Lufthansa keeps door open to Embraer for future orders

Despite losing out to Airbus this week on the order for Lufthansa City Airlines, opportunities remain for Embraer to win an order from the German airline group in the future. Lufthansa says it is looking forward to continuing its relationship with the Brazilian airframer, a spokesperson tells AirInsight. Indeed, all might not be lost when it comes to new aircraft orders… Lufthansa said on Tuesday that it had selected the Airbus A220-300 for its new subsidiary City Airlines. The airline has ordered 40 A220s, with 20 purchase rights, with deliveries starting in 2026. The A220s will replace the A319ceo, with which City Airlines will launch services in the summer of 2024. Embraer has also been in the game to win the order. This spring, the airframer pitched a detailed proposal to Lufthansa for 170 E195-E2s and 40 E190-E2s but was left empty-handed this week. The Lufthansa spokesperson says: “We received very strong propositions from both Airbus on the A220 and Embraer on the E2. At this point, we decided to select the A220 for City Airlines. Nonetheless, Lufthansa Group looks forward to continuing the relationship with Embraer.” CityLine opportunity The reason the door on Embraer might not be shut is likely called Lufthansa CityLine. This is the regional subsidiary of Lufthansa, which initially was thought to form the basis of the new feeder airline for Lufthansa before plans progressed towards a separate carrier, City Airlines. When Embraer pitched the E2 family in March, it seems to have looked not just at the new subsidiary but also at opportunities for fleet renewal at CityLine and the regional network of Lufthansa, Austrian Airlines, and Air Dolomiti. CityLine currently operates 12 Airbus A319ceo’s, 5 A320neo’s, 4 A321ceo’s, 28 Mitsubishi CRJ-900s, and 6 Embraer E190s. Air Dolomiti has a fleet of 17 E195s with 122 seats and three E190s with 100 seats, while Austrian operates 17 E195s with 120 seats. The CRJ-900s have only 84 seats. The Embraers are between 13 and 14 years old, and the Mitsubishi/Bombardiers are over 14 years old. This is the fleet that Embraer must be keen to replace with E2s, although the number of 210 that it pitched in March seems unrealistic, now that City Airlines has confirmed its choice for the A220-300 with 148 seats. An order for 100 seems more realistic if Lufthansa Group wants to replace the current fleet at CityLine, Air Dolomiti, and Austrian. Austrian Airlines is operating 17 Embraer E195s some 12.5 years old. (Austrian Airlines - Dietmar Schreiber) Embraer’s best option seems to pitch the E190-E2 with 100 seats against the Airbus A220-100, which Lufthansa subsidiary SWISS operates in a 125-seat configuration. The E195-E2 with between 130 and 146 seats seems too big for CityLine, Air Dolomiti, and Austrian, unless the airlines wish to upgauge. SWISS knows the E2 all too well, having wet-leased the 110-seat E190-E2 and 134-seat E195-E2 from Helvetic Airways for a few years now. As with the order for City Airlines, expect Airbus to come up with a strong proposition for a potential future order. Offering the A220-100 would bring various synergies and cost benefits to Lufthansa Group, although there are similar ones when transitioning from the E1 to the E2. Embraer likes to point out that the E2 is eight tonnes lighter than the A220 and that the A220-100 has one percent higher trip costs and 10 percent higher costs per seat than the E195-E2. For the A220-300, trip costs are 9 percent higher but seat costs are one percent lower, Embraer explained again during its recent Media Day. At the November event, Embraer President and CEO of Commercial Aviation, Arjan Meijer, said that he expected many sales campaigns to come to fruition, but the jury is still out if Embraer can convince Lufthansa Group that the E2 is the perfect fit. “Yes, we need some bigger names on the program and we are working hard on that, but we are expanding the operator base, which is a good sign that airlines are appreciating the E2 versus the bigger narrowbodies,” Meijer said. Over the years, Lufthansa has operated 220 Boeing 737s of various versions. This includes 42 737-500s, with this aircraft flying with the airline between February 1991 and November 2014. (Lufthansa) MAX availability Lufthansa also confirms that the earlier availability of the Boeing MAX 8 is one of the reasons why it has selected the type. “Sure, the availability was one favorable factor, but not the decisive one. Lufthansa has a long tradition to rely on several aircraft manufacturers, also to get a competitive commercial offer,” a spokesperson says. Lufthansa Group has placed a firm order for 40 MAX 8s plus 60 purchase rights, with deliveries starting in 2027. Although it has also secured purchase rights on another 40 Airbus A320neo family aircraft, these will not be available until the next decade. Airbus Executive Vice President Europe Region & Sales, Wouter van Wersch, didn’t seem too disturbed when asked on Tuesday at the Transavia A321neo delivery event if he was disappointed that Lufthansa had ordered the MAX: “They still have many A320neo family aircraft on order and signed a new one today. But the fact is simple: we are sold out on the A320neo family until 2030. Boeing can deliver the MAX earlier, so that might have made them decide to order the MAX.” It marks the first 737 order from Lufthansa since 1995 when the airline ordered the -300. Which airline(s) will operate the MAX 8s will be decided by Lufthansa Group at a later stage. The airline said on Tuesday that the fleet plans of Lufthansa, City Airlines, and SWISS are already “underpinned”, the Boeings will join either Austrian Airlines, Eurowings, Discover, or Brussels Airlines. Except for Discover, all three other airlines have recently taken delivery of A320neo family aircraft.

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