DBEA55AED16C0C92252A6554BC1553B2 Clicky DBEA55AED16C0C92252A6554BC1553B2 Clicky
March 2, 2024
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Embraer is justifiably proud of their E2 family. The program has gone through its evolution and flight test without a hitch. The resulting aircraft has met or exceeded the specifications.  It has all gone so well.  We read with interest that Embraer sees the E195-E2 as a good fit for LCCs and ULCCs.

Embraer is correct in its view on “right-sizing”, as it has become apparent that using larger Airbus or Boeing models often doesn’t generate the lower costs airlines seek.  Airlines either end up having to cut back flight frequency or deal with lots of empty seats.  The market wants frequency but, often, the market doesn’t generate enough traffic.  The argument that staying with one aircraft type to achieve economies of scale has limits as well.  Airlines often deal with these tradeoffs by “mis-using” their aircraft.  With the new generation of “crossover jets”, these tradeoffs are no longer necessary.

Airlines are assessing these crossover jets and seem to be in no rush to order.  There is a far greater rush towards upsizing from the current A320/737 to aircraft with closer to 200 seats.

The challenge Embraer faces with the E2 is remarkably similar to the challenge Airbus faces with the A330neo.  Both OEMs have a substantially improved aircraft on offer for a market that is operating the current version of the aircraft with an average fleet age of about ten years old.  This makes the replacement need less urgent.  The current E1 and A330 models do yeoman work across the globe.  Consequently, the replacement “need” isn’t there.  Will both these aircraft sell? Absolutely.  But the replacement wave could be five years away.

Which may be why we see Embraer talking about the LCC and ULCC markets.  These are fast-growing segments that have attracted several orders.  These orders have been for aircraft that are used, shall we say, unusually.  For example the MAX8 across the Atlantic. Primera using the A321neo/LR for new markets.  WOW taking an A321neo from Reykjavik to Los Angeles.  These operators take their aircraft to maximum seating and maximum range.  Embraer rightly sees these operators as targets for a 146-seat E195-E2 going 3,000NM.  Perhaps, viewing the likes of Spirit or Frontier in the USA?

Bottom Line
LCCs and ULCCs are the segments growing fastest. Embraer is rightly looking there for business.

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Co-Founder AirInsight. My previous life includes stints at Shell South Africa, CIC Research, and PA Consulting. Got bitten by the aviation bug and ended up an Avgeek. Then the data bug got me, making me a curious Avgeek seeking data-driven logic. Also, I appreciate conversations with smart people from whom I learn so much. Summary: I am very fortunate to work with and converse with great people.

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