Air Canada inaugurates A220-300 service today

Jan. 16, 2020, © Leeham News: Air Canada inaugurates Airbus A220-300 service today, becoming the second North American carrier to operate the A220. Delta Air Lines was the first, with the A220-100 last year.

Air Canada A220-300. Photo by Scott Hamilton.

It is the first North American airline to operate the -300 model. The new service begins on the Montreal-Calgary route.

Airline and Airbus officials paid homage to Bombardier at a celebration yesterday in an Air Canada hanger down the block from Bombardier’s world headquarters on the edges of Montreal Dorval Airport.

Bombardier designed the aircraft, originally called C Series, in a bet-the-company challenge to Airbus and Boeing.

Betting the company

Smaller by several factors of magnitude and over-committed by launching two corporate jet programs at the same time, Bombardier lost the bet. It nearly went bankrupt, requiring a government bailout. This wasn’t enough: it sold 50.01% of the program to Airbus for $1. Bombardier retains about a third and a pension fund the rest.

Airbus A220-300, designed by Bombardier as the C Series. Air Canada inaugurates service Jan. 16 between Montreal and Calgary.

Bombardier placed a second bet that this share will reap financial rewards because of the greater marketing power Airbus has.

So far, this bet seems to be working. Airbus now has more than 600 orders, vs 300 won by Bombardier.

Christian Scherer, chief commercial officer for Airbus, said the A220 “sells itself.” This may be a bit of sales hype, but for the moment, Scherer doesn’t have delivery slots for the A320 family until well into this decade.

The A220 is his prime offering. Airbus, which took over Bombardier’s Montreal Mirabel production factory, already is expanding facilities. Airbus is pressing to bring production up to 10/mo by 2023-24. Airbus is also building an A220 final assembly lines, paid for by Bombardier, in Mobile (AL). This will have an initial capacity of 4/mo. This new factory opens in June, albeit at an initial low rate production.

A220 economics better than A320neo, 737-8

Scherer said the A220-300 economics are better than the slightly larger A320neo and Boeing 737-8. The A220-300 is directly competitive with the Airbus A319neo and the Boeing 737-7.

Air Canada configures the -300 with 137 passengers in business and coach classes. The typical two-class configuration for the A320neo is about 156 seats. The 737-8’s typical configuration is about 172 seats.

Still, Scherer said the seat mile costs of the -300 are up to 5% better than these two airplanes. The trip costs are 7%-10% better, he said on the sidelines of the event.

An Air Canada said the coach seats, in 2×3 layout, are all 19 inches wide. When Bombardier designed the airplane, the seat widths were 18.5-19-18.5 inches. Air Canada retained the original aisle width but narrowed the armrests slightly to gain the window/aisle seat width.

The 19-inch seats make this the widest passenger seating in a narrow body aircraft and wider than most coach seats in twin-aisle aircraft.

New, thin routes

Air Canada will use the A220 to open new, thin non-stop routes that can’t support the larger A320 or 737. One of the first, which opens in May, will be between Seattle and Montreal. This has been outside the range of the Embraer E190 it replaces. The A220 has a 3,200nm range. The smaller capacity will, in theory, turn a loss-making route on the A320 or 737 into a profitable one on the more economical aircraft.

Air Canada’s Toronto and Montreal hubs are highly seasonal (as it the Seattle market). The smaller, more economical A220 should help turn more consistent profits on seasonal routes as well.

 

52 Comments on “Air Canada inaugurates A220-300 service today

  1. If the -300 already has a seat mile cost up to 5% better than A320 and 737-8, then Airbus simply cannot get production ramped up quick enough.

    A -500 will destroy both A320 and 737-8 in seat-mile costs – meaning it sells in big numbers and they need the production slots for it.

    [It also reinforces my opinion from 2009 that Bombardier completely screwed up by not doing CS300 first, CS500 second and CS100 third.]

    • I suspect it may have been a strategic position the board took to avoid trade and tariff issues.

    • I thought BBD was crazy when the proposed it (and they were).

      The came out with one of the finest aircraft ever. I got to see one fly through Anchorage.

      You tend to think of it as a smaller/regional and it looks small in the pictures

      In person is a full up LCA Single Aisle and its beautiful.

      And all reports its equally good on the systems, controls setup and engines.

      While they could not pull off MFG, they hold second to none in an incredibly well done design that makes Boeing and Airbus look like pikers.

  2. I am not sure how the cost seat mile equation works when the aircraft is sold at well below manufacturing cost and according to a note published by Scott last fall, Bombardier is fully exposed to cover all losses up 500MM, I think for the next two years. FAL cost is a very small part of the manufacturing equation so ramping up may not help the business case, unless Airbus is succeeding is squeezing cost out key vendors such as Bombardier, Pratt, LIEBHERR and COLLINS to name only the big guys

    • Early examples of an aircraft often cost much more to build than later ones. This is due to a combination of immature processes and expensive supplier contracts due to the initial small orders. In the case of the C-Series this effect was made worse by Bombardiers lack of leverage over suppliers. Combine initial high build costs with the need to incentivize early buyers to take a chance on a new aircraft and you get a situation where the aircraft may initially be sold at a loss. Long term cost to build is usually not known until after aircraft 200 or so.

    • I will take several years before cost come down and volume up. so Airbus will lose money one each shipment before a major block change and new contracts/suppliers are on line. Most likley Airbus will work that out and reach 2-3 shipments/working day instead of this being the monthly production.

      • Looks like Airbus will do it in steps, 2024 10ea/month. Corresponds to 1ea/working day. Guess it will take aother 5-7 years before they are ready for the major block change with major cost reduction.

  3. How on God’s earth did Boeing manage to let this opportunity slip through their fingers?
    A perfect ( instant) replacement for a theoretical B737 6-7 and 8.Leaving a natural gap for a new MOM aircraft above it.All right ‘next door’.
    Instead Airbus gets a replacement for the 318-319 and in time a regional 320.
    With the ‘plus’ stretch to the A320 and 321 they get 200-250 seat NB market covered too ( not forgetting the translantic 200 seat XLR).
    I look forward to flying this aircaft with its 19″ seats -what a pleasure.

    • From a famous football (US not World) the phrase you re looking for is: Cowboys vs the Dolphins if memory is right.

      Snatching Defeat From The Jaws of Victory.

      Now any team can loose with poor talent.

      It takes a really good team to loose a slam dunk win.

      All you can say is Boeing management is so talented (just ask them) they can loose anything.

      Also knows as why we play the game, talking about it proves nothing.

      Or, just maybe, Boeing is so screwed up they are just incompetent? Nah……………………

  4. I love the CSeries/A-220, I think she is a fabulous airplane
    Highly versatile, low fuel burn, long range, and comfortable for passengers and crews.
    I think Bombardier designed a great aircraft.

    • They certainly did so by all accounts. And Airbus picked it up at a great moment. Seemingly it came about because an Airbus exec (I can’t remember who) took a look round one at a show and pretty much made up their mind there and then.

      One thing I’m interested in is how does this fit in with the rest of Airbus’s product line up vis a vis pilot type ratings. Airbus have done very well over the past decades to have very similar cockpits, procedures, etc. across the entire range. The C series has a different (and apparently pretty good) cockpit (still FBW, all modern ideas). So, will Airbus adopt it across the rest of their range in time, or will alter the C series to have the Airbus cockpit, or leave the divide as is?

      Either way I suspect they’ve got plenty of time before they have to do anything.

      • Not like that at all. Bombardier knew they were in dire straights and approached both Boeing and Airbus- who both rejected the deal on offer. Then Bombardier approached the major Chinese aviation group. At that point the Canadian federal government stepped in over the potential loss if IP and manufacturing and a ‘better’ deal with Airbus was then done.
        This was revealed by a Canadian newspaper , I linked to the story previously when this came up , but cant find it now- it was a major paper in either Toronto or Montreal.

        Looks like the arrangement is under new strain
        https://www.bloomberg.com/news/articles/2020-01-16/bombardier-back-to-brink-after-rethinking-airbus-a220-jet-deal
        Although this latest ‘news’ seems to be just based on scuttlebutt around various brokers in Toronto- not always a reliable source as they could benefit by shorting the shares.

        • Well that as may be, but I do remember an Airbus bod stating that the plane had more or less sold itself to him.

          That article certainly doesn’t paint a rosey picture for Bombardier. Airbus and the aircraft itself will probably be OK, but I hope that some good from it ends up going back to the company that decided to actually develop and build it in the first place.

        • More disturbing than a potential sale of Bombardier to Chinese interests is the 95.5% sale of Kuka (whose Robots are used in this video) to Chinese interests. The German Government did not block the sale of the best Robot Company in the world. Western “Open Society” Laissez-faire neo liberalism has reached insane levels of suicide and cuckoldry. No respect.

          • Still cannot believe how western goverments can tolerate that western companies cannot buy More than 49% of a chinese one yey they accept that a chinese company (goverment) can can buy 100% of a western one. Like the saying goee ,the capitalist will sell you the rope to hang him. And that is exacly what is happing.if it keep up before long we will all be working for the chinese goverments. Why they don’t bock the chinese from buying more then 49% like they do ?

  5. LNA: “… a celebration yesterday in an Air Canada hangar down the block from Bombardier’s world headquarters on the edges of Montreal Dorval Airport.”

    What you are referring to here is the Bombardier Business Aircraft headquarters (and possibly what’s left of Bombardier Aerospace as well). The Bombardier world headquarters is in downtown Montréal.

    LNA: “Smaller by several factors of magnitude and over-committed by launching two corporate jet programs at the same time.”

    It would be more appropriate to say smaller by an order of magnitude. An order of magnitude meaning ten times; and Bombardier being a 20G company at the time was indeed ten times smaller than Boeing.

    These two corporate jets were the Lear 85 and Global 7000. Bombardier sank 3 billion dollars in the Lear 85 programme which was ultimately abandoned. But the Global 7000 is what hopefully will keep Bombardier in the aerospace business for a long time to come.

    LNA: “Bombardier retains about a third and a pension fund the rest.”

    The pension fund you are talking about is CDPQ and it now owns about one third of Bombardier Transport. However, CDPQ has nothing to do with the C Series partnership. It is the Government of Québec that invested in this partnership and owns a diminishing percentage of the holding because it did not add more money into this venture as Bombardier and Airbus did afterwards.

    LNA: “Airbus, which took over Bombardier’s Montreal Mirabel production factory, already is expanding facilities.”

    They have already erected two temporary shelters for pre-flight operations plus a delivery hangar. And when the CRJ production will be terminated towards the end of the year, they will take over the CRJ FAL and turn the facility into a pre-assembly hall for the A220, using the Airbus aircraft production method to replace the Boeing method used by Bombardier.

    Gary Scott, the former Boeing 737/757 General Manager, was in charge of the C Series programme at the time and this explains why Bombardier assembled the C Series more or less like a 737.

    This “new” facility will supply both Mirabel and Mobile with fully stuffed and ready to assemble fuselage sections.

    • As mentioned, its Investissement Quebec ( not CDPQ the public pension fund manager) owns 19% , Bombardier is 29% of the partnership.
      The remaining children of Armand Bombardier and their family control about 50% of Bombardier ‘voting shares’, except the oldest son Germain who was only President for 2 yrs after his father death before selling his shares and leaving the family business.

    • “”they will take over the CRJ FAL and turn the facility into a pre-assembly hall for the A220, using the Airbus aircraft production method to replace the Boeing method used by Bombardier.””

      Was the A220 designed for robot assembly usage?

  6. Everything could be a moot point going forward with Bombardier having more financial problems today. I guess they are re-thinking their agreement with Airbus, or so it seems… If Airbus was really committed to the A220 program, they would have bought it outright and made the -500. They have it on the back burner, and their agreement with Bombardier really favors Airbus when it comes to costs. As far as Boeing taking a serious look at Bombardier five years ago, they didn’t. Boeing’s strategy was to under price their 50 year old planes to put financial pressure on Bombardier.

    • I doubt they are seriously rethinking the agreement. They were responsible for up to 350million in the first year post closing and 350 aggregate over the next two. Above those limits costs are shared pro-rata.

      The first year is past, so they are still soley responsible for max 350 over the next 18 months. Costs above that are shared.

      That means to remain a 1/3 partner in the 5 billion dollar program they need to put in a max 350 million. I would take that deal.

      • A couple of the articles. I think Bombardier would like Airbus to buy the program. To develop an NSA in the three lengths in the category of 110 to 165 passengers in two seating classes would probably be 10 – 15 Billion. Well, for Boeing 15 – 30B because they would have to ship manufacturing to Brazil and maybe some other countries without slide rules.

        https://www.bnnbloomberg.ca/bombardier-reassessing-role-in-a220-venture-with-airbus-1.1374987

        https://www.ainonline.com/aviation-news/air-transport/2020-01-16/bombardier-mulls-exit-a220-program

          • I don’t know, but that poses many interesting scenarios. Earlier, I had thought United Tech should be interested in a program that features only their engine. I do know, as you probably do too, that Bombardier has sold their A220 wing and another parts plant to Spirit. The whole landscape in global aviation may change drastically. The A220 could be around for decades, but it could be up in the air (no pun intended) as to who ultimately will benefit from this financially.

          • Airbus has an option of first choice on its partners shares if they want out.

          • BBD can sell their share 7.5 years after the agreement (mid 2018).

          • Afaik BBD can sell their shares anytime, Airbus has priority. After 7,5 years BBD can demand from Airbus rebuying shares.

      • (Why would you buy it outright when you can have BBD on the hook for 700 million over the next couple of years?)

        That’s exactly my point! Airbus is no White Horse is this whole situation. As Boeing was discounting 737s to potential customers, John Leahy was offering up condescending little statements about the CSeries being a cute little plane and also discounting A320 series planes! The sale of half the CSeries program for One Dollar by Bombardier was an act of desperation.

        And conceivably looking forward probably Airbus is going to get a whole new NSA in three lengths from 110 passengers to 165 in two classes, for, for what? What’s it worth? They got the Bombardier Corporation on the ropes! All this talk about getting costs down is bull. The first few years they don’t make money, but if they build the 155 seat plane, the gross on sales is in the hundreds of billions of dollars. Airbus snookered Bombardier and Boeing snookered themselves.

        • If you believe in it you buy it outright now because it will be for a lot less than buying it later. Yes, BBD is committed to providing up to another 350M. But if the program is a success come two years from now market value will have increased by more than that. Plus right now BBD is a distressed seller.

  7. Before the C-Series was certified one of the flight test vehicles flew all over the USA testing routes and airport facilities. I followed it on Flightradar24. It stopped at most cities once or twice but it went to Seattle multiple time, seven if I remember it correctly. At the time it seemed that BBD was showing off the plane to BA in an attempt to get them interested in investing in it.
    Instead of involving their engineers and accountants, BA management brought in their lawyers and ended up letting a golden opportunity slip through their fingers.

    • And let’s face it, had Boeing bought into the program it’d have turned out to be a decent revenue sustainer whilst the MAX is stuck on the ground.

      • Revenue sustainer ?
        Airbus is still putting cash into the program other than what its doing at the FAL at Mobile. So the earnings are a ‘future prospect’.

    • It suspect BA wanted to kill the C series for the same reason it killed the B717, so it could make more B737. The B717 is an outstanding aircraft with amazing dispatch reliably and maintainability for both airframe and engine but it needed a modern supercritical wing.

  8. Well, had Boeing picked it up when they had the (earlier) opportunity that ramp up phase might now have been behind them. And (pedant mode, sorry) I did say revenue rather than profit!

    I think that at the moment Boeing would welcome something, any product that could be sold, because they’re a bit short of those at the moment. Turning a profit is something that could be achieved eventually.

  9. Airbus recognized their A318-A319 series and even A320 could get under pressure from the CSeries with many of their customers. And acted.

    Boeing denied, assured themselves their customers will wait for them, they couldn’t close a business case & concluded having the company buy back stock would improve their own salary packages far better in the near term.

    I think the management payment packages, kpi’s, goals need an overhaul.

    • Not sure I buy that.

      BBD would have gone belly up and the threat was gone.

      What they did see was they could get a under A320 modern aircraft and an A320 replacement in one fell swoop.

      Ergo, with the 500 they have an A320 replacement as well as the 100 and 200 for killing the market below it.

      They then can focus on A321, new wing, new version or replacement.

      And Boeing has no answer for it whats0ever.

      Kind of like Playing the Warriors a few years ago, nothing you cold do to win.

  10. 7-10% better on trip cost versus an A320neo or 737 max 8 must be a mistake right? With 20% fewer seats, being only 7-10% better on trip cost doesn’t get you to a 5% better cost per seat.

      • That’s what I thought, just pointing out that his comments don’t seem to be consistent.

        Would be very curious to see what your analysis yields.

        • Based on Air Canada and its seat counts
          A220-300 137 seats
          A320 146 seats ( Rouge has 162)
          AC dont fly the A320 neo but have the Max 8 with 169 seats

          na, your mistake is scaling down might work for a shorter fuselage version of same plane , but not for a ‘smaller overall’ more modern design.
          Scotts detailed analysis would be be for subscribers.

          • I was not scaling down anything, nor making my own estimates. Simply working with the numbers that the Airbus CCO provided. One of his two figures must be incorrect: 5% better cost per seat, or 7-10% better cost per trip. Mathematically, they can’t both be correct when comparing a 137-seat A220-300 vs a 172 seat 737 MAX 8, or even a 160-seat A220-300 vs a 189 seat 737 MAX 8.

          • na,

            the amount of seats and range were not mentioned for the cost comparisons.

            Some weight comparisons:

            Fully fueled the 737-8 can carry 144 pax, 155 pax for the A220-300.
            With 155 pax the 737-8 can carry 13.5% more fuel than the A220-300.
            In comparisons with a fully fueled 155 pax A220-300 the 737-8 can not carry 170 pax. The A220-300 can have max 9% less seats, not 20% as you posted.

            The OEW for the 737-8 is 27% higher than for the A220-300.

  11. Fliegerfaust is reporting rumours of technical problems including “spar cracks”
    The C series first flew more than 6 years ago, and whether the rumours are true or not, its obvious that the product is nothing like mature enough to be operating for the likes of South West or Ryanair.
    Boeing has a lot more muscle, but they can’t realistically develop,mature and ramp up a replacement for the 737 in less than 10 years.I don’t believe that the MAX was anything other than a stopgap, but if I’m wrong and they are not already progressing NSA, they are really in trouble.

    • “product is nothing like mature enough to be operating for the likes of South West or Ryanair.” . Have you never heard of 737 pickle fork cracks ?

      • Pickle forks are a mature aircraft problem. Even the MAX turned out to be too immature,also GTF for indigo.
        Mk 2 A220 400 (possibly with different engines, if P&W doesn’t get it’s act together) due for c2025 could be ideal for Southwest.

      • Delta, Swiss Airlines (Lufthansa,) Canadian Airlines, JetBlue, Air France, Korean Air, leasing companies have jumped in. Delta is noted to be one of the most astute purchases of aircraft in the business. And now after the MAX has been delayed over a year to this coming summer for its RTS, I’d say there is a better than 50% chance LUV orders either an A220 or an A321. Interviews of Gary Kelly show a really concerned man. Does he want to have a legacy of a fleet totally composed of the most feared plane in History? Well, I mean after the F-22…

  12. When history is written, the A220 will be what killed Westjet and maybe Bombardier….

  13. I think the wings on the A220 are overkill. For planes this size AlLi is just as good and much cheaper.

    • You could be right, but what makes you think that? Carbon is expensive, but so is aircraft grade aluminium and you don’t need a lot of it. You save thousands of operations forming, shaping, annealing, drilling, joining, riveting, corrosion protection, etc. The wing will be smoother, lighter and more fatigue risistant.The only downside I can see is the added complexity of lighting protection.
      Perhaps we are not far enough on the learning curve, but I believe that carbon wings are intrinsically cheaper to produce.

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