The E-Jets arrive

The E-jet Family

The E-Jets range comprises four different models, the 170, 175, 190 and 195. All are based on the same fuselage cross section and wing design, but with varying weights, engine thrust and a longer wing span for the two larger models.

The initial E-170 (originally ERJ-170, but the ‘RJ’ for Regional Jet subsequently being dropped as Embraer sought to position the aircraft to mainline carriers) was launched in February 1999. First orders were received for the 170 in June of that year, while first flight was on February 19 2002. Type certification was granted in November 2003, allowing the first 170 delivery, to LOT Polish Airlines, on March 8 2004.

The 70 to 78 seat 170 was followed by the slightly higher capacity 80 to 86 seat, 1. 77m longer E-175 (first flight June 14 2003) with which it shares its GE CF34-8E engines, wing span and other key aircraft systems.

The 96 to 108 seat E-190 was the second major variant and third model of the family to appear, featuring a 6. 3m fuselage stretch, 2. 7m greater wingspan and more powerful CF34-10E turbofans. It first flew in on March 12 2004 The longer still E-195 (first flight December

“It has the capabilities to fly where we fly today with our 737s, but we’re able to do it at a lower trip cost, we’re able to do with an aeroplane that aesthetically inside has no peers. ”

7 2004) seats 104 to 114 passengers and shares the 190’s key systems, engines and wing span, rounds out the range.

All four models are offered in standard or long range configurations with increased takeoff weights.

Perhaps the E-Jet’s most notable feature is the ‘double-bubble’ fuselage. It offers a comfortable and airy environment with ample height and sufficient width at hip and shoulder level for four abreast (2+2) seating, with economy class seats the widest of any narrow-body airliner. The windows are almost as wide as they are high, and the thin window sills and clever design of the interior panelling allows for a wide field of view outside, adding to the perception of space and light inside the cabin.

On Approach

Charter start-up SkyAirWorld was first to commit to the E-Jet in Australia, announcing on October 2 that it is leasing one E-170 for delivery in early March, and one E-190 which is expected in early 2008. Both are being leased from GECAS, and SkyAirWorld also holds options for an additional two 190s. It also has short and long term hedging strategies in place based around acquiring additional E-Jets should sufficient market demand arise.

Next out of the blocks was Virgin Blue which finally confirmed a long-rumoured Embraer order on November 2 for three 170s and 11 190s, plus options for a further six 190s, and this large order likely put it in a strong bargaining position allowing it to gain early 190 delivery slots from October 2007.

“We’re perpetual negotiators,” CEO Brett Godfrey said of the drawn out evaluation process during the airline’s Embraer launch during an E-190 demonstrator’s November Australian tour, “and in the last few years no-one at Embraer that we were ever going to get this deal across the line. . . ” So why did Virgin Blue opt for E-Jets? “It is a bridging of the gap,” Godfrey continued. “People refer to it as a regional jet, but it is no regional jet, is the first airliner that has bridged that gap between narrow-bodies (like the 737) and a regional jet. ” “The beauty of this aeroplane is that it is not isolated to regional ports . . . quite frankly the opportunity for this and for more of them is that it allows our airline to basically deploy it on any of the existing routes we fly today. It has the mission capabilities to be able to fly the length and breadth of our country, it has the capabilities to fly into the Pacific to where we fly today with our 737s. But we’re able to do it at a lower trip cost, we’re able to do with an aeroplane that aesthetically inside has no peers. We certainly married this type up against many, many others of its type, and it was far and away the preferred option for us for this period of time. ” A key factor in Virgin Blue’s decision was the E-Jet’s availability.

“We have a bit of a capacity issue over the next couple of years,” Godfrey explained. “Boeing’s (737) production line is pretty well closed out. . . These aeroplanes which come in over two years just allow us to do noth-ing other than maintain our marketshare, so without them we were in some issues, or else having to go out and look at some secondhand Boeings, which has not been our model to date. ” But the E-Jets not only will bring extra capacity, but extra flexibility.

“It’s a wonderful aeroplane for being able to pick up some markets we fly today that we’re not doing particularly well on. At 80 per cent load factor on this aeroplane (the E-190) on a (737)-800 is around a 50 per cent load factor, and you can’t make money at that. If all goes according to plan this is a second but just as equally important platform for us. ” Like SkyAirWorld, Virgin Blue’s 170s will be the first jets to arrive from May, allowing it to test the market and get the aircraft bedded down before the larger 190 is put to work for the Christmas rush. From late 2007 the E-Jets will then be delivered at the rate of one aeroplane a month.

Virgin Blue is typically playing its cards close to its chest on which routes it plans to employ the E-Jets, no doubt to keep Qantas guessing. “We haven’t decided yet,” Godfrey said. He added that “we could easily deploy all these aeroplanes on our existing markets today and all that we’d do is raise our capacity by some-where around five or six per cent. But again, we’re doing it over a couple of years so it still means we’re capacity shy just to maintain our positioning. So to be very frank, we’ll put them where we think they’d best need be.

“There are certainly some regional oppor-tunities that we’ve looked at,” Godfrey con-tinued, but, “the model was done on justifying that the aeroplane could do nothing other than operate within the existing network. We’ve showed that by redeployment of our bigger

We’ve showed that by redeployment of our bigger aeroplanes and then deploying these on the thinner routes, it could change the economics of our business. ”

aeroplanes and then deploying these on the thinner routes, it could change the economics of the business. Anything over and above that is cream. ” Finally, Darwin based AirNorth announced in late November that it will operate a single E-170, also through GECAS, to support current and prospective fly-in/fly-out resources support contracts out of Darwin.

Both AirNorth’s and SkyAirWorld’s 170s are secondhand machines oper-ated by Hong Kong Express, which is trading up to larger 737-700s following its recent realignment as part of the larger Hainan Group.

“Hong Kong Express is part of the Hainan Group, and is being positioned as an all-737 airline,” Embraer’s, Managing Director for Asia- Pacific, J Bruce Peddle told Australian Aviation.

“Their 170s are being disposed of, and the 190s, the first of which is due in late 2007, will be operated else-where in the Hainan group. ” The new E-Jets will provide an interesting contrast to the QantasLink Boeing 717s in airline service and Alliance and Skywest Fokker 100s, National Jet BAe-146s, and OzJet’s 737-200s it will compete against in the charter market. All those types are older machines no longer in production. The Fokker 100, 146 and 737-200 are all relatively cheap to acquire, making them suited to charter work, but are more expensive to operate than comparable E-Jets. The Embraers in turn offer better operating eco-nomics and performance, but higher ownership costs.

Evenso, Embraer claims the breakeven load factor for a 170 over a typical 500nm (926km) sector is a low 51 per cent, while the 190 requires just 54 per cent. “I think that, properly deployed, this air-plane has some very attractive characteristics and econom-ics,” Peddle said. “It’s a new generation, it has the right sizing in the right markets, and it has a much enhanced passenger environment. ” Said Godfrey said of the E-Jet’s economics, “This no doubt will increase our aver-age cost per seat. But in terms of the trip costs and terms of the delta between costs and profit we hope it will improve that margin. It came to the ability to have a cost that we believe is manageable, (with) a low cost per trip on some of those thinner routes. ” Certainly the E-170 is a full generation ahead of most of the types currently employed on resource support work, a fact that SkyAirWorld CEO David Charlton is quick to exploit, categorising the Embraer as a “category killer aeroplane. ” “Just looking at the rate of growth of the resource industries and the age of the fleet servicing them suggested to us that applying a brand new product would almost instantly gain us marketshare,” Charlton told AA. “We also looked closely at Bombardier’s CRJ705 and 900, both of which are very capable and are significantly cheaper than the Embraers, but it came back to the customer’s prefer-ence for a wider cabin cross section. To go in with a CRJ cabin profile would have been to go in with a parity or worse against the 737-200, 146 and F100. ” “We looked at the Q400 as well,” Charlton added. “While it is also a really good aeroplane and its economics would generally work well for fly-in/fly-out operations, the miners we have spoken with have told us they want jets. The Q400 is a great aircraft providing the customer set is comfortable with a turboprop. We even looked at 737s, but our evaluation of the Australian jet charter market showed that the majority of work done was in the 65 to 70 seat class, so it just didn’t make sense. ” While the E-Jet line is very competitive against older types, it also compares favourable to the 737, if the operator doesn’t need the extra seating capacity “Generally speaking, if we were to look at an operating cost comparison of the 190 compared to the 737-600, we would probably have a 14 per cent lower cash operating cost,” Peddle said. “So I’d estimate the 737-700 (which carries about 30 per cent more passengers than the 190 when full) would probably cost between 20 to 25 per cent more to operate. ” SkyAirWorld agrees that, while the 737-700 offers bet-ter economics if both aircraft are full, the balance swings in the 190’s favour on some of the thinner routes which may struggle to fill a 737, and then there is the Boeing’s almost Embraer’s E-190 demonstrator during its Australian visit. E-Jets have accumulated over half a million flying hours since entering airline service in 2004. (Paul Sadler) double upfront acquisition costs or lease payments to be considered.

David Charlton also said that the 737 needs special dispensation to operate out of 30 metre wide airstrips of which there are many across Australia’s resource-rich north and regional areas. “Where we do win is field performance and we can use 30m wide strips, whereas all 737s need a flight supplement to do 30m ops,” he said. “However, I think the -700 is a great airframe for some of the longer service like those in the Pacific. ” By the time Virgin Blue’s 190s arrive the type will be capable of long over water flights. Although, one shouldn’t count the 190 “Our plan is to have 120min ETOPS approved and finalised by end of 2007, in time of the first delivery of the Virgin Blue jets, so they should be first to market with ETOPS capable aircraft,” Peddle said, adding that Virgin Blue would then need to do further regulatory work to be certified for ETOPS as an operator. “We’re not planning to do ETOPS on the 170 at this stage. ” In the meantime, SkyAirWorld will be concen-trating on some of the longer and thinner overland routes which require the economies offered by the 170 and 190 in order to remain viable. “Because of the payload range capabilities of the 190, we can do return fuel mis-sions on many sectors where there is minimal infrastructure on the ground, something like Perth to Port Hedland for example,” Charlton explained. “Our aircraft will have its own integral airstairs, so all you’ll need is two blokes, one with a baggage belt and cart, and a guy to do the chocks. ” “The 190 has a maximum payload of 12,720kg which is good for 600nm (1110km) sectors,” said Bruce Peddle. “Allowing for 100 passengers at 100kg including luggage each, that leaves room for a cargo capability of 2700kg. ” SkyAirWorld is yet to con-firm where or with whom its first 170 will enter service, but claims it has quite a few op-tions at this early stage. “We have a number of options for the placement of the first aircraft and are looking for the best outcome,” Charlton explained. “There’s been an overwhelming response in the marketplace for this aircraft, from fly-in/fly-out, airline support, corporate and sporting charters, and poten-tially some work for various government agencies. ” “We’re also looking at some additional aircraft,” he said, adding that there are more 170s coming onto the used market during 2007 as airlines like Hong Kong Express trade up or realign their business models. “Depending on the customer, we could provide a single or a definitive two-class product. ”

Future Opportunities

Embraer delivered its 200th E-Jet to Panama’s Copa Airlines in early December and is holding orders for more than a thousand aircraft if all options are exercised. Following the company 190’s world tour in the past six months during which Embraer supported vari-ous airline launches such as those of SkyAirWorld and Virgin Blue, and was demon-strated to potential customers, Embraer is quietly confident the aircraft will generate further sales in and around the Asia Pacific.

The Embraer 190 dem-onstrator, the second off the production line, was equipped with a comfort-able 93-seat interior which included nine seats in busi-ness class in a 2+1 layout, and 84 economy class seats with an 84cm (33in) pitch. It finally completed its world tour in December in Taiwan, after commencing at the UK’s Farnborough Airshow last July 2006. In between, it visited Europe, the US and Canada, South America, southern Africa, the Middle East, and a second leg in Europe before coming to Asia, the Pacific and Australia where it spent more than a week visiting most of the major airports on the eastern seaboard including Brisbane, Sydney, Melbourne, Canberra, Adelaide and Hobart and was demonstrated to Virgin Blue’s and SkyAirWorld’s executives and prospective clients, media and regulatory authorities, and interestingly, to Qantas, which has showed renewed interest in the E-Jet line since Virgin Blue’s order.

Embraer says that, while there are some sales prospects in our immediate region, there are no active campaigns cur-rently underway. “Generally, the interest in the aircraft in New Zealand is very basic at the moment,” Peddle ex-plained. “We did a demonstra-tion tour there and the aircraft was very well received, but there are no detailed pro-grams at the moment. We’ve also taken the aircraft to Fiji where there was some general but no detailed interest at this stage. ” But for now Embraer can enjoy its Australian success. The E-Jet aircraft certainly have the performance and cabin comfort to make them well suited to local operations.