Leeham News and Analysis
There's more to real news than a news release.
There's more to real news than a news release.
Leeham News and Analysis
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- Boeing defends 787, 777 against whistleblower charges April 17, 2024
- Dissecting Boeing CEO’s statement next new airplane will cost $50bn April 15, 2024
Embraer delivers 90 EJets, finishes 2018 with 368 backlog
Feb. 11, 2019, © Leeham News: Embraer delivered 90 EJets last year, comprised of 67 E175 E1s, 13 E190-E1s, five E195-E1s, one E170 and four 
E190-E2s.
It finished the year with a book:bill of 2.3:1 and a backlog of 368 airliners.
Good for Boeing I think. If we apply “Red” in LNA’s judgment, most 737-7s are “Red”.
With Southwest & Westjet not picking up the phone when the display shows “-7”, Boeing needs a plan B. And that probably will become plan “E”..
https://groups.google.com/group/aviation_innovation/attach/35d4515a510e6/Embraer%20E200-E2%20Boeing%20737-7%20Southwest%20Keesje.jpg?part=0.1&view=1&authuser=0
Next to that, the new company apparently needs to re do E-175 Scope Clause compatible successor. The E2 is too heavy..
Unless Southwest turn 180 and order A220 instead of B737-7 (which is unlikely), I don’t see a big problem for Boeing. Southwest is just gonna take -8 instead of -7.
the have 500 737-700 to be replaced. Many are not young at all. Some could be replaced by -8’s. But not all, if you can sell 100-130 seats on average on many routes and fly them with 3 ca’s, the 737-8 is expensive overkill. I guess they need at least 300 120-150 seaters to replace the 500 737-700’s. They love Boeing but their decisions and actions on the 737-7 are loud & clear.
Why wouldn’t WN go with the E195E2 if they introduce a new type? But I would bet 3 to 1 that the 797 is the new type after 737. They’ll go bigger, not smaller.
To be honest, I assumed Southwest might want to expand capacity on those routes.
If, as you say, that’s not the case, maybe Southwest is in the market for E195 E2 or A220.
I imagine the Airbus sales guy (or girl) that manages to sell a load of A220 to Southwest would get a small statue in Montreal or Toulouse.
This shows once again how strong the demand for scope clause-compliant regional aircraft is in the US market. Thanks to the delays at Mitsubishi – the MRJ70 is at least 3 years away – the E175 will remain a cash cow for a couple more years.
The entire E2 lineup is just an example of Embraer not listening to customers, though. The E175-E2 has a stretch that puts it out of scope. A smaller, composite wing on the unstretched E175 might have offset the extra weight from the new engines and kept it in scope.
The E190-E2 and E195-E2 aim to be mainline aircraft instead of regional jets, with higher MTOW and larger engines than needed for typical E1 missions. The E190-E2, in particular, has engines that were developed for the larger and higher thrust on the A220 and just add unnecessary weight. No airline needs a 100-seat aircraft that flies over 6 hours, yet the E190-E2 is exactly that. The E195-E2 is the attempt to at least create one aircraft with great economics by stretching it comically long and taking advantage of the large engines. It is still significantly heavier than the A220.
This also reflects in the airlines that have ordered the E2. The customers E190-E2 are all small airlines that only buy a handful each, which are unlikely to order additional aircraft in significant numbers. The majority of them are through leasing companies, which seem to have problems placing the aircraft. I would not be surprised if some of 47 current orders are cancelled. Exact same situation for the E195-E2, except that Brazilian Azul has decided to buy locally and make it the backbone of their rapidly growing fleet. That makes one major airline customer total.
The problems Embraer is facing become evident when comparing the E2 to the A220: with Delta, Lufthansa group, Korean Air, Air Canada, Jet Blue, Moxy and Air Baltic, the A220’s backlog is built on major carriers and most of them are expected to come back for more.
To summarise:
E175-E2: dead on arrival, unless reworked or scope clause changes
E190-E2: dead on arrival
E195-E2: only built for Azul
I believe that your analysis is a little bit inaccurate. If the 175E2 had the same number of seats of the current 175, the improvement on CASM would be less than two digits, not justifying a new program. The 190E2 is significantly lighter than A220-100 and has better economics, but lack shortifield perfomance. Maintenance costs are also lesser in 190E2. The 195E2 fits in the middle of A220-100 and A220-300. It’s economics also fits in the middle point. It is a right size option. Also, crew training costs due to common type rating makes the E2 a good replacement option for current Embraer customers. The issue is that the E1 fleet is relatively new.
Where are you getting the “better economics” of the E190-E2 from? The E190-E2 is a smaller aircraft than the A220-100. And while the A220-100 is only 6.7% heavier (OEW 77,650 lb vs 72,752 lb), it seats more than 15% additional passengers in comparable seating configuration (125 vs 108 @30 in). Its hard to imagine that aerodynamics can make up this disadvantage.
I agree that the reason behind the E175-E2 stretch was to get better CASM or allow for more premium seating within the 76 seat limit. But it isn’t looking like the scope clause will change any time soon and the 31 m wingspan of the E175-E2 makes it unfit for 30 m regional gates that many airports in the US have. An aircraft that your primary customers cannot use is a dead aircraft. On the other hand, the E175 won’t be a success forever. When there is nothing new in the market, replacement cycles become long. With the A220, there is now an excellent small mainline plane that could take over some regional routes. The E175 needs upgrades if Embraer wants to continue selling it 5 years down the road.
The issue is that there isn’t much where to upgrade the current 175. Any new engine option will put it above scope and there will not be a significant change in CASM without increasing the seating count. The avionics is already upgraded with the same FMS and features as E2, but without the landscape displays. The E2 FBW could be used to reduce some structural weight, but would gain at most 3% of fuel consumption. Maintenance costs could be reduced a little bit as well. I believe that the E2 will only gain traction after Boeing steps in revising the supplier contracts allowing more price reduction. The problem currently is that Embraer cannot match Airbus aggressive pricing on A220. Boeing could help on lobbying for scope clause revision as well.
P&W GTF NEO?
Westjet is rethinking their -7s to the point its a given they will move up to the -8/9 or -10.
Boeing goose is cooked in the space as the A220 manages that replacement nicely.
Not sure what they can do about the E2, maybe Jenny Craig E2 lite?
As long as the scope exists it mucks up the space.
Embraer, like the Dude, will “abide”. And, surely, BA, with a serious marketing push (as instructed/encouraged/aided by “Mulee”), can get some 20 to 30 37 Max7 orders booked.
But for how long? Their market is not good right now, selling some out in the rest of the world but only scope type in US.
Airlines also look at long term economics and price and the -7 is just too heavy.
If you upscale you have a far more flexible aircraft even if some routes are flown at a loss.
The -7 is significantly heavier now than before. SW is moving to the -8 or -9.