Boyd Group on JB EMB-190 Order

[whatkindoffreshhell]

Thanks for the article and please let me know where you found it!

The Airbus sales rep for the jetBlue account must be ready to kill something! For all the factors listed above, Airbus probably thought they had this order in the bag. I now have increased respect for Dave Neeleman''s business judgement!

Airbus has also mis-read the market with this A380. Yes, I know they have 100 orders. But the market has moved to smaller craft with greater frequency. Boeing is playing a smart hand here with their Dreamliner (7E7) and also by throwing out the possibility of a joint venture to construct this new plane.

Thanks again for this contribution!

 

[FM2436]

Hot Flash - June 16, 2003

The jetBlue Embraer Deal...
It''s A Lot More Than A Jet Order
Airbus Just Took One Right On The Nose Cone...

Two very significant events took place last week. One caused a media frenzy. The other was hardly noticed, if at all.

The first was the jetBlue order for 100 Embraer E-190s. The second notable event was when Frontier, at the Paris Air Show, accepted the keys to the carrier''s first Airbus A-318.

Airbus Thought Boeing Was The Competition. They''re Thinking Again. The significance of these events has apparently been lost on most everybody, except maybe for some thunderstruck folks deep within the Airbus and Boeing strategic planning departments. While the media types babbled on about jetBlue''s regional jets, the folks in Toulouse no doubt got the real message: the 170/190 E-Jet platform has launched Embraer into the forefront of the mainline airliner business. Worse, with the jetBlue order, Airbus just got kicked in the nose cone, and possibly even relegated to a secondary role in the 100-seat market as well. The A-318 is in deep trouble.

Consider: jetBlue ordered a fleet of 100-seat airliners. Simply because the manufacturer was Embraer, the veneer types in the media called it a big regional jet order. (They must have missed the press releases from both the airline and the manufacturer: neither used the term regional jet.) At the same time, Frontier took possession of the A-318, which Airbus describes as its 100-seat airliner. But nobody called it a regional jet when Frontier ordered it. Frontier ordered a handful of A-318s. jetBlue ordered and optioned 200 Embraers.

The E-190 is a 100-seat jet with a range well in excess of 2,500 miles. The A-318 is what Airbus bills as its own 100-seat jet, and it also has a range in excess of 2,500 miles. The real-world, in-fleet mission capabilities of the two aircraft are not much different, but some media trendies, many of whom couldn''t recognize a E-190 from a Curtiss Condor, saw the name Embraer and confidently referred to the aircraft as a regional jet.

Airbus Just Got The Bionic Winkie. The 2003 Paris Airshow, at least behind the scenes, was likely not a real happy place for Airbus. While they were publicly tipping the bubbly, toasting a couple of A-380 orders, they where being zapped out of the lower end of the fastest growth airliner demand category.

Consider The Impact. The jetBlue order likely hit Airbus like a brick. The A-318 is almost 100% compatible with the A-320. Cockpits. Maintenance. Parts inventory. Training. Pilot exchangeability between the two. Consider: jetBlue has over 100 A-320s in operation and on order. From that perspective, the A-318 was the slam-dunk choice when jetBlue was looking for a smaller airliner, right? Wrong. The relative economics of the two airplanes apparently more than made up the difference. jetBlue clearly understands that it isn''t the number of seats, it''s the economics of the airplane.

The hard fact is that the A-318 and the E-170/190 series are direct competitors. Looking at what both airplanes can do, say, from Frontier''s Denver hub, there isn''t much difference. The A-318 is a little bigger, and has more range, but both aircraft have very similar in-fleet mission applications. Both, by the way, can reach either cost from Denver. Both can offer seats more than an inch wider than a 737. The only difference, and it''s a big one: the economics of the Embraer are likely leagues better than the A-318, which is a downsized A-320.

The Beginning of The RJ End. Far from being an extension of the RJ phenomenon as some are trying to spin it, the emergence of the E-170/190 as a viable player in the US is another signal that the RJ order cycle is ending fast. While

 

[lownslow]

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On 6/16/2003 12:54:02 PM whatkindoffreshhell wrote:

Airbus has also mis-read the market with this A380. Yes, I know they have 100 orders. But the market has moved to smaller craft with greater frequency. Boeing is playing a smart hand here with their Dreamliner (7E7) and also by throwing out the possibility of a joint venture to construct this new plane.

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The 7E7 might not be a bad idea - but are there any plans in the works to design a new aircraft for the market the 737 is in currently? While the 737NG is a significant improvement over the previous generation, a new clean design would surely offer greater efficiency... the 767, which the 7E7 seems to be replacing, is around 25 years old - the 737 dates back 38 years.

 

[FM2436]

www.airportplanning.com

Then click Insight and Commentary, then click Monday Hot News Flash.

 

[ITRADE]

With JBs decision to accept the Embraer over the A-318, really makes you wonder what the chatter is like over at Frontier''s HQ....