During its earnings call this week, Alaska’s CFO spoke of interest in 30 regional jets with 76 seats. These are to be deployed by Horizon Air as it returns 15 Bombardier Q400s on lease. Horizon has long been a Bombardier customer. Indeed, even as the airline returns some Q400s, its fleet of the aircraft are expected to grow. Horizon is a key Bombardier customer.
But the comment from the CFO about 76 seats sends a message. This picture is the message.
The Embraer E-175 has been a hit with its US-based customers. Airlines appreciate its efficiency. But passengers love the cabin – big windows and a layout that feels much larger than the typical regional jet.
Nobody is saying the deal with definitely with Embraer. But deploying the E-175 will ensure commonality with the SkyWest fleet (pictured) and the mainline. Alaska is clearly planning to grow its route network – as it must with Delta eating away at the Pacific Northwest traffic. Replacing Q400s means looking beyond typical turboprop ranges. A regional jet decision speaks to growth.
Embraer doesn’t have the deal yet. Bombardier’s CRJ900 is the only other option. Not naming an OEM leader will ensure tight pricing. Both OEMs will fight hard for this deal. Embraer is not the obvious winner. But it looks like a very steep hill for Bombardier.
Good for Horizon Air, Alaska Airlines, their passengers, and the winning OEM. An efficient and comfortable regional jet perfectly suited for expansion plans and competition with Delta out of Seattle. Good reporting…
Alaska should think a little bigger and look at the CS-100
I’d love to see that, but I think Alaska is one of the least likely airlines to get the CSeries. They’re one of the airlines highly geared towards commonality, and the CSeries would be an extra type awkwardly placed in the middle of their 737’s and their regionals.
This is tough one for Bombardier. The Q400 is also in a vulnerable position, especially with this prolonged fuel price drop. Alaska letting leases expire, or possibly even starting to sell off their own Q400’s, could further hurt sales. 15 used Q400’s hitting the market is a significant number in the current environment.
I’m under the impression the CRJ-700 has a slight operating and modest purchase price advantage over the E175, so perhaps Bombardier has a decent opportunity. However, Alaska also seems to focus heavily on attracting business travel, and the E175’s larger cabin will have a lot of appeal there. For my part, the first time I flew on a CRJ-700, I was baffled by how absurdly overblown the complaints about its cabin are, but the ERJ customer experience advantage probably not only comes from the extra seat width and head height, but also the larger windows, and the casual perception that jets with tail-mounted engines are small.