the range of these aircraft could also allow for more efficient non-Mint transcon flying.

How does the A319 operating cost compare to the A320 and the E190?


I'm seconding this. Could second-hand A319s (especially as most carriers hunt the A321/320s now in upgrading their capacities) be a decent 'pick-up' here?

Or, as QR has 'fit' their way out of the A319NEO, I wonder if EADS might be willing to deal on the pricing. It would be an interesting consort, though - 'great' fuel economy/range, hopefully great pricing/financing/fab. maintenance package. The best option for B6 here would be to go via a lessor, and essentially 'lease' their worst performing aircraft - negating the ultimate risk of holding onto/being the only operator of - the type, potentially. Do I hope that Airbus sells more of them? Sure. Until a healthy pool of orders materialize though, both Airbus, B6, and lessors would have to consider the risk involved.

Will AS keep the 10 A319s at VX, or right-size them out (to what will 737s, or increased RJ flying).

Any airline out there with decent and/or new-ish A319s that would be willing to sell? TAP has 19.

Azul's workhorse is the E190. Despite the MX issues with the E190s, these have broadly been rectified. It didn't, in the time necessary for that to work - for B6. These frames, especially if sold a decent price - could benefit Azul, could benefit by being closer to Embraer's capabilities, and would allow the airline to increase its footprint at a decent passenger load. They have proven that it can work, and the Brazilian economy will improve (sometime...). Pie-in-the-sky, sure. Mr. Neeleman's assistance here would be beneficial.
Last edited by Rajahdhani on Thu Mar 16, 2017 8:03 pm, edited 1 time in total.
 
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lightsaber
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Re: JetBlue launches fleet review with E190 cost concerns

Thu Mar 16, 2017 7:57 pm

The CASM model changed not too long after the contract was signed and the planes were delivered. People forget that small airports were charging twice or more the RASM of similar competitive markets.

Then companies realized it was cheaper to direct employees to drive the rental car a few hours than pay the elevated fares. Many companies on relocation packages stopped paying airfare and simply awarded a stipend, so employees made the choice themselves.

Heck, I had so many employees going to Witchita that we spiked airfares and rental car rates. Employees on stipend found it cheaper to fly into neighboring states and drive (it was a long time ago...).

There are alternatives...

Okcflyer wrote:
The issue with the E190 has always been the low SFC of the CF34-10E (even lower than the -8E) and its high overhaul cost due to low scale of economics. While the trip costs are less then an A320 by about 8-10%, the cost per seat is significantly higher which is the margin drag.

The good news is these shortcomings of the -10E have supposedly been fixed with the GTF on the E2. Coupled with a new wing and other drag improvements along with longer maintenance intervals (rolled out on the latest E175s), E has cleaned up this loose ends and should see a more competitive frame moving forward. Today, the E190 works best as a critical-feeder on a thin route to a major hub were the trip cost advantage is most advantageous as they're not chasing marginal pax. The high feed CASM (generally 1000 miles or less sectors) are then offset by low A321/739 trunk routes they're connecting too. Other way that works is building a smaller airline like TACA and Copa back in the day where low load factors make trip cost improvements the major driver over the standard lift. Either of these are good fits for JB and I suspect that most of their markets have demand curves that its net positive to run the bigger plane with junk fares at advance purchase to fill the back to lower overall CASM for the higher paying business travels.

I agree with 2 points in particular:
I never understood the CF-34-8/-10 market appeal. The PW1200G/1700G is by no means an optimal engine, but it is two generations ahead of the CF-34-8/-10. Everyone should recall these are evolved TF-34s, the world's first high bypass turbofan. Even by 1990 standards the engines were behind, despite all the advertisements.

I also agree an abused A320 makes sense.

As much as I would like to see the C-series at B6, I do not think it is the right decision.

Besides, B6 is established at BOS now. The slots could be reassigned to more profitable markets.

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Re: JetBlue launches fleet review with E190 cost concerns

Thu Mar 16, 2017 8:13 pm

As for B6's evolution, it could be that they've grown up - and have confidence they can fill larger planes at good fares routinely across the airport pairs they want to try for the next ~ten years. A320s aren't the BIG plane anymore - they grew into 321s. This may be JetBlue's odd way of saying they don't want anything so small as 100 seats. AA is the only other U.S. Big 5 operator of 190s at mainline rates - and they don't even count because US took a few right after Ch 11 when they didn't have a pot to urinate in. Maybe B6 joins Delta in believing that the fare market really doesn't support 190s at U.S. mainline cost structures.
 
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Re: JetBlue launches fleet review with E190 cost concerns

Thu Mar 16, 2017 11:52 pm

I recall people saying B6 was having reliability issues right from the first delivery and there was some special program put in place by E to rectify the problems. Does anyone recall that? It was a very long time ago...
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Re: JetBlue launches fleet review with E190 cost concerns

Fri Mar 17, 2017 12:53 am

To all the people saying B6 would gain engine commonality if they ordered the C-Series (GTFs on both the C-Series and the A32x neos), that point is just as valid if they order the E-Jet E2s.
 
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intotheair
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Re: JetBlue launches fleet review with E190 cost concerns

Fri Mar 17, 2017 1:36 am

Yeah, I don't really see why they would want to switch from E190s to the CSeries. A319s might make a little more sense since it would at least be a common type, but that still raises a few challenges:

1) Unless if they buy them new, how many used A319s are really on the market? UA bought a slew of CZ A319s, but look at how long it's been taking them just to get even a handful into service.

2) Because of B6's silly "we don't overbook" policy, their IDB numbers have shot up with the introduction of the A321. Lots of people end up getting bumped when A321s are downgauged to A320s, so what would that be like if A320s were downgauged to A319s?

enilria wrote:
I think the plane is not super-low-cost, but they are not going to find anything better in that size class once you consider their sunk cost. Maybe if fuel oil was $80, but now it doesn't work to replace the plane. Getting rid of it would orphan too many markets. Maybe this is part of an effort to get a regional feed carrier more like OO than Cape Air?


I don't know if Cape Air, an airline that flies 9-seat Cessnas, is really relevant in this discussion, but you do raise an interesting idea that nobody has really talked too much about on here: how likely would it be for B6 to contract out the thinner routes to a regional like OO or RAH using E175s, CRJ-900s, or some sort of equivalent equipment? Doing so would allow them to still offer a pretty similar product at lower costs and still serve most, if not all of the current E190 routes. It would also take the fleet and pilot complexity out of the picture. Only questions with this may be: 1) I don't know the details of B6's pilot contract and whether or not this is allowed, and 2) Would B6 want to get into the regional game in light of the growing pilot shortage?
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keitherson
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Re: JetBlue launches fleet review with E190 cost concerns

Fri Mar 17, 2017 4:15 am

jetbluefan1 wrote:
Andy33 wrote:
LAXintl wrote:
JetBlue hosted a Wall Street event last week to introduce their new CFO Steve Priest and this was one of the pieces of news that came out.

Per comments of an analyst in attendance:

Mr. Priest noted the E-190s are “expensive” aircraft and that they are ‘taking a good look’ at the role those planes have in the fleet. He noted they were good for business routes out of Boston, but our take was he views these as a net negative for the company on the P&L.

We believe JBLU's 60 E-190s are a disproportionate cost drag on JBLU’s cost structure and, while valuable in certain markets, create operational and product complexity and give JBLU more reasons to open up markets where the airline’s presence probably isn’t needed. DOT data suggests E-190s carry CASM ex-fuel costs that are 63% higher than A320s on similar stage length, implying a massive opportunity for JBLU to cut its unit costs with an E-190 exit. Generally speaking, the most consistently successful airlines in the world run single fleet families.


If the last sentence of the analyst's comments are accurately reporting Mr Priest's views, then I wouldn't go buying those cheap Bombardier shares in expectation of C-Series orders from JetBlue.
You can't have a single fleet family covering E190, A320 and A321 sized planes from Bombardier, because they have no A321 equivalent, but JetBlue have been taking delivery of nothing but A321s since 2013, so they obviously have a requirement for aircraft in this size,


I wonder if the A319 makes more sense, keeping with the all-Airbus simplicity.

I would think the range of these aircraft could also allow for more efficient non-Mint transcon flying.

How does the A319 operating cost compare to the A320 and the E190?

Absolutely not. Just look at the amount of diversions for A319s and A320s doing transcon flying in the winter.

JetBlue should absolutely not think these planes, while cost efficient, are appropriate for its route network. These diversions are extremely expensive.

The CS100/300 would make nonstop routes such as YVR-FLL viable, and if deployed on non-JFK US transcon markets much more appropriate. For example, JFK-LGB. JFK-SJC. YVR-Miami area is the single most unserved city pair in North America right now.

A lot of people look at the A319 as a replacement for E190, but that's not a good fit for JetBlue's strategy. While tons of LCCs of Europe and Asia use the A319/A320 family, their distances are far, far more shorter. They are not doing 2,500 mi transcons.

There is a reason why Delta ordered the CS100 planes, and not just because it was at an extremely cheap price. Delta knows what it is doing.
 
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Re: JetBlue launches fleet review with E190 cost concerns

Fri Mar 17, 2017 4:47 am

AirBaltic will be usinv the CS3 on their non-stop Riga-Abu Dhabi. At 2,715 miles, this is a tiny bit longer than Boston-San Francisco.
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JoeCanuck
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Re: JetBlue launches fleet review with E190 cost concerns

Fri Mar 17, 2017 5:59 am

The CS100 will have pretty much the same trip costs and purchase price as the E2's, with the bonus of significantly longer range. Plus, the 300 gives them even more options.
What the...?
 
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LAX772LR
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Re: JetBlue launches fleet review with E190 cost concerns

Fri Mar 17, 2017 8:05 am

Wingtips56 wrote:
Dropping the 190 would leave a lot of holes in the B6 map, unless replaced with something of similar capacity.

And yet, reading what he said:
HAVING the E190 prompts them to remain in markets that they don't necessarily need/desire to be, but for to have a place to fly those aircraft.
I myself, suspect a more prosaic motive... ~Thranduil
 
gloom
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Re: JetBlue launches fleet review with E190 cost concerns

Fri Mar 17, 2017 8:25 am

JoeCanuck wrote:
The CS100 will have pretty much the same trip costs and purchase price as the E2's, with the bonus of significantly longer range. Plus, the 300 gives them even more options.


Not really. Someone called asking price, CS is 10mln extra (~60 vs ~70 mln bucks).

CS is not also an exact match against E190. It's 60T vs 50T, ~125 vs 98 seats, so not really an exact match. If you want to maintain seats only (and keep within 100 seats mark), 75E2 is better. If you plan to expand, then agreed, probably CS is better than E190 and any derivative. However, on existing routes where E190 is not full, CS eats all the gains by simply being heavier/even-more-empty. Lower CASM won't help if you fill up 80-90 seats out of 125.

Cheers,
Adam
 
Wingtips56
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Re: JetBlue launches fleet review with E190 cost concerns

Fri Mar 17, 2017 8:28 am

LAX772LR wrote:
Wingtips56 wrote:
Dropping the 190 would leave a lot of holes in the B6 map, unless replaced with something of similar capacity.

And yet, reading what he said:
HAVING the E190 prompts them to remain in markets that they don't necessarily need/desire to be, but for to have a place to fly those aircraft.

Ah. And that leaves them in the tough spot of either flying them and losing money, or parking them and possibly losing more money. Are they owned or leased? At least they could dump them at the end of the lease. Probably not a market for selling them off, though, so it would be a big write-down.
It begs the question: for JetBlue (leave others out of the discussion), would going with the CS100/E2/Mitsubshi (if ever) or going up a bit to CS300/A319 leave them in any better a position? Or do they really need to bite the bullet, close the 190/marginal cities and go forward with only the 320/321 and markets where those work?
Worked for WestAir, Apollo Airways, Desert Pacific, Western, AirCal and American Airlines (Retired). Flight Memory: 181 airports, 92 airlines, 78 a/c types, 403 routes, 58 countries (by air), 6 continents. 1,119,414 passenger miles.

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Jomar777
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Re: JetBlue launches fleet review with E190 cost concerns

Fri Mar 17, 2017 8:50 am

JoeCanuck wrote:
The CS100 will have pretty much the same trip costs and purchase price as the E2's, with the bonus of significantly longer range. Plus, the 300 gives them even more options.


no - it won't. In other threads this fact has already been highlighted - the CS100 costs about 20%- 30% more on list price. OK: nobody pays list price nowadays but it still leaves BBD with a mountain to climb.

Also, as already shown here, the issue here is to get the best on serving cities where a 100 seats max Aircraft is needed. The CS100 will not solve that and the CS300 would be simply too big.

it seems that the right path would be to deal with E and ditch these aircrafts in exchange for a cut price on E2 Frames which have already the commonality needed as well as the solution for these known flaws on the E Program.

The CS100/300 would only be useful on services where there's an increasing of demand which warrant a bigger aircraft and would compete heads on with A319s. Because there are lost of A319s in the market nowadays as second hand, I guess that, if JetBlue decides to ditch their whole E190s without going for the E2, those will be the solution since they will be cheaper and will have commonality with the rest of the fleet.

Even if the CS100 comes at a (very high...) cut price, the process in adapting crew, maintenance, etc., will make them seriously expensive. And, if those birds are to fly half full, it will et even worse.

Note also that he has expressed concerns about the current cost/benefits for the E190 presently on the fleet without either expressing concerns in regards tot he whole E/E2 Program neither declaring having other frames/makers in consideration.
 
oldannyboy
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Re: JetBlue launches fleet review with E190 cost concerns

Fri Mar 17, 2017 10:01 am

Absolutely not. Just look at the amount of diversions for A319s and A320s doing transcon flying in the winter.

JetBlue should absolutely not think these planes, while cost efficient, are appropriate for its route network. These diversions are extremely expensive.

The CS100/300 would make nonstop routes such as YVR-FLL viable, and if deployed on non-JFK US transcon markets much more appropriate. For example, JFK-LGB. JFK-SJC. YVR-Miami area is the single most unserved city pair in North America right now.

A lot of people look at the A319 as a replacement for E190, but that's not a good fit for JetBlue's strategy. While tons of LCCs of Europe and Asia use the A319/A320 family, their distances are far, far more shorter. They are not doing 2,500 mi transcons.

There is a reason why Delta ordered the CS100 planes, and not just because it was at an extremely cheap price. Delta knows what it is doing.

[/quote]

Don't think so.
To begin with the A319 has no range shortcomings, if anything it has more range than the 320, so it would offer better reliability that the bigger brother on transcons, and alleviate the [expensive] problem of winter diversions. A319s in Europe and the Middle-East regularly fly 5+ hours missions with full loads.
The 319s on the used market a quite a bit (a lot, actually) cheaper than 320s at the moment. It's fallen out favour for some, but if acquired for the right price they can be a darn capable machine, and operate profitably + blend in well in an already 320/21 established fleet. With space-flex+ slim lines they can also accommodate comfortably' 144 Y pax with decent pitch (or up to 150 with reduced pitch) when fitted with only one pair of overwing exits (156 with 2 exits), so not a small number, and certainly quite a bit above the 100-seats aircraft class, thus being useful to adjust capacity on some routes and potentially taking over from the E-jets on some segments (doing so with very similar operating economics, but carrying more people).
I would rule out B6 ordering the CS. It's not in the cards. If you read into the words spoken by the new 'beancounter' it's clear that they are unhappy with the E190 beyond the fact that it has proven expensive and unreliable for them. It's because of the added cost of running a second line of aircrafts alongside the Airbus that is proving a pain in the butt for JetBlue, so it's highly likely they will dump the Brazilian jet and simply not replace it. You don't bitch about costs of an E190 and then go and order the CS.....
Additionally the CS is bigger, heavier and more expensive than the Ejet, despite offering far superior range and performance. Delta is a wholly different beast.
 
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LA704
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Re: JetBlue launches fleet review with E190 cost concerns

Fri Mar 17, 2017 10:47 am

What about the E2-195?
The stage lengths of the current E190s are rather short, so no need for the CS. The 195 should offer ~125 seats in B6 config, far superior fuel economy, commonality with the whole fleet (E190/GTF)... The ~40 remaining orders could be converted, enough to replace the 60 190s seat-wise if we include one or another 320. I would expect Embraer to solve the MX issues with this generation.
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n5u
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Re: JetBlue launches fleet review with E190 cost concerns

Fri Mar 17, 2017 11:48 am

Its to bad that Sukhoi never got faa certification for the superjet ssj100-95b. I would love to see a real word cost comparison between the ssj100-95b and the E-190ar. I have a feeling with the $10,000,000 price difference and Sukhoi's support the ssj100-95 could turn a nice profit in the 100 seat market. Mexico's Interjet has ordered 15 more. I would say that is a good sign. I just don't think the jet gets the respect it deserves in the West. I think it would do jet blues e190 job at a much better profit margin
 
mjoelnir
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Re: JetBlue launches fleet review with E190 cost concerns

Fri Mar 17, 2017 12:44 pm

keitherson wrote:
jetbluefan1 wrote:
Andy33 wrote:

If the last sentence of the analyst's comments are accurately reporting Mr Priest's views, then I wouldn't go buying those cheap Bombardier shares in expectation of C-Series orders from JetBlue.
You can't have a single fleet family covering E190, A320 and A321 sized planes from Bombardier, because they have no A321 equivalent, but JetBlue have been taking delivery of nothing but A321s since 2013, so they obviously have a requirement for aircraft in this size,


I wonder if the A319 makes more sense, keeping with the all-Airbus simplicity.

I would think the range of these aircraft could also allow for more efficient non-Mint transcon flying.

How does the A319 operating cost compare to the A320 and the E190?

Absolutely not. Just look at the amount of diversions for A319s and A320s doing transcon flying in the winter.

JetBlue should absolutely not think these planes, while cost efficient, are appropriate for its route network. These diversions are extremely expensive.

The CS100/300 would make nonstop routes such as YVR-FLL viable, and if deployed on non-JFK US transcon markets much more appropriate. For example, JFK-LGB. JFK-SJC. YVR-Miami area is the single most unserved city pair in North America right now.

A lot of people look at the A319 as a replacement for E190, but that's not a good fit for JetBlue's strategy. While tons of LCCs of Europe and Asia use the A319/A320 family, their distances are far, far more shorter. They are not doing 2,500 mi transcons.

There is a reason why Delta ordered the CS100 planes, and not just because it was at an extremely cheap price. Delta knows what it is doing.


The A320 has a similar range as the C300, about 3,300 nm, and the A319 has quite a bit more range, about 3.750 nm.
 
flyby519
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Re: JetBlue launches fleet review with E190 cost concerns

Fri Mar 17, 2017 2:11 pm

LA704 wrote:
What about the E2-195?
The stage lengths of the current E190s are rather short, so no need for the CS. The 195 should offer ~125 seats in B6 config, far superior fuel economy, commonality with the whole fleet (E190/GTF)... The ~40 remaining orders could be converted, enough to replace the 60 190s seat-wise if we include one or another 320. I would expect Embraer to solve the MX issues with this generation.


The CS300 holds a few more pax and can fly farther, which I believe, will make it the front runner for B6. I could see B6 using a plane to fly longer thin routes currently flown by the A320. Perhaps even have a few Mint seats in the configuration. The extra range would make Mint a possibility in the CSeries, as well as help increasing utilization (E190 can't fly far enough to do redeyes efficiently and has lower utilization).

Routes like BOS/JFK-DEN/PHX/ABQ/SLC/DFW/AUS/HOU would be good fits for the CS300.
 
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LA704
Posts: 79
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Re: JetBlue launches fleet review with E190 cost concerns

Fri Mar 17, 2017 2:33 pm

flyby519 wrote:
LA704 wrote:
What about the E2-195?
The stage lengths of the current E190s are rather short, so no need for the CS. The 195 should offer ~125 seats in B6 config, far superior fuel economy, commonality with the whole fleet (E190/GTF)... The ~40 remaining orders could be converted, enough to replace the 60 190s seat-wise if we include one or another 320. I would expect Embraer to solve the MX issues with this generation.


The CS300 holds a few more pax and can fly farther, which I believe, will make it the front runner for B6. I could see B6 using a plane to fly longer thin routes currently flown by the A320. Perhaps even have a few Mint seats in the configuration. The extra range would make Mint a possibility in the CSeries, as well as help increasing utilization (E190 can't fly far enough to do redeyes efficiently and has lower utilization).

Routes like BOS/JFK-DEN/PHX/ABQ/SLC/DFW/AUS/HOU would be good fits for the CS300.


So we agree B6 needs some additional seats. I'm not sure about the range though, more flexibility -> higher price to pay (purchase, structure/weight, fees,...). I'm not saying it isn't useful, but it won't be worth it for every airline. The E2 doesn't lack range either, advertised with 2500nm, if I remember correctly, it should be good for 2000nm, almost transcon. I could not imagine the CS3 anyway, not enough difference in size to the 320. Did anyone trustable compare the CS1 with the E2-195?
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Wayfarer515
Posts: 707
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Re: JetBlue launches fleet review with E190 cost concerns

Fri Mar 17, 2017 3:39 pm

n5u wrote:
Its to bad that Sukhoi never got faa certification for the superjet ssj100-95b. I would love to see a real word cost comparison between the ssj100-95b and the E-190ar. I have a feeling with the $10,000,000 price difference and Sukhoi's support the ssj100-95 could turn a nice profit in the 100 seat market. Mexico's Interjet has ordered 15 more. I would say that is a good sign. I just don't think the jet gets the respect it deserves in the West. I think it would do jet blues e190 job at a much better profit margin


The RRJ-95B does count with FAA certification.

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