https://crankyflier.com/2020/02/07/davi ... the-aisle/
From CrankyFlier, this interview with DN is quite fascianting. On the operating side of things, he is says E195 has trip cost 15 to 20% lower than A320. That seems to match what JetBlue has told the investors, which is E90 has trip cost approximately 20% lower than A320 (i guess E95 would be slightly higher)
The part that is quit eye-dropping is what he said about A220.
David: Yeah, but that’s different. [The 220] has 7-hour range. We can fly Salt Lake to Maui or Denver to Kahului. That’s a whole different bird. It’s not a “cheap” thing in that case. What you can do [with] premium, you can’t really put economically on the 195s. But we could pull out a bunch of coach seats [overnight] and put first class seats in the 220s. So that plane will be flying long-haul and we’ll be flying thin markets where…
I’ve done this before. We’ve got [A]330s flying on Azul to the US. And an eight-hour flight on that airplane costs, call it, $100,000 for a flight. And if you can put an [A321]LR on it — a little range-challenged so you need an [A321]XLR — but if you have an XLR you’d probably be $50,000 to $60,000. And then [the A220] is under $30,000. So it’s just a whole different thing where you can actually fly city pairs that nobody has been able to fly before…. Usually range is equated with widebodies.
Cranky: You mentioned a western US to Hawaii market, but what other types of markets are are you interested in?
David: Transcon, secondary transcon, Northeast [US] to Europe, Florida to South America… particularly in Brazil and Azul’s network to some of the capitals they don’t fly and makes no sense to fly with a widebody. So, just all kinds of stuff that works, and we’re even talking about putting on some auxiliary fuel tanks a couple years later. It would give us another 500 miles on top of that; it would take us over four thousand miles. That would take us almost anywhere in Brazil from Florida, for example.
I'm not sure if that's the base version or the speculated A220XLR. But SLC/DEN-OGG is already longer than the current narrowbody technology with MAX/NEO allows. The route flexibility with additional fuel tanks is pretty impressive. Basically many of the markets by A321XLR could be operated much more cheaply than A220XLR.
His total trip cost seems to good to be true. He is basically saying A321LR has a little over half of the total operating cost of A330. That I can believe. It's been mentioned many places. But he is also saying that A220's total operating cost is 50 to 60% of A321LR. Even if we assume the high end of that, it's significantly lower than what I had been estimating (about 71%). That seems too good to be true. There is no reason for anyone to operating A321XLR for long thin routes if A220XLR economics is that good.
This next point is also illustrating
David: The 195 works good at about 2 hours. Once you start getting to 3 hours, the fuel consumption per seat is… I mean the E2 has the same engines as the 220 and it’s burning 20% less fuel than the 195s are. So you can imagine if we have 145 seats on a 220 — that’s the coach configuration — and it’s burning less fuel than the 195s and you fly the thing on three-hour, four-hour, five-hour stage lengths… there are a lot of three, four-hour transcons in the US as well.
I don’t think we’ll have any routes for the 195 that are over 2 hours, maybe 2 hours 15 minutes. The fuel doesn’t make sense. It burns 600 gallons an hour and the 220 will burn maybe you know, 560, or something. But the [acquisition] cost of the 220s is a lot more, obviously. So you have to fly it more but if you’re flying it losing money on certain days of the week, then that doesn’t work either, so [the 195 and 220] work good together.
JetBlue has said the same thing. Basically, E90 trip cost really goes up when it the flight time increases. To the point where a trip from BOS-AUS might have same operating cost as a A320. Not surprising that E95 would have the same issues. Also not surprising that A220 would burn 20% less fuel than E95 since JetBlue have said total operating cost of A220 is about same as E90 (I calculated it to be even lower).
Other point about the older Embraer aircraft
The lower trip cost airplanes you can get, exponentially more markets you can fly especially if your seat mile cost is down. It’s not like a 74-seat airplane that’s a scope airplane like the 175. It’s a fine airplane, but it’s not optimally sized for [unit cost] CASM because their pilots make the same, their maintenance is the same. Their capital cost isn’t more, burns a little less fuel because it’s lighter but they have basically 50 less seats than we do. That allows us to charge lower fares and stimulate the market.
Exactly, if E90/95 cost no money to keep around. There is no reason to get rid of them when legacies are still buying new E75 for probably higher cost (since E90/95 costs practically nothing to acquire).
David: No, no it’s not. You know, if you’d have said to me, when we started Azul that we’d buy a bunch of 195s, and then you said, “10 years from now you’re gonna be flying five aircraft types,” I’d have said you’re crazy. But there’s a market there; we exploited it. So we went and got ATRs and then we went and got 330s and started flying international. And we saw the [A320]neos coming on. We needed those so we bought a bunch of 320neos and 321neos.
I think there’s actually a play with these airplanes, with 195s, also…. We’re talking to some real estate people too in areas that have almost no air service [about] bringing in air service and either them subsidizing it or us making money off the real estate. Because every time we fly into a market where there’s no air service, real estate values go up, so how’s that for distractions?
This part is also interesting. Sure it makes sense to start with a single fleet type. But there is no reason not to have additional fleet types if the market justify it. No need to religiously stick with one fleet type like WN.