A220 vs. E2 – Economics alone don’t win deals

The competition between these two families is intense. The recent LOT choice of the A220 over the E2 was odd since the airline already has some E2s in service, and was the launch customer for the first EJet. It was not a decision made purely on airplane economics. Shortly after this, SAS selected the E2, and the announcement touted the E2's economics, which drove the choice. What does the data show? The best source, in our view, is Skailark's data. Here's what we find. [caption id="attachment_91992" align="aligncenter" width="676"] Skailark; AirInsight[/caption] As you can see, the numbers are very close. If we show the data on a chart, we get this. [caption id="attachment_91993" align="aligncenter" width="640"] Skailark; AirInsight[/caption] Not only are the numbers close, but they are also improving as the aircraft mature and operators optimize their fleets. The E2 models show the most significant improvement over the period. The A220-300 has a 2.3% advantage over the E195-E2. That is not an insignificant number. Is there any difference in how these aircraft are being deployed? The ball size is based on ASMs. The A220 family has been in service for longer and therefore handles more traffic. [caption id="attachment_91996" align="aligncenter" width="640"] Skailark; AirInsight[/caption] The E190-E2 (ERJ 190-300) is used for regional services, and compared to the A220-100, it flies over 16% shorter stages. The E195-E2 (ERJ 190-400) and A220-300 serve similar markets, with only a 4% difference in average stages. The larger airplanes are closely matched in terms of deployments. The A220-300 has a range advantage over the E195-E2. However, operators are pushing either model close to its maximum range, which exceeds 3,000 miles. As you would expect, operators show a wide variance in fuel efficiencies based on stage lengths. [caption id="attachment_91997" align="aligncenter" width="640"] Skailark; AirInsight[/caption] The further the airplane is pushed, the better the fuel burn. ASMs again drive the ball size. Delta is the benchmark for the A220-100. At the extremes, you can see why certain operators have started to discard models. Korean Air and EgyptAir are examples. This isn't just about the GTF, either. Both families use this engine. Air France needs to optimize the A220-300's range to achieve optimal fuel efficiency. This would position the A220 in a similar range to Delta, JetBlue, and Air Canada. The largest E195-E2 customer is Porter, and it is achieving excellent fuel burn. However, because Porter's impact on the family average is not significant enough, we see the E2 numbers higher than they might be. Because KLM, for example, does not stretch its fleet's legs enough, its fuel burn is less than optimal. Summary The E2 can deliver best-in-class fuel burn numbers if it is deployed correctly. The A220 benefits from a larger operator base and is delivering excellent fuel burn. Choosing between the two OEMs ultimately depends on the deal the airline can negotiate with the lessor or the OEM. The performance is close enough to make it a draw. How the operator deploys the aircraft is also crucial. To demonstrate how fuel-efficient the A220 and E2 are, here we see them competing against the MAX 8 and A320neo. These new models are doing exceptionally well against their bigger competitors. While all models show improving fuel efficiency, the smaller models are doing better than anyone might have expected. [caption id="attachment_91999" align="aligncenter" width="640"] Skailark; AirInsight[/caption]

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