Moderators: richierich, ua900, PanAm_DC10, hOMSaR
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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).
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.
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.
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.
StudiodeKadent wrote: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.And I think the E195-E2 has a slightly lower CASM than a CS100.
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: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.And I think the E195-E2 has a slightly lower CASM than a CS100.
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: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.And I think the E195-E2 has a slightly lower CASM than a CS100.
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
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.
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.
RalXWB wrote:This is Airbus order to lose. They can offer the best package deal - from the A (CS)-100 up to the A321...
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.
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.
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
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.
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.
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
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.
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.
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.
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.
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.
Nean1 wrote: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... ).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.
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.
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!
Nean1 wrote:
767333ER wrote:Nean1 wrote:
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 wrote:Nean1 wrote:
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.