Why Air Canada is kicking away their E190s with CS300s
Following the retirement of E-190 from Virgin Australia's fleet earlier this month, Air Canada has joined the queue, announcing that it will retire it's Embraer 190 fleet within the next 18 months.
The airline made the announcement as it prepares to take delivery of its new Bombardier CS300 aircraft, which is slated to be delivered late 2019. Air Canada currently has 25 E190s in their fleet. According to their original plan, 6 aircraft will be phased out by the end of 2018 while 5 further aircraft will retire by the end of 2019. However as the Canadian carrier obtains more Boeing 737 MAX 8 and Bombardier CS300, they will be accelerating the removal of their EMB-190s from the mainline fleet.
In order to maintain services, Air Canada will retain the A319-100 aircraft a little bit longer than initially planned at the bridge to the deliveries of the Bombardier CSeries scheduled to commence in late 2019. The Embraer 190s are operated as Air Canada’s mainline fleet and are only about 10 years old. When compared to the Airbus A919s which have an average age of 19.9 years, the maintenance cost with keeping Embraer in fleet seems to be lower. However, the Airbus A319 aircraft typically has a lower CASM (Cost Per Available Seat Mile) than the EMB-190. This means that the carrying capacity and potential for profits of A319s are higher than those of the EJets.
CASM is calculated by dividing the airline's total operating expenses by available seat miles. By comparing the CASM between the two aircraft, the Airbus plane has 34 percent more range. This means that thanks to the greater range and seating capacity, the A319 could target a wider range of profitable destinations. Through replacing the E-jets with A319s, and eventually the Bombardier CS300s, Air Canada can improve transfers at focus cities, hence increasing productivity and reducing downtime for airport crew members.
(even though the E190 has a higher CASM then A319, it's maintenance cost is lower than its competitor -source: Embraer)
Air Canada is not the only airline which is not happy with E190's high CASM. New York-based JetBlue Airways' chief executive has also expressed dissatisfaction over its fleet of Embraer 190s. However, this doesn't mean regional jets are not good for airlines like Air Canada and JetBlue. Through using smaller jets to connect secondary city pairs, the number of passengers required for a flight to meet the typical “breakeven” load of 75% to 80% was much lower on the E190 than the A320 family. This means that E190 made it easier for JetBlue to introduce service in new markets.
The retired E190s, hopefully, won’t be visiting the boneyard just yet, as the airline is hoping to place the newly-retired aircraft into the marketplace to be sold other airlines. Since 2015, 6 of the carrier's E190 aircraft have been in storage while the remaining 14 are scrapped as they cannot find new owners.
Air Canada is reported to have big plans for the new CS300 aircraft and believes that it will allow the carrier to greatly expand their network.
“This airplane is so good [that] we think it’s going to want to go on every route in North America,” said Benjamin Smith, President of Passenger Airlines for Air Canada. “The economics – it’s got CASM rates that are equivalent to much larger airplanes. So it may enable us, or give us the opportunity, to rethink our bank structures, how our network is designed.”
The airline currently has orders for 45 CS300s, almost double its current Embraer 190 fleet, and could possibly deploy the aircraft on medium range routes such as Vancouver to Boston, or to destinations in Europe or Hawaii.
It is worth noting that Air Canada has also placed orders for the new Boeing 737 MAX aircraft, which will replace the airline’s mainline narrow-body fleet. The new fleet additions will help the airline to have one of the world’s youngest, most fuel-efficient fleets.
(current fleet of Air Canada)
In addition to the Embraer jets, Air Canada plans to retire five Boeing 767-300s by 2019. The 767s should be gone by late 2019 from the mainline fleet.
Air Canada has enjoyed using its Embraer aircraft but has found that they are less profitable compared to the A319s that they own. Luckily Air Canada have hope for the Embraers as it wishes to sell them to other airlines which are willing to operate them.
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