Airbus increases range of A220; what it means for India?

I have been a keen follower and believer of the Regional Jets market since 2011 and an article on Network Thoughts about Regional Jets in India is still one of the most read ones. Needlessly to say, I closely tracked Bombardier and Embraer programs for the next generation regional jets. Subsequently, Bombardier C-series became the Airbus A220 family while Embraer has been re-named as Boeing-Brazil Commercial only recently.

On 21st May 2019, Airbus announced major performance improvement to its A220 family comprising the A220-100 and A220-300.The improved product will be available from second half of next year as per Airbus.

The A220 aircraft MTOW (Maximum take-off weight) will be increased by 2268kg (2.3 metric tonnes) and will lead to an increase in range with the A220-300 having a range of 3350 nm or 6204 km and the A220-100 will have a range of 3400 nm or 6296 km, which is about 450nm (833 km) more than currently advertised. Airbus had unveiled the new name for the erstwhile C-series on 10th July 2018.

I have become a proponent of a fleet mix which comprises the A220/E2 + A321/B739 + widebody and this part of the series looks at the A220 on the backdrop of the increased range.

Lack of orders from Asia

While the aircraft type has seen over 500 orders, there aren’t many from Asia. Infact, only 10 from the current order book are from Asia and all of them are with Korean Air. India has not been a popular market for Regional Jets. The CRJs of Air Sahara were the longest serving and had steady operations. Paramount, Air Costa – both Embraer operators shut shop. Air India had a bunch of CRJs which were withdrawn from service and Star Air is in infancy yet but could see promising growth in current environment which a type (E-145) hitherto not operated in the country.

From Regional Jet to something bigger

When it comes to India, the newly increased range is of little significance. With the average stage length hovering around 1100 kilometers across all airlines on the domestic circuit, the 6000+ kilometer range might seem an overkill, but it may not be the case if the aircraft is deployed wisely.

Both IndiGo and Spicejet – the fastest growing carriers in the country who dominate the landscape have international ambitions. But in a country where Airbus has nearly 80% of the market share in narrow body operations with the Airbus A320 being the mainstay and at times the only aircraft type with the airlines, it is difficult to think of anything beyond a plane of comparable range and seating capacity.

Today’s regional jets, the A220s and Embraer’s E2s have far outgrown the definition of “Regional” and for anyone who has followed the debate of B787 v/s A380 – lesser number of seats and more point to point v/s more number of seats and hub to hub, it’s time to think of the same at a smaller scale, range and seating.

Summary

This information from the Airbus website clearly shows how there is an overlap between the A220-300 and the A319neo in terms of seats with a difference in range. The A220-100 and A320neo overlap in terms of range with a difference in seating.

Network Thoughts

Airlines in India, including the low-cost carriers (LCCs) have moved beyond the single fleet type, with only Go Air being a single fleet type airline currently. It takes a while for airlines to develop a market and get a strong foothold and the challenge is bigger if it is international. New brand, new distribution channels, point of sale issues and the sudden increase in costs are just some of the problems which airlines deal with. This leads to slower than anticipated sales and a higher cash burn. A sudden spike in capacity without a significant feed can also put pressure on load factors which subsequently puts pressure on yields, total revenue and puts the route in jeopardy.

A fine example could be of Indian low cost carrier GoAir entering Male and the domestic market leader starting Bengaluru – Phuket flights. Both the airlines have struggled have pulled out, for a limited period or for good. What could have been the issue? The demand was too low to fill the 180 seats or the yields needed to stimulate the market did not render the route profitable? Did the airlines try not dilute yields and lead to higher losses? An answer to this could well have been a smaller aircraft by capacity in the fleet. While IndiGo has one, it does not have the legs to fly that long and GoAir has none.

Will it help airlines have an aircraft which is just right to start a new route, about 70-80 seats smaller than the current 180 or 189 seater planes in the fleet of airlines? When the route matures, the higher capacity planes in the fleet could take up the route while this airliner can be used to start another. Just another “Thought” about airline “Network”.

A220

The images provided by Airbus on special request from Network Thoughts shows the range of the A220-100 and A220-300 aircraft. The range clearly shows how airlines with ambitions to launch flights to Central Asia can have aircraft with lower capacity deployed on such routes till they mature.

Range from DEL

Range from BLR

Range from BOM

Tail Note

There has been a lot of talk about how the A220 is feature rich. From modern windows to the ambient lighting and air quality, there is a lot that the airline has achieved, to an extent that a seamless integration with Airbus will also see Airbus use some of the features in years to come – taking the best out of what was researched and built in Canada to the entire product line.

However, the A220 seats 5 abreast with 2 – 3 seating. Indeed it is just one middle seat per row as compared to 2 in a B737 or A320, but there remains a middle seat akin to what the first generation jets were like the MD-80.

I have not traveled on the A220 and thus would reserve my comments on the experience for now.

For the sales to be driven, what is needed is a sweet deal for the airlines who are willing to look beyond the lowest CASK parameter in markets like India, Kazakhstan, Indonesia and Vietnam which also have the lowest RASK !

Note: In the next few days, Network Thoughts will publish a detailed article on the Embraer E2, followed by an article on Regional Jets with some new research.

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