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CRJ900
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Re: Embraer pitches E195-E2 at JetBlue

Thu Mar 01, 2018 8:41 pm

What does JetBlue need the E-jets E2 / CSeries for? Short shuttle-type flights in the Northeast US or long thin routes or both?

The E195-E2 looks very nice, but it is a very long aircraft - at 41,5 metres it is two metres longer than the B737 MAX 8 and needs up to 1,970 metres of take-off runway length. Does B6 use the E190 on short runways now? The CS100 can blast off after 1,500 metres and the CS300 after 1,800 metres in comparison.

If the E195-E2 can fly 2,600 nm with 132 pax, it can fly transcon at night and shuttle during the day, making it equal to the CSeries and A320. B6 has the luxury of choosing between two very good aircraft types. Exciting times ahead.
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Jomar777
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Re: Embraer pitches E195-E2 at JetBlue

Fri Mar 02, 2018 9:01 am

Goodyear wrote:
I will ignore the personal attacks. He's probably just a gate agent or bag thrower anyway with no real insight. Anyway, the dumbest thing JetBlue did was go for the E190. They know this and will not repeat the same mistake again. Unless of course Emrbaer basically gives them free airplanes again, which speaks for itself. This is all assuming of course that they are not bought outright by United or Southwest in a hostile takeover attempt which is a very real possibility.


You really have no clue do you? The gate agent here does much more than you will ever dream of. You can check the web and find out - no need for details here.
Who gives airplanes for free is BBD. NO WAIT!!! They already gave the whole program away for free to Airbus...

The E190 may not be the preferred aircraft for the whole Airline Industry but you do not see them being ditched right left and centre. But you may never know since an office worker for B6 certainly cannot see beyond their window to what is happening with KLs fleet and others so I understand.

Stick to facts - the E-Series sold much more than the C-Series can actually dream in selling right now. Yes, the E2 has less orders but the whole E Program is a different fact.

I get that people here are dying to see the C-Series conquer the world but fact is that this is a heavy over budgeted, delayed project that is surviving on subsidies and plane dumping right now.

I will stand corrected and will be the first to admit only and IF ONLY the C-Series acquire substantial orders for a price close to what the frame is commercially worth. Having said that, when this happens, it is highly likely BBD will not make much money from it anyway because Airbus will carry the profits away.
 
Jomar777
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Re: Embraer pitches E195-E2 at JetBlue

Fri Mar 02, 2018 9:11 am

777Mech wrote:
Jomar777 wrote:
Goodyear wrote:
As someone who's done contract work for JetBlue related to the Embraer, I can tell you that they can't wait to get rid of this aircraft. Embraer are junk, throw-away airplanes. There's a reason why hundreds are in the desert or stuck in between leases for years on end or already scrapped. Even some E190s, including some formerly operated by JetBlue, have been scrapped. The quality simply is not there, and throwing two big shiny engines on it won't help much in that area.


I am sorry but this is an extremely poor comment. Maybe that's why you did contract work and did not get a PERMANENT job with them but let's leave at that.

Please provide a real and reliable link that attests the facts you quote. I am sure you do not have any.
If B6 could not wait to get rid of their EMBs, they would have already done so and ordered the C-Series which at present are flying, have orders but which they (B6) have not ordered yet.

All in all, they may prefer CSeries for the future but this is a far cry compared to what you state.


Contractors probably make more than anyone at JetBlue anyways.


Contractors make between 20% - 35% higher than a full time employee. This is standard. However, this is to compensate the fact that they are usually on short term employments (maximum 2 years) with no job stability. This is also because you do NOT get the PRP Bonus Package which most entities grant you on target completion and comes ON TOP of your salary.

Usually, if you want to join a big organization, you tend to accept contract work with the aim to move to that entity permanently. When they send you away at the end of contract term, well...

If you join a company on a contract and they do not retain your services afterwards on a permanent basis
 
tphuang
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Re: Embraer pitches E195-E2 at JetBlue

Fri Mar 02, 2018 2:47 pm

Every airliners sell their frames for a significant discount, especially at start of the program, when production costs are high and prices are cut for launch carriers to compensate for the pains experienced in using a new aircraft. As launch carrier of E90, JetBlue would've had a great deal.

Whether JetBlue picks E2 or C Series, both manufacturers will be selling it below the production cost, because that's how it works in the beginning on the program. If either E2 or C Series become a high selling aircraft later on, the large discounts and losses at the beginning will be well worth it. B787 is a great example of that. Even now, it has over $20 billion in deferred costs which it expects to make back eventually. I would say 787 is certainly a great success in spite of the early production issues.

As for E-Series selling more than C-Series, that is comparing apples to oranges. E-Series have been around a lot longer and the C Series does not have a variant the size of E75.

If JetBlue intends to continue using E90 replacements the way E90s are used now, E2 should be the favourite. If it intends to add a mini-mint cabin, use it for thin transcon routes at some point and increase utilization to something close to A320, then I think it will go for C Series.
 
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Polot
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Re: Embraer pitches E195-E2 at JetBlue

Fri Mar 02, 2018 2:57 pm

tphuang wrote:

If JetBlue intends to continue using E90 replacements the way E90s are used now, E2 should be the favourite. If it intends to add a mini-mint cabin, use it for thin transcon routes at some point and increase utilization to something close to A320, then I think it will go for C Series.

I don’t see JetBlue ever adding a mini-mint cabin on these planes for thin transcons. If they were interested in a smaller mint jet they would use A320s. Also it is debateble if a thin transcon requiring something E2/C series size to work would have the neccessary premium traffic for mint.
 
tphuang
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Re: Embraer pitches E195-E2 at JetBlue

Fri Mar 02, 2018 3:26 pm

Polot wrote:
tphuang wrote:
m

If JetBlue intends to continue using E90 replacements the way E90s are used now, E2 should be the favourite. If it intends to add a mini-mint cabin, use it for thin transcon routes at some point and increase utilization to something close to A320, then I think it will go for C Series.

I don’t see JetBlue ever adding a mini-mint cabin on these planes for thin transcons. If they were interested in a smaller mint jet they would use A320s. Also it is debateble if a thin transcon requiring something E2/C series size to work would have the neccessary premium traffic for mint.

Sorry don't think I was clear there. I was listing them as separate issue. So having a couple of rows of 2 by 2 first class cabin could be something that tilts them to c series. Or having a need for thin transcon or even midcon aircraft with good operating economics could drive them to c series since they have had bad experience with e90 on longer routes.
 
ExMilitaryEng
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Re: Embraer pitches E195-E2 at JetBlue

Fri Mar 02, 2018 3:58 pm

tphuang wrote:
As for E-Series selling more than C-Series, that is comparing apples to oranges. E-Series have been around a lot longer and the C Series does not have a variant the size of E75.

If JetBlue intends to continue using E90 replacements the way E90s are used now, E2 should be the favourite. If it intends to add a mini-mint cabin, use it for thin transcon routes at some point and increase utilization to something close to A320, then I think it will go for C Series.

(Your entire post is superb by the way!)

As you say, if B6 is strictly interested in lowering CASMs on its current thinner/shorter routes, then the E195E2 should win. B6 would also save on crew trg costs, and convert favorably the 20 undelivered E190s.

However, with Delta CSeries coming in JFK (or LGA?), B6 will have to match this new competition. Passager comfort, transcon capabilities and lower CASM would now be critical factors.

The CS300 would then be the preferred option (but I agree, trading off higher trip costs for even lower CASMs, compared to the E195E2).
 
iceberg210
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Re: Embraer pitches E195-E2 at JetBlue

Fri Mar 02, 2018 4:30 pm

tphuang wrote:
Sorry don't think I was clear there. I was listing them as separate issue. So having a couple of rows of 2 by 2 first class cabin could be something that tilts them to c series.


I'm curious how the new staggered 2-2 first class that Embraer has offered in the E2 changes that equation or if you don't really gain that many seats you just don't have them 1-2. Be interesting to know the comparison.

https://www.embraercommercialaviation.c ... kes-debut/
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767333ER
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Re: Embraer pitches E195-E2 at JetBlue

Fri Mar 02, 2018 4:59 pm

Jomar777 wrote:
The E190 may not be the preferred aircraft for the whole Airline Industry but you do not see them being ditched right left and centre. But you may never know since an office worker for B6 certainly cannot see beyond their window to what is happening with KLs fleet and others so I understand.

Well they must be able to see all the way to Montreal or Dallas where people are also actively trying to phase out their E90s and maybe they could see all the way to Australia where the phase out of E90s already happened. It’s a pretty bad sign when Air Canada finds A319s from the mid 90s more cost effective to fly. This is another troubling one:
http://www.flightglobal.com/news/articles/embraer-maintenance-costs-cut-into-jetblue39s-profits-385172/
Thankfully for Embraer much of the E2 has been reengineered and it has the same engines as competitors which should hopefully be better than the CF34-10E.

Jomar777 wrote:
Stick to facts - the E-Series sold much more than the C-Series can actually dream in selling right now. Yes, the E2 has less orders but the whole E Program is a different fact.

I’m not sure exactly what you’re getting at here as the sentence doesn’t quite make sense, but I’ll take a stab. The previous E-Jet program has sold nearly 1400 copies. That’s a good number. It may even sell more if the E175 E2 fails. I would consider 1400 not an easy but possible number for the CSeries considering Boeing’s forecast for 2000 CSeries. A fairier comparison would be to eliminate the E170 and E175 from the discussion as the CRJ competes with those, not the CSeries. The 737 and A320 are competitors, but the 737-600 and A321 are not so we don’t do that comparison, same here. In that case it’s about 700 orders. The CSeries is almost half way there already

Jomar777 wrote:
I get that people here are dying to see the C-Series conquer the world but fact is that this is a heavy over budgeted, delayed project that is surviving on subsidies and plane dumping right now.

I don’t see what about the CSeries is heavy other than that it is a somewhat bigger and more capable plane than the E90/95 are. Otherwise behind schedule, overbudget, subsidized, and selling below cost during the first couple of years of production are the norm these days for every aircraft program and some even the case for just about any engineering venture in general. Again the E2 is much a different plane than the previous generation, much of this has to do with the previous generation’s maintainence costs and likely hood to be retired quite young, otherwise they wouldn’t spend money reengineering it to make it better. I do think the E2 has a very good chance of getting the order and I actually have a gut feeling it just might. What I want to see is JetBlue order the CSeries just to have more of them sold in the US, but it’s getting to the point for Embraer now where they can’t afford lose anymore.
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Re: Embraer pitches E195-E2 for JetBlue

Fri Mar 02, 2018 11:21 pm

CobaltScar wrote:
What they do need to do though, is more EMS seats at the front of the aircraft. Right now its just the first row and then a few rows over the wing. People wanting to feel special want to sit up front, not over wing.


I always thought they were required to provide extra pitch in the exit rows and decided to capitalize on it since people angled to get those seats. Wasn't EMS born out a desire to lower the pax count just enough to get by with 3 FAs instead of 4?
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Re: Embraer pitches E195-E2 at JetBlue

Fri Mar 02, 2018 11:39 pm

My very non-scientific brain wants to simplify this and think that B6 could be the Airbus version of WN with a A318/19/20/21 fleet that provided crew and supply chain commonalities that might outweigh some performance or economic forced-fits in certain markets, but I freely admit I don't understand the technical end of fleet choice.
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tphuang
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Re: Embraer pitches E195-E2 at JetBlue

Sat Mar 03, 2018 12:03 am

ExMilitaryEng wrote:
tphuang wrote:
As for E-Series selling more than C-Series, that is comparing apples to oranges. E-Series have been around a lot longer and the C Series does not have a variant the size of E75.

If JetBlue intends to continue using E90 replacements the way E90s are used now, E2 should be the favourite. If it intends to add a mini-mint cabin, use it for thin transcon routes at some point and increase utilization to something close to A320, then I think it will go for C Series.

(Your entire post is superb by the way!)

As you say, if B6 is strictly interested in lowering CASMs on its current thinner/shorter routes, then the E195E2 should win. B6 would also save on crew trg costs, and convert favorably the 20 undelivered E190s.

However, with Delta CSeries coming in JFK (or LGA?), B6 will have to match this new competition. Passager comfort, transcon capabilities and lower CASM would now be critical factors.

The CS300 would then be the preferred option (but I agree, trading off higher trip costs for even lower CASMs, compared to the E195E2).


Thank you very much. E2 would certainly be a huge upgrade over e90 and may even do more than that if they can reliably do as many segments a day as a320, have lower per trip cost than a320 for the longer distance flights and do red eye flights. If that can be done and they actually do have a non trivial per trip cost advantage over a320neo on routes like bos aus, then it completely expands the scope they would be able to use it in the system. They would actually be able to take 100 e2s rather than just 60. I would love to see one based at fll to really fill out the map from there. And on flights like bos aus or bos msp, they can have more frequency that would not make sense on a320.

If what I hear about c series is true, then it opens up even more possibilities. Then from fll, you can do trips to sea, pdx, San, slc, den, phx which are probably to hard to fill on a320 but would work on a 120 seater. They could even add a 2 row 2 by 2 first class cabin with same pitch as ems which would have demand for the longer range flights. Since that would only mean 2 less seats, it doesn’t hurt cost that much. They can price it pretty aggressively. Maybe you have that for cs300 and keep it to all y for cs100. Even routes like jfk smf/oak/sjc/rno/psp/slc could be switched to that. A320 really does not get great yields on these flights.

And I agree c series will look good out of lga.
 
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Goodyear
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Re: Embraer pitches E195-E2 at JetBlue

Sat Mar 03, 2018 12:25 am

That apparently half of the posters in this thread know my entire career history without ever having met me is quite entertaining, to say the least. An office worker? Thank you for the comic relief. JetBlue fanboys seem to have taken place of the former Delta ones on this forum, with any dissent that doesn't praise JetBlue's myriad strategic errors/blunders being met with personal attack. Sad! For example, how did the LGB E190 hub work out?

I happen to like JetBlue and its employees. May their management not repeat the mistakes of the past and make smarter fleet choices going forward. If they pick a similar path this time they deserve to be taken over by an airline with competent management. After all, the rank and file would deserve better leadership.

With B6 losing out to the VX takeover bid to Alaska - of all airlines - says a lot. I personally think the writing is on the wall for B6, and the best thing that could happen to their employees would be a takeover by one of the majors.

By the way, where's the pilot contract?
 
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Re: Embraer pitches E195-E2 at JetBlue

Sat Mar 03, 2018 12:55 am

Jomar777 wrote:
Stick to facts - the E-Series sold much more than the C-Series can actually dream in selling right now. Yes, the E2 has less orders but the whole E Program is a different fact.

I’m not sure exactly what you’re getting at here as the sentence doesn’t quite make sense, but I’ll take a stab. The previous E-Jet program has sold nearly 1400 copies. That’s a good number. It may even sell more if the E175 E2 fails. I would consider 1400 not an easy but possible number for the CSeries considering Boeing’s forecast for 2000 CSeries. A fairier comparison would be to eliminate the E170 and E175 from the discussion as the CRJ competes with those, not the CSeries. The 737 and A320 are competitors, but the 737-600 and A321 are not so we don’t do that comparison, same here. In that case it’s about 700 orders. The CSeries is almost half way there already


767333ER: His sentence made perfect sense. I completely understood what he was saying.
 
StudiodeKadent
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Re: Embraer pitches E195-E2 at JetBlue

Sat Mar 03, 2018 1:29 pm

ExMilitaryEng wrote:
As you say, if B6 is strictly interested in lowering CASMs on its current thinner/shorter routes, then the E195E2 should win. B6 would also save on crew trg costs, and convert favorably the 20 undelivered E190s.


I entirely agree here.

However, with Delta CSeries coming in JFK (or LGA?), B6 will have to match this new competition. Passager comfort, transcon capabilities and lower CASM would now be critical factors.


Last I checked, Delta's CS100s are going to be used exclusively on regional routes (1000nmi average stage length apparently), I read an interview which suggested they'll be paper-derated too. Transcon capability isn't needed. The comfort difference is small and on short routes not really noticeable, plus an E2-195 will be closer to the A320 product than a CS100 would be. And I think the E195-E2 has a slightly lower CASM than a CS100.

Unless JetBlue really need a smaller-than-a320 transcon-capable craft, the E2-195 seems the most reasonable choice. Its also very consistent with JetBlue's current seating product.

Of course I guess in theory JetBlue could get E2-190s and install a mini-Mint cabin with Vantage XLs up the front (for tiny-jet transcon)... but who knows.
 
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Re: Embraer pitches E195-E2 at JetBlue

Sat Mar 03, 2018 3:34 pm

StudiodeKadent wrote:
Last I checked, Delta's CS100s are going to be used exclusively on regional routes (1000nmi average stage length apparently), I read an interview which suggested they'll be paper-derated too.

"Average" is the key word here. They could have longer flights (even transcon?) mixed with shorter flights, as long as the average is 1000 NM. (When we know that even B6 A320s usage averages less than 1000 NM, this "1000 NM" avg restriction might be practically meaningless...)

Worst case, B6 may just pay BBD to lift this paper restriction for just a few of its CS100s.

Anyways you look at it, Delta's CSeries competition in JFK (and/or LGA?) will reinforce the importance of the comfort, range and CASM criterion.
StudiodeKadent wrote:
And I think the E195-E2 has a slightly lower CASM than a CS100.
I also have that belief. That's why B6 would pick the CS300, for way better CASM. (For a marginal increase in trip costs). They can manage the additional seat capacity.
 
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Re: Embraer pitches E195-E2 at JetBlue

Sat Mar 03, 2018 4:01 pm

ExMilitaryEng wrote:
StudiodeKadent wrote:
Last I checked, Delta's CS100s are going to be used exclusively on regional routes (1000nmi average stage length apparently), I read an interview which suggested they'll be paper-derated too.

"Average" is the key word here. They could have longer flights (even transcon?) mixed with shorter flights, as long as the average is 1000 NM. (When we know that even B6 A320s usage averages less than 1000 NM, this "1000 NM" avg restriction might be practically meaningless...)

Worst case, B6 may just pay BBD to lift this paper restriction for just a few of its CS100s.

Anyways you look at it, Delta's CSeries competition in JFK (and/or LGA?) will reinforce the importance of the comfort, range and CASM criterion.
StudiodeKadent wrote:
And I think the E195-E2 has a slightly lower CASM than a CS100.
I also have that belief. That's why B6 would pick the CS300, for way better CASM. (For a marginal increase in trip costs). They can manage the additional seat capacity.

I think the most important factor will be pricing. This will be a multifaceted competition. Due to crew costs, I'd bet on an upgauged fleet. It could be E2-195 or a mixed CS100/300.

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Re: Embraer pitches E195-E2 at JetBlue

Sat Mar 03, 2018 4:02 pm

JB are in a fantastic position here, they are going to get a great deal either way. Airbus/Cseries to lose though.
 
StudiodeKadent
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Re: Embraer pitches E195-E2 at JetBlue

Sun Mar 04, 2018 2:05 am

Just wondering, in theory couldn't the E2-195 make transcon ranges?

The E2-195 has a brochure range of 2600nmi... or roughly 4800km. Let us presume this is true for a 120pax configuration, which seems to be pretty close to JetBlue's typical config given JetBlue have slightly lower seating density than most airlines.

Boston-Seattle is 4015km approx. Boston-San Francisco is 4360km approx. JFK to SFO and LAX? Both easier than Boston to SFO.

Obviously the brochure range is an overestimate or a "flattering estimate" of the jet's actual capabilities. But in a low-density config, especially if we look at the possibility of a "mini-mint" cabin along with a few rows of Even More Space (and of course a 32" pitch in main cabin)... the possibility of the E2-195 being transcon-capable doesn't seem remote.
 
nine4nine
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Re: Embraer pitches E195-E2 at JetBlue

Sun Mar 04, 2018 2:24 am

lightsaber wrote:
ExMilitaryEng wrote:
StudiodeKadent wrote:
Last I checked, Delta's CS100s are going to be used exclusively on regional routes (1000nmi average stage length apparently), I read an interview which suggested they'll be paper-derated too.

"Average" is the key word here. They could have longer flights (even transcon?) mixed with shorter flights, as long as the average is 1000 NM. (When we know that even B6 A320s usage averages less than 1000 NM, this "1000 NM" avg restriction might be practically meaningless...)

Worst case, B6 may just pay BBD to lift this paper restriction for just a few of its CS100s.

Anyways you look at it, Delta's CSeries competition in JFK (and/or LGA?) will reinforce the importance of the comfort, range and CASM criterion.
StudiodeKadent wrote:
And I think the E195-E2 has a slightly lower CASM than a CS100.
I also have that belief. That's why B6 would pick the CS300, for way better CASM. (For a marginal increase in trip costs). They can manage the additional seat capacity.

I think the most important factor will be pricing. This will be a multifaceted competition. Due to crew costs, I'd bet on an upgauged fleet. It could be E2-195 or a mixed CS100/300.

Lightsaber



Let’s hope the latter. The economics will factor the final decision from B6 and I think the C Series is the clear winner against the E2. And if Airbus can get a massive order for the CSeries at list price to avoid any issue on price dumping in exchange for a highly discounted 320/321 order to balance things out I think is a possibility.

From a passenger perspective I absolutely hate the EJets. Narrow fuselage, tiny overhead bins, and the small very widely spaced windows. I’ve been stuck staring at wall paneling on many flights.
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Re: Embraer pitches E195-E2 at JetBlue

Sun Mar 04, 2018 2:33 am

nine4nine wrote:
From a passenger perspective I absolutely hate the EJets. Narrow fuselage, tiny overhead bins, and the small very widely spaced windows. I’ve been stuck staring at wall paneling on many flights.


I have no desire to invalidate or contest your preferences, but lots of people find the EJets more comfortable than an A320 or 737. In addition the new E2s have larger overhead bins I think.
 
tphuang
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Re: Embraer pitches E195-E2 at JetBlue

Sun Mar 04, 2018 3:09 am

StudiodeKadent wrote:
Just wondering, in theory couldn't the E2-195 make transcon ranges?

The E2-195 has a brochure range of 2600nmi... or roughly 4800km. Let us presume this is true for a 120pax configuration, which seems to be pretty close to JetBlue's typical config given JetBlue have slightly lower seating density than most airlines.

Boston-Seattle is 4015km approx. Boston-San Francisco is 4360km approx. JFK to SFO and LAX? Both easier than Boston to SFO.

Obviously the brochure range is an overestimate or a "flattering estimate" of the jet's actual capabilities. But in a low-density config, especially if we look at the possibility of a "mini-mint" cabin along with a few rows of Even More Space (and of course a 32" pitch in main cabin)... the possibility of the E2-195 being transcon-capable doesn't seem remote.


A couple of problems with that given their E90 experience. They found that E90 cost to be higher on the longer segments (over 1000 miles) to the point that it's almost the same as A320, which has 50% more seats. If E2 has the same problem, then the cost of operating such longer segment is just no worth it. Secondly, JetBlue very rarely use E90 for red eye flights, which are absolutely necessary for transcon. Again, they'd have to convince B6 that both are no longer an issue on E90.

Add on top of that, in the winter, the west bound flights take a lot longer with wind factor. A320 routinely make tech stops and they have longer range than E2-195 from what I glean.
 
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Super80Fan
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Re: Embraer pitches E195-E2 at JetBlue

Sun Mar 04, 2018 3:35 am

B6 has routes/airports that can't handle an A320, they need a smaller aircraft in their fleet.
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dc10lover
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Re: Embraer pitches E195-E2 at JetBlue

Sun Mar 04, 2018 6:14 am

Then why not have JetBlue Airways lease one jet, put it in operation for awhile and see if they really like the aircraft. If economics are not up to par, then don't order any.
Why endure the nightmare and congestion of LAX when BUR, LGB, ONT & SNA is so much easier to fly in and out of. Same with OAK & SJC when it comes to SFO.
 
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Re: Embraer pitches E195-E2 at JetBlue

Sun Mar 04, 2018 8:20 am

This is Airbus order to lose. They can offer the best package deal - from the A (CS)-100 up to the A321...
 
ExMilitaryEng
Posts: 652
Joined: Mon May 01, 2017 7:12 pm

Re: Embraer pitches E195-E2 at JetBlue

Sun Mar 04, 2018 6:22 pm

RalXWB wrote:
This is Airbus order to lose. They can offer the best package deal - from the A (CS)-100 up to the A321...


Actually, Embraer should have been the front runner.

Even at similar pricings, chosing Embrear would allow crew trg savings and a favorable conversion of the 20 undelivered E190s.

Embraer can't efford to lose B6 due to the impact it'll have on future potential US sales. It also needs even more traction on this E2 program than BBD does on the CSeries.

So, there are no ways the E195E2 will be priced higher than the CS100. FWIW, Embraer priced ridiculously low the E190s at launching, they'll do the same with the E195E2.

(About a package deal involving A321s; we're not there yet. That would only occur if B6 delays the contract a few more months, until Airbus gets that 50.01% ownership).

This is rather an Embraer order to lose.
 
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LockheedBBD
Posts: 582
Joined: Wed May 31, 2017 6:59 pm

Re: Embraer pitches E195-E2 at JetBlue

Mon Mar 05, 2018 4:08 am

Everyone keeps mentioning the high operating costs of the E1. However, let's remember that JetBlue isn't looking to buy the E1, they are looking at the E2. The E2 will most likely be a significant improvement, and they've made many changes to the plane.
 
1900Driver
Posts: 137
Joined: Fri Apr 06, 2012 3:17 pm

Re: Embraer pitches E195-E2 at JetBlue

Mon Mar 05, 2018 4:39 am

DDR wrote:
Jomar777 wrote:
Stick to facts - the E-Series sold much more than the C-Series can actually dream in selling right now. Yes, the E2 has less orders but the whole E Program is a different fact.


767333ER: His sentence made perfect sense. I completely understood what he was saying.


You’re manipulating numbers and facts. Why not throw in the CRJ into the discussion since you include earlier Ejets into the fold.

Stick with direct comparisons. E2 - CS
 
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LockheedBBD
Posts: 582
Joined: Wed May 31, 2017 6:59 pm

Re: Embraer pitches E195-E2 at JetBlue

Mon Mar 05, 2018 5:49 am

Okcflyer wrote:
Most of the E190 high relative cost comes from two factors addressed in the E2.

    - Maintenance intervals on airframe and systems are lower than industry-leading (737/A320) . While the intervals are not out of line for regional aircraft, in this size (100+ seats), they're compared to their larger 737/A320 competitors with decades of perfection. Furthermore, the number of frames never grew (or expected to for that matter) large enough to commoditize and provide competition to manage cost. Many expect these costs to improve with the nearly 500 E175’s recently delivered in the USA that are substantially similar.

    - The CF-34-10E is a frankenstein of parts from CFM56 and CF34 platforms. IMHO, it is largest single problem with the original E190/195. Despite a larger fan and latest design (implementing PIPs, lessons learned, etC) its SFC is darn near 3% higher (worse!!) than the 30 year old, smaller fan version used on the E175s and CRJ's. Although reasonable at the time of development, the engine was a low-cost mashup of existing components to generate the 20K thrust required. No one was willing to do a clean-sheet, high spec engine for the platform 20 years ago as the risk was simply too high. Despite the understandable reasons, it has handicapped the 190/195 frame's potential. Due to low production volume and stranger components (despite the frankensteining), it's more costly to service than higher thrust CFM56's!

The E2's maintenance intervals are largely in line with the latest MAX/neo variants. Factor 1 from above solved.

Pratt's 73" GTF is the new power plant used on both CSeries and E2. This means for direct CSeries / EJet comparisons, engine selection is equal and doesn’t help or hurt either frame. Compared to the -10E, the GTF has nearly 20% lower SFC, a larger improvement than LEAP/GTF are in the 737/A320 market over NG/ceo. While SFC is still higher than the 81" GTF neo, drag and weight are materially less (30%!) and it is well optimized for the platform size. At macro market level, the GTF may possibility hurt both frames if reliability or costs become an issue. This segment of the market is dependent upon the GTF to perform well otherwise it will move upmarket to MAX-7 or A319/A320neo with CFM power. In summary, the single-platform, low volume, non-optimized -10E problems are gone with the E2.

Therefore, as the E1's drawbacks are understood and given the engines are equal, the competition for CSeries and E2 centers around one topic: Cost

The CSeries clean-sheet design uses high performance, advanced materials. About 25% is Al-Li instead of standard aluminum and nearly 50% composites. These materials increases performance and allow superior payload-range. However, these materials are expensive. This means the performance comes with cost. Furthermore, as a completely new airframe, significant investments in facilities, tooling, etc were required and must be recouped. If you need a small mainline to fly long routes at high utilization, the CSeries was advantages and the material investments will pay off. Also the extra butts in the CS300 may also be very important from a network perspective.

However, most jets in this size range are not flying long missions routinely nor at high utilization. In this case, capital cost is going to dominate the decision. This is where Embraer strategy lies. It’s E2 upgrade cost a small fraction of what the CSeries cost to develop. It’s smaller 175 sibling further amortizes manfacturing investments and provides meaningful credits to the design side. It uses low cost regular aluminum construction more broadly lowering manufacturing cost. Lower payload range capability lowers total weight and makes it more efficient on short flights that they expect will dominate the majority of the airtime. Together, the E2’s cost basis is a small fraction of CSeries. If you don’t need the high-end performance of the CSeries, Embraer is going to fight aggressively on price and they have plenty of room to do so without going bankrupt.

And that is the moral of this story. From a Performance perspective, it’s nearly impossible to argue that the CSeries doesn’t have the lead. However, this performance comes at great cost and it remains to be seen if the program can survive commercially. Does anyone expect CSeries to ever recoup its development investment? I surely don’t. In fact I predict is will be very difficult for Airbus and Bombarier to get manufacturing cost low enough to even generate acceptable margins on per-frame basis excluding development. The thing is just too damn expensive.

Meanwhile, EMB has minimal capital investment in upgrades, already profitable assembly platform, and a wide ranging strong performing support network in place.

EMB’s sale price is not dictated by manufacturing cost (as CSeries is) but by market price for the segment. EMB will seek to price just low enough under the CSeries to win the tender (or in comparison to larger NB’s). That delta will be their profit. In many cases, this pricing is likely to be under CSeries break even point for the next 3-5 years.

The cases like the Delta purchase cannot be the normal. This is really an investment to get the support network going to even allow it to compete long term. They need 25% price improvement to even begin to survive long term. I think there is where EMB has them beat, they can tweak pricing to win what they want to win by undercutting and yet still remain profitable.

I’d don’t see any way that Embraer doesn’t take 80-90% of the profits in this size category for the next 10 years. As profit is the overall objective and hats off to them for setting themselves up for future success.


:checkmark: :checkmark:

Great post and excellent analysis!
 
Okcflyer
Posts: 711
Joined: Sat May 23, 2015 11:10 pm

Re: Embraer pitches E195-E2 at JetBlue

Mon Mar 05, 2018 5:55 am

Grammatically Correct Post -- previous one asked to be removed.

Most of the E190 high relative cost comes from two factors addressed in the E2.

    - Maintenance intervals on airframe and systems are lower than industry-leading (737/A320) . While the intervals are not out of line for regional aircraft, in this size (100+ seats), they're compared to their larger 737/A320 competitors with decades of perfection. Furthermore, the number of frames never grew (or expected to for that matter) large enough to commoditize and provide competition to manage cost. Many expect these costs to improve with the nearly 500 E175’s recently delivered in the USA that are substantially similar.

    - The CF-34-10E is a frankenstein of parts from CFM56 and CF34 platforms. IMHO, it is largest single problem with the original E190/195. Despite a larger fan and latest design (implementing PIPs, lessons learned, etC) its SFC is darn near 3% higher (worse!!) than the 30 year old, smaller fan version used on the E175s and CRJ's. Although reasonable at the time of development, the engine was a low-cost mashup of existing components to generate the 20K thrust required. No one was willing to do a clean-sheet, high spec engine for the platform 20 years ago as the risk was simply too high. Despite the understandable reasons, it has handicapped the 190/195 frame's potential. Due to low production volume and stranger components (despite the frankensteining), it's more costly to service than higher thrust CFM56's!

The E2's maintenance intervals are largely in line with the latest MAX/neo variants. Factor 1 from above solved.

Pratt's 73" GTF is the new power plant used on both CSeries and E2. This means for direct CSeries / EJet comparisons, engine selection is equal and doesn’t help or hurt either frame. Compared to the -10E, the GTF has nearly 20% lower SFC, a larger improvement than LEAP/GTF are in the 737/A320 market over NG/ceo. While SFC is still higher than the 81" GTF neo, drag and weight are materially less (30%!) and it is well optimized for the platform size. At macro market level, the GTF may possibility hurt both frames if reliability or costs become an issue. This segment of the market is dependent upon the GTF to perform well otherwise it will move upmarket to MAX-7 or A319/A320neo with CFM power. In summary, the single-platform, low volume, non-optimized -10E problems are gone with the E2.

Therefore, as the E1's drawbacks are understood and given the engines are equal, the competition for CSeries and E2 centers around one topic: Cost

The CSeries clean-sheet design uses high performance and advanced materials. About 25% is Al-Li instead of standard aluminum and nearly 50% is composite. These advanced materials increase performance and enable superior payload-range. Unfortunately, these materials are expensive meaning the outstanding performance comes with cost. As a completely new airframe unrelated to the smaller CRJ line, significant investments in facilities, tooling, spares are required. All investments are intended to be recouped which means these add additional cost to the frame.

If an airline needs a small mainline plane to fly long routes at high utilization, the CSeries has fundamental advantages and the advance material investments will pay out. The extra butts in the CS300 will also be a key factor in some tenders as the 4-wide fuse of the E2 is stretched to max with the new 195.

Bombardier (and now Airbus by extension) problem is -- most jets in this size category are not flying long missions routinely or are in high utilization services. For these networks, lower purchase price dominates the decision criteria. This is the heart of Embraer's strategy.

In terms of development cost and recoupment, the E2 upgrade investment is a small fraction of what the CSeries development totals. As the E2 shares its platform with the smaller E175 sibling, this further amortizes manufacturing and development investments. The CSeries has no synergies with the CRJ platform to share investment cost amongst a larger market.

E2 mostly uses regular aviation aluminium at significant manufacturing cost savings over advanced materials. While the material choice does limit E2's performance at the extreme end, the heart of the market is in the 1000nm range. With wings optimized for shorter distances coupled with weight savings through performance reduction, the E2 carries a trip and CASM advantage on short flights, the same flights making up the super-majority of current routes flown.

Together, the lower development costs, shared development with regional market, and material choice means Embraer has a significantly lower cost basis on a per-frame basis.

Embarer's sale price is not dictated by manufacturing cost like the CSeries is but by market price based upon requirements of the tender. Reports are the CSeries is more costly to build than a A320 or 738. . The market price is likely to remain materially above E2 break-even cost whereas the market price is believed to be below the CSeries manufacturing cost originally assumed acceptable. Yes, significant efforts are underway with Airbus's help to improve here otherwise it's spells doom for the platform. Fundamentally, it will always have higher cost than E2 due to advanced material usage and smaller market size (110-130 seat vs 76-120 seat and new facility investments)

Tender cases like the recent Delta purchase cannot continue and the platform survive. The price Delta paid does not appreciate or reward the advanced material investments in the CSeries. In fact, rumor is the frame is significantly paper-derated and right in the wheelhouse that the E2 is optimized for. A possible insight that Embraer has correctly predicted the optimal point.

Embraer is likely guessing "minimum allowable" price by CSeries and slightly undershooting it to maximize profit (benefit of a duopoly!) If CSeries cuts it's hand off to win a tender, it's done at significant loss (investment in infrastructure). In general, Embraer is seeking to maximize profit and returns whereas CSeries is just trying to survive and hope future products on the platform bring additional value.

And that is the moral of this story. From a flight performance perspective, the CSeries is simply better. However, this performance comes at great cost and it remains to be seen if the program can survive commercially with present conditions. Does anyone expect CSeries to ever recoup its development investment? I don’t. In fact I suspect it will be very difficult for Airbus and Bombardier to get manufacturing cost low enough to even generate acceptable margins on per-frame basis excluding development. The thing is just too darn expensive.

I suspect Embraer takes 80-90% of the profits in this size category for the next 10 years. As profit is the overall objective, hats off to them for setting themselves up for future success.

In the case of JetBlue -- I suspect they're looking for a regional frame at low leasing or capital cost. Embraer should have the hand here assuming they don't get too greedy on pricing or Bombardier doesn't decide to invest millions more in losses to increase CSeries population and by extension support in the US of A.
 
Jomar777
Posts: 577
Joined: Tue Oct 20, 2015 8:45 am

Re: Embraer pitches E195-E2 at JetBlue

Mon Mar 05, 2018 8:46 am

1900Driver wrote:
DDR wrote:
Jomar777 wrote:
Stick to facts - the E-Series sold much more than the C-Series can actually dream in selling right now. Yes, the E2 has less orders but the whole E Program is a different fact.


767333ER: His sentence made perfect sense. I completely understood what he was saying.


You’re manipulating numbers and facts. Why not throw in the CRJ into the discussion since you include earlier Ejets into the fold.

Stick with direct comparisons. E2 - CS


There's no manipulation of facts. The E1 is very closely matched by the E2, being the latter, an upgrade of the whole program. If the CRJ was that evenly matched, it would be fulfilling the same market as the C-Series now and BBD would not struggle that much to shift the planes because it could count on a straight replacement which EMB hopes (only hope at present) to achieve, for example with B6.

So my comparison is justified, Check the facts
 
Thenoflyzone
Posts: 3048
Joined: Sun Jan 07, 2001 4:42 am

Re: Embraer pitches E195-E2 at JetBlue

Mon Mar 05, 2018 1:24 pm

ExMilitaryEng wrote:
RalXWB wrote:
This is Airbus order to lose. They can offer the best package deal - from the A (CS)-100 up to the A321...


Actually, Embraer should have been the front runner.

Even at similar pricings, chosing Embrear would allow crew trg savings and a favorable conversion of the 20 undelivered E190s.

Embraer can't efford to lose B6 due to the impact it'll have on future potential US sales. It also needs even more traction on this E2 program than BBD does on the CSeries.

So, there are no ways the E195E2 will be priced higher than the CS100. FWIW, Embraer priced ridiculously low the E190s at launching, they'll do the same with the E195E2.

(About a package deal involving A321s; we're not there yet. That would only occur if B6 delays the contract a few more months, until Airbus gets that 50.01% ownership).

This is rather an Embraer order to lose.


I agree.

BBD already has some big name carriers which ordered the CSeries, be it in North America, Asia or Europe. That is not the case with the E2. They need this B6 order more than BBD. So it is their's to lose in fact, not BBD's.
us Air Traffic Controllers have a good record, we haven't left one up there yet !!
 
tphuang
Posts: 5695
Joined: Tue Mar 14, 2017 2:04 pm

Re: Embraer pitches E195-E2 at JetBlue

Mon Mar 05, 2018 3:03 pm

Okcflyer wrote:
Grammatically Correct Post -- previous one asked to be removed.

Most of the E190 high relative cost comes from two factors addressed in the E2.

    - Maintenance intervals on airframe and systems are lower than industry-leading (737/A320) . While the intervals are not out of line for regional aircraft, in this size (100+ seats), they're compared to their larger 737/A320 competitors with decades of perfection. Furthermore, the number of frames never grew (or expected to for that matter) large enough to commoditize and provide competition to manage cost. Many expect these costs to improve with the nearly 500 E175’s recently delivered in the USA that are substantially similar.

    - The CF-34-10E is a frankenstein of parts from CFM56 and CF34 platforms. IMHO, it is largest single problem with the original E190/195. Despite a larger fan and latest design (implementing PIPs, lessons learned, etC) its SFC is darn near 3% higher (worse!!) than the 30 year old, smaller fan version used on the E175s and CRJ's. Although reasonable at the time of development, the engine was a low-cost mashup of existing components to generate the 20K thrust required. No one was willing to do a clean-sheet, high spec engine for the platform 20 years ago as the risk was simply too high. Despite the understandable reasons, it has handicapped the 190/195 frame's potential. Due to low production volume and stranger components (despite the frankensteining), it's more costly to service than higher thrust CFM56's!

The E2's maintenance intervals are largely in line with the latest MAX/neo variants. Factor 1 from above solved.

Pratt's 73" GTF is the new power plant used on both CSeries and E2. This means for direct CSeries / EJet comparisons, engine selection is equal and doesn’t help or hurt either frame. Compared to the -10E, the GTF has nearly 20% lower SFC, a larger improvement than LEAP/GTF are in the 737/A320 market over NG/ceo. While SFC is still higher than the 81" GTF neo, drag and weight are materially less (30%!) and it is well optimized for the platform size. At macro market level, the GTF may possibility hurt both frames if reliability or costs become an issue. This segment of the market is dependent upon the GTF to perform well otherwise it will move upmarket to MAX-7 or A319/A320neo with CFM power. In summary, the single-platform, low volume, non-optimized -10E problems are gone with the E2.

Therefore, as the E1's drawbacks are understood and given the engines are equal, the competition for CSeries and E2 centers around one topic: Cost

The CSeries clean-sheet design uses high performance and advanced materials. About 25% is Al-Li instead of standard aluminum and nearly 50% is composite. These advanced materials increase performance and enable superior payload-range. Unfortunately, these materials are expensive meaning the outstanding performance comes with cost. As a completely new airframe unrelated to the smaller CRJ line, significant investments in facilities, tooling, spares are required. All investments are intended to be recouped which means these add additional cost to the frame.

If an airline needs a small mainline plane to fly long routes at high utilization, the CSeries has fundamental advantages and the advance material investments will pay out. The extra butts in the CS300 will also be a key factor in some tenders as the 4-wide fuse of the E2 is stretched to max with the new 195.

Bombardier (and now Airbus by extension) problem is -- most jets in this size category are not flying long missions routinely or are in high utilization services. For these networks, lower purchase price dominates the decision criteria. This is the heart of Embraer's strategy.

In terms of development cost and recoupment, the E2 upgrade investment is a small fraction of what the CSeries development totals. As the E2 shares its platform with the smaller E175 sibling, this further amortizes manufacturing and development investments. The CSeries has no synergies with the CRJ platform to share investment cost amongst a larger market.

E2 mostly uses regular aviation aluminium at significant manufacturing cost savings over advanced materials. While the material choice does limit E2's performance at the extreme end, the heart of the market is in the 1000nm range. With wings optimized for shorter distances coupled with weight savings through performance reduction, the E2 carries a trip and CASM advantage on short flights, the same flights making up the super-majority of current routes flown.

Together, the lower development costs, shared development with regional market, and material choice means Embraer has a significantly lower cost basis on a per-frame basis.

Embarer's sale price is not dictated by manufacturing cost like the CSeries is but by market price based upon requirements of the tender. Reports are the CSeries is more costly to build than a A320 or 738. . The market price is likely to remain materially above E2 break-even cost whereas the market price is believed to be below the CSeries manufacturing cost originally assumed acceptable. Yes, significant efforts are underway with Airbus's help to improve here otherwise it's spells doom for the platform. Fundamentally, it will always have higher cost than E2 due to advanced material usage and smaller market size (110-130 seat vs 76-120 seat and new facility investments)

Tender cases like the recent Delta purchase cannot continue and the platform survive. The price Delta paid does not appreciate or reward the advanced material investments in the CSeries. In fact, rumor is the frame is significantly paper-derated and right in the wheelhouse that the E2 is optimized for. A possible insight that Embraer has correctly predicted the optimal point.

Embraer is likely guessing "minimum allowable" price by CSeries and slightly undershooting it to maximize profit (benefit of a duopoly!) If CSeries cuts it's hand off to win a tender, it's done at significant loss (investment in infrastructure). In general, Embraer is seeking to maximize profit and returns whereas CSeries is just trying to survive and hope future products on the platform bring additional value.

And that is the moral of this story. From a flight performance perspective, the CSeries is simply better. However, this performance comes at great cost and it remains to be seen if the program can survive commercially with present conditions. Does anyone expect CSeries to ever recoup its development investment? I don’t. In fact I suspect it will be very difficult for Airbus and Bombardier to get manufacturing cost low enough to even generate acceptable margins on per-frame basis excluding development. The thing is just too darn expensive.

I suspect Embraer takes 80-90% of the profits in this size category for the next 10 years. As profit is the overall objective, hats off to them for setting themselves up for future success.

In the case of JetBlue -- I suspect they're looking for a regional frame at low leasing or capital cost. Embraer should have the hand here assuming they don't get too greedy on pricing or Bombardier doesn't decide to invest millions more in losses to increase CSeries population and by extension support in the US of A.


While on paper and flight testing, E2 may have improved, Jetblue will need to be convinced that it can maintain that performance when they do multiple segments a day. Much of what you mentioned here is on discussion. Embraer has a lot to do to convince JetBlue that they can utilize it 12 hours a day like they do with the A320s, fly during night and have real meaningful cost advantages over A320NEO.

As for your last sentence, E90s are used the way they are out of necessity, not because JetBlue didn't want to use them for longer ranged routes. This is more than just a E90 replacement for JetBlue. If Embraer forms a partnership with Boeing and get picked, JetBlue could use that as an opportunity to not only buy E2, but also NMA down the road, which would be great for building their BOS/FLL hubs. If Airbus/Bombardier is picked, they could go with a CS100, CS300, A320 and A321 mix which would allow them to right size many midcon and transcon markets which are flown at very low yield by A320s right now. And down the road if CS500 get developed, A320 could get phased out in favour of a CS100/300/500/A321 for the 110, 135, 160, 200 seat markets with LR and mint for premium markets. Airbus would be very incentivized to make JetBlue an all airbus customer for a long time.

Bottom line is Embraer/Boeing better price this low, because Airbus has a lot of incentives to make a very attractive offer to JetBlue.
 
1900Driver
Posts: 137
Joined: Fri Apr 06, 2012 3:17 pm

Re: Embraer pitches E195-E2 at JetBlue

Mon Mar 05, 2018 3:43 pm

Jomar777 wrote:
1900Driver wrote:
DDR wrote:
Jomar777 wrote:
Stick to facts - the E-Series sold much more than the C-Series can actually dream in selling right now. Yes, the E2 has less orders but the whole E Program is a different fact.


767333ER: His sentence made perfect sense. I completely understood what he was saying.


You’re manipulating numbers and facts. Why not throw in the CRJ into the discussion since you include earlier Ejets into the fold.

Stick with direct comparisons. E2 - CS


There's no manipulation of facts. The E1 is very closely matched by the E2, being the latter, an upgrade of the whole program. If the CRJ was that evenly matched, it would be fulfilling the same market as the C-Series now and BBD would not struggle that much to shift the planes because it could count on a straight replacement which EMB hopes (only hope at present) to achieve, for example with B6.

So my comparison is justified, Check the facts


Being sarcastic for a reason. E1 is a generation behind, despite it’s similarities to E2.

CS is a brand new program, and E2 is the only viable competitor.
 
1900Driver
Posts: 137
Joined: Fri Apr 06, 2012 3:17 pm

Re: Embraer pitches E195-E2 at JetBlue

Mon Mar 05, 2018 3:43 pm

Thenoflyzone wrote:
ExMilitaryEng wrote:
RalXWB wrote:
This is Airbus order to lose. They can offer the best package deal - from the A (CS)-100 up to the A321...


Actually, Embraer should have been the front runner.

Even at similar pricings, chosing Embrear would allow crew trg savings and a favorable conversion of the 20 undelivered E190s.

Embraer can't efford to lose B6 due to the impact it'll have on future potential US sales. It also needs even more traction on this E2 program than BBD does on the CSeries.

So, there are no ways the E195E2 will be priced higher than the CS100. FWIW, Embraer priced ridiculously low the E190s at launching, they'll do the same with the E195E2.

(About a package deal involving A321s; we're not there yet. That would only occur if B6 delays the contract a few more months, until Airbus gets that 50.01% ownership).

This is rather an Embraer order to lose.


I agree.

BBD already has some big name carriers which ordered the CSeries, be it in North America, Asia or Europe. That is not the case with the E2. They need this B6 order more than BBD. So it is their's to lose in fact, not BBD's.


Exactly!
 
Nean1
Posts: 444
Joined: Mon May 30, 2016 11:08 pm

Re: Embraer pitches E195-E2 at JetBlue

Mon Mar 05, 2018 4:16 pm

tphuang wrote:
Okcflyer wrote:
Grammatically Correct Post -- previous one asked to be removed.

Most of the E190 high relative cost comes from two factors addressed in the E2.

    - Maintenance intervals on airframe and systems are lower than industry-leading (737/A320) . While the intervals are not out of line for regional aircraft, in this size (100+ seats), they're compared to their larger 737/A320 competitors with decades of perfection. Furthermore, the number of frames never grew (or expected to for that matter) large enough to commoditize and provide competition to manage cost. Many expect these costs to improve with the nearly 500 E175’s recently delivered in the USA that are substantially similar.

    - The CF-34-10E is a frankenstein of parts from CFM56 and CF34 platforms. IMHO, it is largest single problem with the original E190/195. Despite a larger fan and latest design (implementing PIPs, lessons learned, etC) its SFC is darn near 3% higher (worse!!) than the 30 year old, smaller fan version used on the E175s and CRJ's. Although reasonable at the time of development, the engine was a low-cost mashup of existing components to generate the 20K thrust required. No one was willing to do a clean-sheet, high spec engine for the platform 20 years ago as the risk was simply too high. Despite the understandable reasons, it has handicapped the 190/195 frame's potential. Due to low production volume and stranger components (despite the frankensteining), it's more costly to service than higher thrust CFM56's!

The E2's maintenance intervals are largely in line with the latest MAX/neo variants. Factor 1 from above solved.




Pratt's 73" GTF is the new power plant used on both CSeries and E2. This means for direct CSeries / EJet comparisons, engine selection is equal and doesn’t help or hurt either frame. Compared to the -10E, the GTF has nearly 20% lower SFC, a larger improvement than LEAP/GTF are in the 737/A320 market over NG/ceo. While SFC is still higher than the 81" GTF neo, drag and weight are materially less (30%!) and it is well optimized for the platform size. At macro market level, the GTF may possibility hurt both frames if reliability or costs become an issue. This segment of the market is dependent upon the GTF to perform well otherwise it will move upmarket to MAX-7 or A319/A320neo with CFM power. In summary, the single-platform, low volume, non-optimized -10E problems are gone with the E2.

Therefore, as the E1's drawbacks are understood and given the engines are equal, the competition for CSeries and E2 centers around one topic: Cost

The CSeries clean-sheet design uses high performance and advanced materials. About 25% is Al-Li instead of standard aluminum and nearly 50% is composite. These advanced materials increase performance and enable superior payload-range. Unfortunately, these materials are expensive meaning the outstanding performance comes with cost. As a completely new airframe unrelated to the smaller CRJ line, significant investments in facilities, tooling, spares are required. All investments are intended to be recouped which means these add additional cost to the frame.

If an airline needs a small mainline plane to fly long routes at high utilization, the CSeries has fundamental advantages and the advance material investments will pay out. The extra butts in the CS300 will also be a key factor in some tenders as the 4-wide fuse of the E2 is stretched to max with the new 195.

Bombardier (and now Airbus by extension) problem is -- most jets in this size category are not flying long missions routinely or are in high utilization services. For these networks, lower purchase price dominates the decision criteria. This is the heart of Embraer's strategy.

In terms of development cost and recoupment, the E2 upgrade investment is a small fraction of what the CSeries development totals. As the E2 shares its platform with the smaller E175 sibling, this further amortizes manufacturing and development investments. The CSeries has no synergies with the CRJ platform to share investment cost amongst a larger market.

E2 mostly uses regular aviation aluminium at significant manufacturing cost savings over advanced materials. While the material choice does limit E2's performance at the extreme end, the heart of the market is in the 1000nm range. With wings optimized for shorter distances coupled with weight savings through performance reduction, the E2 carries a trip and CASM advantage on short flights, the same flights making up the super-majority of current routes flown.

Together, the lower development costs, shared development with regional market, and material choice means Embraer has a significantly lower cost basis on a per-frame basis.

Embarer's sale price is not dictated by manufacturing cost like the CSeries is but by market price based upon requirements of the tender. Reports are the CSeries is more costly to build than a A320 or 738. . The market price is likely to remain materially above E2 break-even cost whereas the market price is believed to be below the CSeries manufacturing cost originally assumed acceptable. Yes, significant efforts are underway with Airbus's help to improve here otherwise it's spells doom for the platform. Fundamentally, it will always have higher cost than E2 due to advanced material usage and smaller market size (110-130 seat vs 76-120 seat and new facility investments)

Tender cases like the recent Delta purchase cannot continue and the platform survive. The price Delta paid does not appreciate or reward the advanced material investments in the CSeries. In fact, rumor is the frame is significantly paper-derated and right in the wheelhouse that the E2 is optimized for. A possible insight that Embraer has correctly predicted the optimal point.

Embraer is likely guessing "minimum allowable" price by CSeries and slightly undershooting it to maximize profit (benefit of a duopoly!) If CSeries cuts it's hand off to win a tender, it's done at significant loss (investment in infrastructure). In general, Embraer is seeking to maximize profit and returns whereas CSeries is just trying to survive and hope future products on the platform bring additional value.

And that is the moral of this story. From a flight performance perspective, the CSeries is simply better. However, this performance comes at great cost and it remains to be seen if the program can survive commercially with present conditions. Does anyone expect CSeries to ever recoup its development investment? I don’t. In fact I suspect it will be very difficult for Airbus and Bombardier to get manufacturing cost low enough to even generate acceptable margins on per-frame basis excluding development. The thing is just too darn expensive.

I suspect Embraer takes 80-90% of the profits in this size category for the next 10 years. As profit is the overall objective, hats off to them for setting themselves up for future success.

In the case of JetBlue -- I suspect they're looking for a regional frame at low leasing or capital cost. Embraer should have the hand here assuming they don't get too greedy on pricing or Bombardier doesn't decide to invest millions more in losses to increase CSeries population and by extension support in the US of A.


While on paper and flight testing, E2 may have improved, Jetblue will need to be convinced that it can maintain that performance when they do multiple segments a day. Much of what you mentioned here is on discussion. Embraer has a lot to do to convince JetBlue that they can utilize it 12 hours a day like they do with the A320s, fly during night and have real meaningful cost advantages over A320NEO.

As for your last sentence, E90s are used the way they are out of necessity, not because JetBlue didn't want to use them for longer ranged routes. This is more than just a E90 replacement for JetBlue. If Embraer forms a partnership with Boeing and get picked, JetBlue could use that as an opportunity to not only buy E2, but also NMA down the road, which would be great for building their BOS/FLL hubs. If Airbus/Bombardier is picked, they could go with a CS100, CS300, A320 and A321 mix which would allow them to right size many midcon and transcon markets which are flown at very low yield by A320s right now. And down the road if CS500 get developed, A320 could get phased out in favour of a CS100/300/500/A321 for the 110, 135, 160, 200 seat markets with LR and mint for premium markets. Airbus would be very incentivized to make JetBlue an all airbus customer for a long time.

Bottom line is Embraer/Boeing better price this low, because Airbus has a lot of incentives to make a very attractive offer to JetBlue.



tphuang,

Airbus's intention to increase production of the A320 family to up to 70 units / month is in direct contradiction with the objective of further promoting the CS300 and developing the CS500. In fact, it is quite likely that the motivator for the acquisition of CSeries by Airbus remains defensive, eliminating a competitor and preventing it from joining another company.

One reading is that Airbus has purchased a dubious value option at very low disbursement. If the product persuade the market by its merits, despite a higher acquisition cost, very good. Otherwise...well in this case there will be time to philosophize how the market is so competitive and changeable.
 
tphuang
Posts: 5695
Joined: Tue Mar 14, 2017 2:04 pm

Re: Embraer pitches E195-E2 at JetBlue

Mon Mar 05, 2018 4:41 pm

Nean1 wrote:
tphuang wrote:

While on paper and flight testing, E2 may have improved, Jetblue will need to be convinced that it can maintain that performance when they do multiple segments a day. Much of what you mentioned here is on discussion. Embraer has a lot to do to convince JetBlue that they can utilize it 12 hours a day like they do with the A320s, fly during night and have real meaningful cost advantages over A320NEO.

As for your last sentence, E90s are used the way they are out of necessity, not because JetBlue didn't want to use them for longer ranged routes. This is more than just a E90 replacement for JetBlue. If Embraer forms a partnership with Boeing and get picked, JetBlue could use that as an opportunity to not only buy E2, but also NMA down the road, which would be great for building their BOS/FLL hubs. If Airbus/Bombardier is picked, they could go with a CS100, CS300, A320 and A321 mix which would allow them to right size many midcon and transcon markets which are flown at very low yield by A320s right now. And down the road if CS500 get developed, A320 could get phased out in favour of a CS100/300/500/A321 for the 110, 135, 160, 200 seat markets with LR and mint for premium markets. Airbus would be very incentivized to make JetBlue an all airbus customer for a long time.

Bottom line is Embraer/Boeing better price this low, because Airbus has a lot of incentives to make a very attractive offer to JetBlue.



tphuang,

Airbus's intention to increase production of the A320 family to up to 70 units / month is in direct contradiction with the objective of further promoting the CS300 and developing the CS500. In fact, it is quite likely that the motivator for the acquisition of CSeries by Airbus remains defensive, eliminating a competitor and preventing it from joining another company.

One reading is that Airbus has purchased a dubious value option at very low disbursement. If the product persuade the market by its merits, despite a higher acquisition cost, very good. Otherwise...well in this case there will be time to philosophize how the market is so competitive and changeable.


Airbus increased production to 70 units because of the demand for A320 and A321NEO, which do not compete with CS300 at all. In B6 service, CS300 would fit in quite nicely between 110 seater and 160 seat A320. Whether or not they develop CS500 is a different story. If they do, then B6 can replace A320 with CS500. If they don't, B6 can just go wih CS100/300/A320/A321 lineup and right size markets accordingly. That's something Embraer cannot offer by itself, so it would have to severely discount E2 to compete. However, with Boeing partnership, let's see what they can come up with. I'm sure this is all part of the ongoing discussions.

As I said above, Airbus has every incentive to make B6 an exclusive airbus customer. Especially since B6 may add in widebodies in the future if the A321LR flying do well. B6 is finally at a position where it has an opportunity to go exclusively with Airbus offerings or Airbus + Embraer/Boeing JV. By pure luck, B6 is now in a stronger position than it has ever been/or will be (considering it's size).

It really likes A321. If Airbus is willing to give B6 greater discount A321NEO and LR further as a package deal for C Series, that would be very tempting. On the other hand, if Boeing/Embraer JV does go through, Boeing could see it as a way to be back in the picture and work with Embraer to offer their package deal. Embraer by itself would only have the option to price lower on E2.

so please stop with the "C Series can only sell if it's discounted below production cost". There is so much more at play here.
 
ExMilitaryEng
Posts: 652
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Re: Embraer pitches E195-E2 at JetBlue

Mon Mar 05, 2018 4:55 pm

Nean1 wrote:
tphuang,
Airbus's intention to increase production of the A320 family to up to 70 units / month is in direct contradiction with the objective of further promoting the CS300 and developing the CS500. In fact, it is quite likely that the motivator for the acquisition of CSeries by Airbus remains defensive, eliminating a competitor and preventing it from joining another company.

Actually, the increase in production of the A320 family is a direct proof of Airbus's interest to shorten delivery backlog as soon as possible, nothing else.

An eventual CS500 is far in the future (if ever) and is definitely not a relevant factor here, anyways you look at it. A CS500 would eventually be launched if damages to Boeing is higher than any possible cannibalization of A320 sales. It will also be launched if Airbus decides to move up in capacity (i.e. a "A320.5, A321 and A322 NEOs" scenario)

The CS100/CS300 tandem definitely covers a sector that Airbus (and Boeing) lost / abandoned. The CS100/300 is definitely an asset & a complement to current Airbus offering. From my YMX contacts, the Airbus detailed review of the CSeries program was all about streamlining production, cutting off excessive sub-assemblies/toolings/supplies costs and how to expedite production ramp up efficiently. And that's the most efficient way of employing those 2000 YMX CSeries FAL employees Airbus will be committed to pay for years to come.

Believe me, the "eliminating a competitor" scenario is extremely remote and unlikely.

(About the A319 NEO, its more of a liability than an asset - wasting valuable production slots that are delaying more profitable A321 sales).
 
Nean1
Posts: 444
Joined: Mon May 30, 2016 11:08 pm

Re: Embraer pitches E195-E2 at JetBlue

Mon Mar 05, 2018 6:36 pm

tphuang and ExMilitaryEng,

To say that the CS300 (max 160 passengers) does not compete with the A320 is a statement that is at least controversial. The large migration of sales of the A319 (maximum 160) to the A320 (maximum 190) of the NEO generation is proof of the attraction of this class of aircraft:
- Wide customer base;
- Common cockpit and more favorable passenger / crew ratio;
- Increased passenger capacity in the context of air traffic growth.

The capacity gap between A319 and A320 (+ 19%) is similar to that separating 190E2 from CS100 (17%). Apparently, all the controversy around the Boeing and BBD dispute has created an environment conducive to the thesis that aircraft do not compete with each other, each would had a peculiar niche.

Airbus' strategy for the single-aisle aircraft segment predated the business with BBD and did not change:
- Developed from a reasonably updated platform;
- Maintain the possibility of 2 different engines;
- Decentralize production to circumvent protectionist forces;
- Aggressively reduce costs and profit margins, signaling to competitors and potential entrants that life will not be easy

Most likely the strategy followed for Airbus was more damaging to BBD than the competition represented by Boeing, due the modernity and option to use PW GTF engines.
 
tphuang
Posts: 5695
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Re: Embraer pitches E195-E2 at JetBlue

Mon Mar 05, 2018 7:36 pm

Nean1 wrote:
tphuang and ExMilitaryEng,

To say that the CS300 (max 160 passengers) does not compete with the A320 is a statement that is at least controversial. The large migration of sales of the A319 (maximum 160) to the A320 (maximum 190) of the NEO generation is proof of the attraction of this class of aircraft:
- Wide customer base;
- Common cockpit and more favorable passenger / crew ratio;
- Increased passenger capacity in the context of air traffic growth.

The capacity gap between A319 and A320 (+ 19%) is similar to that separating 190E2 from CS100 (17%). Apparently, all the controversy around the Boeing and BBD dispute has created an environment conducive to the thesis that aircraft do not compete with each other, each would had a peculiar niche.

Airbus' strategy for the single-aisle aircraft segment predated the business with BBD and did not change:
- Developed from a reasonably updated platform;
- Maintain the possibility of 2 different engines;
- Decentralize production to circumvent protectionist forces;
- Aggressively reduce costs and profit margins, signaling to competitors and potential entrants that life will not be easy

Most likely the strategy followed for Airbus was more damaging to BBD than the competition represented by Boeing, due the modernity and option to use PW GTF engines.


None of what you said here invalidates the basic premise that there is a huge gap between e90 and a320 (100 to 162). Ordering both cs100 and 300 would legitimately fill out the gaps by having something in 110 to 120 seat and 130 to 140 seat rangeand use them on longer missions that a320 is simply too large for. E95 would be an upgrade also, but it doesn’t cover the gap as well, which is why from a product point of view, c series makes sense. Now from a cost point of view, picking e2 makes sense but airbus could really change that with some kind of all airbus grand plan for JetBlue.
 
ExMilitaryEng
Posts: 652
Joined: Mon May 01, 2017 7:12 pm

Re: Embraer pitches E195-E2 at JetBlue

Mon Mar 05, 2018 7:40 pm

Well Nean1, I'll re-use your same sentence, with a slight change :smile: :

"To say that the CS300 (max 160 passengers) does not complement the A320 (Max 190 pass) is a statement that is at least controversial".

It's obvious that the CS100/CS300 tandem will complement current Airbus A320/A321 offering (as opposed to compete with it).
 
marcogr12
Posts: 533
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Re: Embraer pitches E195-E2 at JetBlue

Mon Mar 05, 2018 8:03 pm

So if the E-jets are such a horror from an economic p.o.v (engines and all) how come so many european airlines are still using them and are not in a hurry to get rid of them and replace them with the new E2-jets or the C-Series? i'm talking about KLM-AF,AZ,LH,OS,BA..
Flying is breathing..no planes no life..
 
ExMilitaryEng
Posts: 652
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Re: Embraer pitches E195-E2 at JetBlue

Mon Mar 05, 2018 8:05 pm

Nean1 wrote:
Most likely the strategy followed for Airbus was more damaging to BBD than the competition represented by Boeing, due the modernity and option to use PW GTF engines.
Possibly (by example QR almost ordered the CSeries until the French ambassador intervention, on behalf of Airbus - but wow, having to continuously please Mr Al Baker; actually THANKS Mr ambassador... ).
But Boeing was by far the most aggressive/vicious/predatory (UA B737-700 @ $22M ea + that hypocrite dumping complaint).

Anyways, the NEOs "modernity / GTF option" reinforce even more the complementary aspect of the CSeries (helping a smoother transition from a FBW / side stick CSeries to a larger FBW / side stick Airbus NEO)
 
Nean1
Posts: 444
Joined: Mon May 30, 2016 11:08 pm

Re: Embraer pitches E195-E2 at JetBlue

Mon Mar 05, 2018 8:44 pm

I believe there is a very important attitude issue. Embraer has grown despite all the difficulties, it has always respected the strength of its competitors. On the other hand in much of history Embraer had its capacity underestimated when not ridiculed. Even with all the difficulties I think that in no phase of its history its future seem so promising.
 
Jomar777
Posts: 577
Joined: Tue Oct 20, 2015 8:45 am

Re: Embraer pitches E195-E2 at JetBlue

Tue Mar 06, 2018 9:45 am

1900Driver wrote:
Jomar777 wrote:
1900Driver wrote:

You’re manipulating numbers and facts. Why not throw in the CRJ into the discussion since you include earlier Ejets into the fold.

Stick with direct comparisons. E2 - CS


There's no manipulation of facts. The E1 is very closely matched by the E2, being the latter, an upgrade of the whole program. If the CRJ was that evenly matched, it would be fulfilling the same market as the C-Series now and BBD would not struggle that much to shift the planes because it could count on a straight replacement which EMB hopes (only hope at present) to achieve, for example with B6.

So my comparison is justified, Check the facts


Being sarcastic for a reason. E1 is a generation behind, despite it’s similarities to E2.

CS is a brand new program, and E2 is the only viable competitor.


The comparison here is the same between the B737 to the A320 family. Both programs started on different times and evolve to what we see today but their sales are still accounted respectively as one.

I do not see from where you come from on this specific point.

As for the C-Series being a brand new program - CORRECT!! But, if this program survives 9a BIG IF at present), you will see NEOs, NGs, etc. coming up in the future and they will still be regarded as C-Series because they would not be a clean sheet design.

As for comparison between the C-Series and the E2 family, the truth is that they really do not fit on the same bracket since the E2-195 barely competes in capacity and range with the CS-100 let alone with the CS300 which is more an A319/B737-MAX7 competitor. A move to the latter may only imply on a review of their strategy and subsequent type fitting.

For more than B6 complained about their E190s in the past (their first frames), the CS100, and even less the CS300, is not the direct replacement because it will cause a review on the Airline's operations.

I am not saying it will not happen but this is the reality since it will mean increase of capacity, change on some of the metrics and/or airports served plus other ancillary costs.

This is all PROVIDED Airbus (not BBD) can provide frames on a timeframe suitable to them and on a price level to what they want to pay and all this without another risk to be seen as another dumping order which will be simply too much.

Note also that the tie up between Boeing and Embraer has not gone away meaning that this may potentially push B6 to Airbus/BBD but others to Boeing/Embraer.

I actually expect both C-Series and E2 Series to sell reasonably well (price/delivery schedule permitting) as a result of a polarization of the market on this level just as we have on other levels. Both Boeing and Airbus need frames on this segment which they do not/cannot at present develop for an acceptable level of investiment.
 
Jomar777
Posts: 577
Joined: Tue Oct 20, 2015 8:45 am

Re: Embraer pitches E195-E2 at JetBlue

Tue Mar 06, 2018 10:40 am

1900Driver wrote:
Thenoflyzone wrote:
ExMilitaryEng wrote:

Actually, Embraer should have been the front runner.

Even at similar pricings, chosing Embrear would allow crew trg savings and a favorable conversion of the 20 undelivered E190s.

Embraer can't efford to lose B6 due to the impact it'll have on future potential US sales. It also needs even more traction on this E2 program than BBD does on the CSeries.

So, there are no ways the E195E2 will be priced higher than the CS100. FWIW, Embraer priced ridiculously low the E190s at launching, they'll do the same with the E195E2.

(About a package deal involving A321s; we're not there yet. That would only occur if B6 delays the contract a few more months, until Airbus gets that 50.01% ownership).

This is rather an Embraer order to lose.


I agree.

BBD already has some big name carriers which ordered the CSeries, be it in North America, Asia or Europe. That is not the case with the E2. They need this B6 order more than BBD. So it is their's to lose in fact, not BBD's.


Exactly!


NOT Exactly, I am sorry. Unless KL-AF, AZ, LH, AA, TP, etc.. suddenly became small airliners from one post to another.

Actually, one thing about E-Orders - NONE of them were heavily subsidised. When you also consider that the DL Order was also INHERITED rather than a brand new order, albeit dumped, then we have a clearer picture.

BBD does need B6 order but it is way too late for them since Airbus has now taken the project away (initial 51% for nothing plus the rest when/if the project does take off - it has not yet) .

Future is Airbus using the C-Series to plug the gap, by sacrificing the A319 on the way, to RJ and competing heads on against Boeing which will probably tie up with Embraer so that both A and B have full portfolios in basically all segments.

End of the story: BOTH C-Series (CS100/CS300 - CS500 is dead in the water unless it becomes an Airbus clean sheet replacement for the A320 in future) and E2 (with probably some sort of E2-200 coming through somehow to plug the gap between E and B) selling well on a polarized market. Virtual kill for the Sukhoi Project and very hard for China/Japan to crack.

Additionally, this may signal the end of BBD as a mainstream competitor since, if the C-Series fails, they will go together and, if the C-Series takes off, Airbus will take the whole project away from them.
 
Nean1
Posts: 444
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Re: Embraer pitches E195-E2 at JetBlue

Sat Mar 17, 2018 3:12 pm

Only now did I see the news, of March 13.

https://www.flightglobal.com/news/artic ... fo-446741/
 
User avatar
767333ER
Posts: 1174
Joined: Wed Jun 15, 2016 5:14 am

Re: Embraer pitches E195-E2 at JetBlue

Sat Mar 17, 2018 4:56 pm

Nean1 wrote:
Only now did I see the news, of March 13.

https://www.flightglobal.com/news/artic ... fo-446741/

Air Canada nearly the exact same thing before ordering the replacement for their E190 fleet. A smart customer isn't going to act desperate or act like their only choice is to buy, that way they'd get bad pricing.
Been on: 732 733 734 73G 738 752 763 A319 A320 A321 CRJ CR7 CRA/CR9 E145 E175 E190 F28 MD-82 MD-83 C172R C172S P2006T PA-28-180

2 ears for spatial hearing, 2 eyes for depth perception, 2 ears for balance... How did Boeing think 1 sensor was good enough?!
 
tphuang
Posts: 5695
Joined: Tue Mar 14, 2017 2:04 pm

Re: Embraer pitches E195-E2 at JetBlue

Sat Mar 17, 2018 8:46 pm

767333ER wrote:
Nean1 wrote:
Only now did I see the news, of March 13.

https://www.flightglobal.com/news/artic ... fo-446741/

Air Canada nearly the exact same thing before ordering the replacement for their E190 fleet. A smart customer isn't going to act desperate or act like their only choice is to buy, that way they'd get bad pricing.

I listened to the entire recording. It wasn't a big deal. Nothing new. They are going to pick between E2 and C Series. Looks like they are going to wait a while to make the decision (presumably to get the best deal), which makes sense to me.
 
Nean1
Posts: 444
Joined: Mon May 30, 2016 11:08 pm

Re: Embraer pitches E195-E2 at JetBlue

Sat Mar 17, 2018 10:12 pm

767333ER wrote:
Nean1 wrote:
Only now did I see the news, of March 13.

https://www.flightglobal.com/news/artic ... fo-446741/

Air Canada nearly the exact same thing before ordering the replacement for their E190 fleet. A smart customer isn't going to act desperate or act like their only choice is to buy, that way they'd get bad pricing.


767333ER,

It may just be a bargaining tactic. However, in the purchase of Air Canada there were important elements that do not apply to JetBlue analysis:

"...As part of the deal, the government of Quebec will drop a lawsuit it filed against Air Canada for not honouring a commitment to keep some heavy aircraft maintenance work in Montreal. The lawsuit alleged that Air Canada had breached the 1988 Air Canada Public Participation Act, which stipulates that the airline is required to perform maintenance in certain parts of Quebec. Air Canada has also agreed to perform heavy maintenance on its CSeries planes in Quebec for at least 20 years.

Furthermore, the government of Canada agreed to modify the Act, something that Air Canada had been clamouring for........But also presents a problem for Bombardier, since its competitors will label these government actions as protectionism. In other words, Boeing and Airbus will surely claim that Air Canada only bought these planes because of government interference..."

source: https://www.fool.ca/2016/02/22/bombardi ... e-cseries/

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