AIRCRAFTAIRLINEINSIGHTS

Implications From Purchase Of CSeries For Air Canada

Bombardier CSeries

Air Canada announced it is purchasing Bombardier’s new C-Series aircrafts with delivery planned in late 2019 to 2022.

Air Canada

“We are delighted to announce this important agreement with Bombardier for the purchase of CS300 aircraft as part of the ongoing modernization of Air Canada’s narrowbody fleet,” said Calin Rovinescu, President and CEO of Air Canada. “With its high fuel efficiency performance and greater seating capacity, the next generation technology of the C Series is very well suited for our current and future network strategy and will be an extremely efficient addition to our fleet. The renewal of our North American narrowbody fleet with more capable and efficient aircraft is a key element of our ongoing cost transformation program – plus the enhanced passenger cabin comfort provided by the CS300 will help us to retain Air Canada’s competitive position as the only Four-Star international network carrier in North America.

“The entry of the C Series into our fleet is expected to yield significant cost savings. We have estimated that the projected fuel burn and maintenance cost savings (on a per seat basis) of greater than 15 per cent should generate an estimated CASM reduction of approximately 10 per cent, when compared to the aircraft it will replace.

Bombardier CSeries
CSeries
Source: Bombardier

“Air Canada has a long history of collaboration with Bombardier. Air Canada Express regional partners operate one of  the largest fleets of Bombardier aircraft in the world with a mix of  over 135 regional jets and turboprop aircraft by December 31, 2016.

“We were one of the launch customers for the Canadair Regional Jet and today’s announcement reflects our continued support for Canada’s aerospace industry and for the new technologies the industry may develop. We fully expect the new technology of the C Series to efficiently meet the demanding needs of our current and future network strategy,” concluded Mr. Rovinescu.

Analysis

Fleet Management

Air Canada has 45 Embraer E190s in its fleet currently. They are configured into two cabins (business and economy) and has a capacity of 97 seats in total. They are used mostly for short haul regional flights within North America.

Air Canada Embraer 190
Air Canada Embraer E190
Source: By Makaristos (Own work) [Public domain], via Wikimedia Commons
The new CSeries to replace 25 of these aircrafts that have been in service more than 10 years ago. The remaining twenty will be retired and purchased by Boeing as part of the airlines’ deal to purchase 61 737 MAX -8/-9 back in 2013 with delivery in 2017.

Air Canada initially opt-outed of the CSeries back in 2014. At that time, the airline decided to continue operating the E190s for a longer period of time without a replacement. In the two years since the feedback, better economics and favorable pricing likely won the the airline over. Industry sources said that upwards to a 60% discount was given from the list price of US$72.4 million.

Range and Capacity

The model being chosen is the CS300 which will have a maximum range of 6,112 km (3,798 mile; 3,300 nautical mile). This is upwards to 83% improvement over the E190. Additional range provides Air Canada with the flexibility to fly to most North American destinations with ease.

Two class capacity improves 34% from 97 to 130 over the E190. The total seat count would slot this model between the Airbus A319 (120 seats) and A320 (146 seats). With the extra capacity, Air Canada would be able to supply more seats on routes where additional frequency cannot be procured due to slot restrictions at certain airports (e.g. New York LaGuardia Airport(LGA)).

Passenger Experience

The CS300 has been designed with passenger comfort in mind. Typical two class configuration will yield the following dimensions:

  • Business (36″ (91 cm) pitch, 20″ (51 cm) width)
  • Economy (32″ (81 cm) pitch, 18.5-19″ (47-48 cm) width)

These figures are the same if not better than the E190 and even some of the Airbus A320 Family aircrafts.

Additionally, windows would be bigger than any other regional aircrafts of its kind at 11 x 16″ (28 x 41 cm).

Window Design on Bombardier CSeries
Window Design on Inside CSeries
Source: Bombardier Inc.

Overhead bins have been designed to fit 3 large size carry ons (length wise).

Overhead Bins Inside CSeries
Overhead Bins Inside CSeries
Source: Bombardier Inc.

Porter Airlines

Porter Airlines operates out of the Billy Bishop Toronto City Airport (YTZ) and has an order for up to 30 CSeries 100 aircrafts. The regional airline has been using the order as a leverage to negotiate a deal to expand its hub located in downtown Toronto. Not only has the negotiation been stalled (News – December 14, 2015), the airline is also losing the Canadian order leverage. As such, it might cancel its jet order with Bombardier or replace it with the new extended version of the Q400 that can seat up to 90 passengers.

Embrarer

The Brazilian aircraft manufacturing company likely was not able to provide a better deal than Bombardier on the replacement of the E190 with a newer model. When the last E190 is retired by 2022, the company will not have any aircrafts being operated in Canada.

Bombardier

The Quebec based aircraft manufacturer is given an extended lifeline with this order.  The provincial government injected CDN$1.3 Billion (US$1 Billion) in funding for the troubled company in 2015. This move is to save 40,000 direct and indirect jobs in the province and save the CSeries Program. The federal government will decide whether to make a similar support pledge by middle of March 2016.

Timelines

Bombardier completed flight certification testing of the smaller CSeries CS100 back in November 2015.  Certification of this type was received from Transport Canada in December 2015. Bombardier has completed route proofing for North America and is completing the same for Europe. SWISS Global Air Lines will be the first customer to receive its first of thirty CS100 aircrafts for operation in Q2 2016.

SWISS Bombardier CSeries
Bombardier CSeries in SWISS livery

 

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