Will Horton Senior Contributor, Aerospace & Defense | 20 May 2020
The Airbus A321LR may have an opening to replace Air Canada’s cancelled Boeing 737 MAX 9 aircraft.
Air Canada cancelled 11 737 MAXs in March so it could have flexibility to order other aircraft, according to CFO Michael Rousseau. The change reduced Air Canada’s firm MAX order from 61 to 50.
“It gave us some optionality on potentially some other planes we might want to look at in the middle of the decade,” Rousseau told the Wolfe Global Transportation Conference. “Those 11 were basically being delivered in the middle of this decade.”
Rousseau did not specify the candidates to replace the MAX 9, but he was upbeat when asked about the A321neo.
“The LR would be more interesting to us than the neo,” he said. The A321LR has been increasingly out-performing the 737 MAX 9 on payload and range. “We’ll see how the market evolves.”
Air Canada operates 15 A321s. “They’re good, cost-efficient planes for us,” Rousseau said. “We like A321s.”
Air Canada’s 2013 selection of the 737 MAX over the A320neo family was a major win for Boeing BA since Air Canada never operated the 737 NG and has no A320neo family aircraft on order.
Rousseau is positive about the 737 MAX 8, of which it has received 24. “We still like the plane,” he said. “It’s very good for Air Canada.”
The 737 MAX can help re-build traffic after COVID-19, Rousseau said.
“We think North American markets come back first,” he said. “Planes like the Airbus A220 and the MAX are the two most efficient planes to support that market.”
Air Canada expects the 737 MAX grounding to be lifted later this year, improving financing options.
“Once ungrounded, we believe the market will finance the MAX,” Rousseau said. “Also EXIM is back in business.” Air Canada will finance future MAX deliveries via EXIM, EETC or sale and lease back.
737 MAX customer Southwest Airlines LUV noted it is hard to argue for MAX grounding compensation while COVID-19 grinds most traffic to halt. This dilemma is not applicable for Rousseau.
“We’ve come to terms with Boeing already,” he said. “There won’t be any more adjustments from what we had already negotiated.”
The MAX reduction was not because of the start of the coronavirus outbreak, Rousseau said. “It was a purely independent fleet decision we made to give ourselves a little more fleet flexibility.”
Air Canada in June 2020 is adding 5th daily service on Toronto – Vancouver route, including the addition of Airbus A220-300 aircraft. The A220-300 will operate as AC111/122 service. Additional changes to planned operation remains likely.
AC107 YYZ0700 – 0854YVR 333 D AC103 YYZ0805 – 0950YVR 789 D AC111 YYZ1245 – 1448YVR 223 D AC123 YYZ1800 – 2100YVR 321 D AC125 YYZ1930 – 2115YVR 788 D
AC106 YVR0800 – 1528YYZ 321 D AC108 YVR0900 – 1620YYZ 788 D AC116 YVR1330 – 2055YYZ 333 D AC118 YVR1430 – 2150YYZ 789 D AC122 YVR1645 – 0018+1YYZ 223 D
AC111/122 operates with A319 on Day 1 from 16JUN20. The A220 briefly operated this route on selected dates in late-April 2020.
There are winners and losers of every crisis in the aviation industry. The coronavirus pandemic has already forced some airlines, like Virgin Australia, into restructuring. It’s also grounded many large aircraft like the Airbus A380, but an emerging winner may be a Canadian jet that recently got a new lease on life and is now proving its worth.
That jet is the Airbus A220, formerly the Bombardier CSeries. The plane benefits from its small size and low operating costs coupled with operating capabilities that rival larger planes like the Airbus A320 and Boeing 737. These are proving assets to airlines looking to slash expenses while maintaining a minimal flight schedule through the COVID-19 crisis.
“When we come out of the other side of this we continue to be excited about the A220s and the benefit that can bring to JetBlue”, JetBlue chief financial officer Steve Priest told analysts and investors on 7 May. “The economics of this aircraft are spectacular”.
The coronavirus crisis has prompted something of a reckoning at airlines. For years fleet planners pushed for larger and more efficient narrow-body models that could fly, for example, transcontinental routes in the U.S. with a full load of passengers. Airbus and Boeing delivered hundreds of their largest narrow-body models, the Airbus A321 and 737-900ER respectively, to airlines across the world.
Then the spread of COVID-19 and fear of the virus halted most air travel in just a few months. Globally, the number of flights was down 81% year-over-year on 5 May, according to flight-data firm Cirium. In a slight positive note, the number of flights was up 19% compared to the week before.
More than half of the global A220 fleet was tracked flying during the week ending 4 May, the data shows. This is a higher percentage than for either the A320 family, 737 family or Embraer E-Jet family.
“Airlines want jets that offer equivalent range and equal or better economics than bigger models, but fewer seats”, Teal Group analyst Richard Aboulafia told TPG. “The A220 is one of the very few products that bring this to the table”.
The A220-300 can fly as far as the A320, about 3,855 miles, but more efficiently and with fewer passengers. The A220 is lighter than the legacy Airbus narrow-body and benefits from the latest generation of engines.
Those advantages play out in the decisions airlines are making during the pandemic.
For example, Delta Air Lines is parking all 62 of its A320s but still flying its 31 A220-100s. The Atlanta-based carrier fits 109 seats on the latter jets compared to 157 seats on the former. In addition, the smallest A220s can fly nearly 100 miles further than the A320s.
More A220s may also be good for passengers. The aircraft are quieter than most larger jets and, in many cases, offer a better onboard experience than comparably sized planes. In the U.S., Delta has even installed seat-back inflight entertainment where most other carriers — excluding JetBlue — have removed systems from their planes.
Even in Europe, where first class often means a blocked adjacent seat, the A220 is a comfortable option for travellers.
“The 2-3 configuration, large and modern bathrooms, big windows and modern touches combine to make for a pleasant flying experience”, wrote TPG’s Zach Griff after two A220 flights on Swiss last summer.
Zurich-based Swiss operates 29 A220-100s and -300s. Many of the planes remain in the air, with the A220 operating 83% of the airline’s flights in May, according to Cirium schedules.
Demand for new A220s continues apace. Air Canada maintains plans to take its full allotment of the jet this year, with 14 A220-300 deliveries still pending. The move comes as the Montreal-based carrier retires its 14 E190s and 65 more Airbus A319 and Boeing 767 jets due to the crisis.
In the U.S., New York-based JetBlue plans to take its first of 70 A220-300s by year-end, Priest said this week. The airline has accelerated A220 deliveries even as it postponed the arrival of 22 new A321neos to beyond 2022 amid broad efforts to cut expenses. The airline will configure its A220s with between 130 and 140 seats compared to 200 seats on its A321neos.
And in Europe, Latvia-based Air Baltic plans to emerge from the crisis as an all-A220 operator after retiring its last 737-300s and ATR turboprops. The airline operated 22 A220-300s and had orders for 28 more at the end of April, according to Airbus orders and deliveries data.
The jury remains out on whether the coronavirus will prove a pivotal moment for the A220. Airbus had just 529 outstanding firm orders for the aircraft — compared to 6,156 for its A320neo family — at the end of April. And the planemaker has not received any new A220 commitments since the crisis began.
Airbus continues to produce four A220s a month even as it has slowed rates for other passenger jets. However, plans to increase production are indefinitely postponed.
“As preferred as it may be to acquire aircraft to match the need of the network, with coronavirus, the airlines are no longer afforded this luxury”, wrote The Air Current managing director of analysis Courtney Miller in a piece on 7 May. Existing commitments for the A220, as well as the E-Jet-E2, are likely to be delivered and utilized. But new orders from cash-starved airlines are unlikely, he said.
Take American Airlines, for example. The messaging of its plans to retire or park five aircraft types from its mainline fleet — including its smallest, the 99-seat E190 — focuses on simplifying its fleet, not adding new optimally-sized models like the A220. In fact, the carrier is even spending money to reduce fleet complexity, moving forward with work adding seats to some A321s and 737-800s. The effort, part of American’s “Project Oasis” updates, comes with the expectation of operational savings after the coronavirus subsides.
But fleet simplification, as American and others are undertaking in a big way, does not necessarily mean orders for new types will dry up completely. Boeing CEO David Calhoun made just such a point during the planemaker’s first quarter earnings call on 29 April.
“This is that moment where rationalization efforts get big”, he said. “And believe it or not, in some cases, it even requires that maybe new aeroplanes [be] ordered”.
More than a quarter of a century after retiring its last dedicated freighter, Air Canada is back in the business of flying exclusive cargo flights.
Last month, the passenger airline removed seats from four Boeing 777 300ERs, more than doubling the space available for goods on the planes. The aircraft are primarily moving masks, gowns and other personal protective equipment necessary to combat COVID-19 from Shanghai to Canada. The airline also plans to convert four Airbus A330s to serve routes to Europe and South America.
“We weren’t looking to be in the freighter business until this moment,” said Tim Strauss, the airline’s vice-president of cargo. “We’re doing this so we can get more PPE equipment back into Canada faster than could have been done otherwise.”
American Airlines and Finland’s Finnair have also rapidly converted aircraft into freighters, and new announcements arrive weekly. Now everyone from ground crews to airport officials to regulators are scrambling to adapt to these strange hybrid planes.
While not unprecedented, such wholesale repurposing of aircraft occurs only during humanitarian crises, said Jonathan McDonald, an analyst with aviation consultancy IBA. Rare examples included large-scale airlifts after a tropical cyclone destroyed Darwin, Australia, in 1974, and during famines in Ethiopia.
“In history, yes, there have been one-off events. You had the Berlin Airlift, I suppose, but that’s going back 70-plus years.”
Normally, people are a passenger airline’s most valuable cargo. But COVID-19 halted most human traffic and grounded fleets worldwide. Because passenger jets also carry cargo – typically high-value goods that justify increased air shipping costs – the result was a dramatic drop in available capacity for urgent shipments.
“In the pre-COVID-19 environment, 70 per cent of our cargo was travelling in the bellies of passenger aircraft,” said Craig Bradbrook, vice-president of aviation services at the Greater Toronto Airports Authority (GTAA), which runs Pearson International Airport. “The airlines have scrambled to look at ways in which they can continue to move cargo.”
In a bid to replace some of that lost capacity and a small fraction of the revenue they’ve lost as a result of COVID-19 travel bans, airlines began flying cargo-only flights. At first, some airlines strapped boxes onto seats in passenger compartments. But Air Canada quickly realized this approach risked damaging the pricey video entertainment systems on seat backs. Moving cargo in passenger cabins is also slow and cumbersome.
The airline’s maintenance chief, Richard Steer, suggested removing the seats and stuffing cargo into the cabin. Canada’s aviation regulator, Transport Canada, responded encouragingly to the proposal. Air Canada partnered with Avianor, a firm that specializes in commercial jet cabins, to convert the 777s at Montréal-Mirabel International Airport.
Late last month, Jazz Airlines (which operates as Air Canada Express) announced plans to convert up to 13 of its Dash 8-400 aircraft using a “simplified package freighter” kit provided by the manufacturer, De Havilland Canada. De Havilland is in the process of introducing kits for earlier Dash 8 models.
Todd Young, De Havilland’s chief operating officer, said his company already had a program in the works to convert Dash 8s into dedicated freighters. After COVID-19 struck, the company realized it needed a more immediate solution.
“We wanted to keep our airplanes flying,” he said. “We wanted our customers to have options, to be able to perform a different mission than transporting personnel or passengers from point to point.”
Since announcing the conversion kits with Jazz, five international customers have placed their own orders, Mr. Young said.
Passenger airliners were routinely converted for cargo service before the pandemic; manufacturers such as Boeing, as well as third parties, have been doing brisk business in recent years. But proper conversions are a one-way trip, typically reserved for mid-life jets. Seats, overhead bins and “monuments” such as areas designated for flight attendants and catering are removed. A new, larger door is cut. Floors are reinforced, windows are plugged, and cargo handling systems and fire suppression equipment are installed. Afterward, a converted plane can be expected to haul cargo for 15 years or more.
Such changes permanently alter an aircraft’s balance and weight; it can take years to satisfy regulators that a given conversion process produces jets that are safe to fly.
They’re also costly. Mr. McDonald said the price for a 737-400 can be up to US$3-million. For wide-body aircraft such as 767s, it’s about US$14-million.
These COVID-19 conversions are rapid and inexpensive by comparison. Air Canada’s 777s, for instance, are far too young to be candidates for permanent conversion. “It’s very much a temporary role change for the aircraft,” Mr. McDonald said. “There’s obviously very good intentions, it’s humanitarian, it’s doing your bit to fight this bloody coronavirus, and it provides utilization for aircraft, which would otherwise just be sitting.”
The limited nature of the changes also helps comfort regulators. De Havilland’s conversion kits, for instance, couldn’t be more straightforward. Operators remove the seats and install tie-down fittings to hold 17 nets for securing cargo inside the passenger compartment. Aircraft can be converted overnight, Mr. Young said.
To facilitate regulatory approval, Air Canada sought a much lower maximum cargo weight than a 777 is capable of carrying – no great sacrifice, because PPE doesn’t weigh much. The aircraft’s lock system for seats is compatible with hardware for securing nets, further simplifying matters.
“We made it as simple to approve as you could possibly make it,” said Mr. Strauss, who praised Transport Canada’s rapid accommodation.
Mr. Strauss said Air Canada would like to convert some 787s as well, but those aircraft feature different seat locking mechanisms. “That would have taken a whole different certification process and much, much longer time,” he said. “Who knows if you’d even have it done this year?”
Airlines and regulators aren’t the only party forced to adapt to these unusual hybrid aircraft. Ground handlers must also figure out how to work with them.
“It’s still a passenger aircraft in terms of design,” Mr. Bradbrook said. “The door apertures are for passengers. They were never designed to take bulk cargo. So we’ve had to work with airlines and ground handlers to look at new processes for loading and unloading cargo piece by piece.” GTAA has provided mobile roller beds to handlers, and some airlines are using catering trucks to load cargo onto the main deck.
Gradually, efficiency is improving. Air Canada’s first loading in Shanghai late last month took five hours, but with optimization and experience that was quickly compressed to one hour and 15 minutes – all while maintaining physical distancing.
But temporarily converted planes will never be as efficient or inexpensive to operate as dedicated freighters. They introduce new costs: Crew members are required in cabins on temporarily converted Dash 8s to monitor packages and react in the event of fire, for example. And they’ll never replace passengers, which Mr. Strauss said usually brings in at least five times as much revenue a kilogram as cargo does.
Moreover, routes typically enjoy two-way traffic. Yet during COVID-19, cargo often moves in only one direction, for example from China to Canada.
All that helps explain today’s sky-high air cargo rates. Mr. Bradbrook said he’d heard they’d tripled. “The rates are high,” Mr. Strauss said. “I’ve never seen anything quite like it.”
Asked how many more temporary conversions will take place during COVID-19, Mr. McDonald said he couldn’t hazard a guess.
“In order to make a reliable forecast, sometimes you need past data to gauge trends and habits. This is such a new phenomenon that you can’t gauge to what extent people are going to do this. It’s still very early days.”
MONTREAL — Nearly 700 workers are to be laid off in Quebec by two of the province’s main aerospace companies, Airbus Canada Limited Partnership and Pratt & Whitney Canada.
Half of the employees will be laid off Monday for an undetermined period of time in Mirabel, where the A220, the former Bombardier C Series, commercial aircraft is assembled.
Airbus Canada spokeswoman Marcella Cortellazi says the layoffs will last until it has “a clearer visibility” of its activities.
Engine manufacturer Pratt says it will cut more than 343 jobs on May 22 when its order book is reduced due to the airline industry being hit hard by the COVID-19 pandemic.
The Quebec government is allowing manufacturing companies to restart their operations on May 11, but restrictions on the number of employees that can work won’t be lifted until May 25.
Concerned about not being eligible for the federal emergency wage subsidy, Airbus says it will nevertheless pay $847, less applicable deductions, to more than 470 of its workers next week while awaiting their return on May 11.
This report by The Canadian Press was first published May 1, 2020.
A passenger aircraft operated by Air Baltic Corp AS stands at a passenger boarding gate at Munich airport in Munich, Germany, on Tuesday, Jan. 29, 2019. Deutsche Lufthansa AG has decided to speed up growth at Munich and develop it into a hub with a focus on Asia. Photographer: Michaela Handrek-Rehle/Bloomberg , Bloomberg
(Bloomberg) — Airlines are doing everything they can to scrap or delay jetliner deliveries amid an unprecedented collapse in air travel. Not Air Baltic Corp.
The East European carrier has started talks with Airbus SE to accelerate handovers of its A220 model, Chief Executive Officer Martin Gauss said in an interview. The existing plan to assemble a fleet of 50 of the narrow-body jets by 2025 could come to fruition a couple of years early, he said.
Air Baltic is among a handful of carriers pledging to lean into the coronavirus crisis that’s handed the aviation industry its biggest demand slump ever. The rebound could offer a chance to win market share, Gauss said, adding that one potential step could be geographical expansion in the neighboring Nordics.
While Air Baltic, like others, has had to temporarily ground its fleet, the carrier has been blessed by good timing. It had already decided to permanently ground some older aircraft when the coronavirus hit, and was able to bring those plans forward. It’s also standardizing on the A220, a model smaller and cheaper to operate than other single-aisles like Airbus’s A320 or Boeing Co.’s 737 Max.
Gauss predicts the A220 will be ideally suited to the tougher travel market, favoring efficiency and flexibility over size, that emerges from the coronavirus pandemic.
“I always said that come the next crisis we wouldn’t be left with an aircraft that was too big,” Gauss said by phone. “Would you rather have 145 seats like the A220 or 186 on a larger narrow-body? The answer is obvious.”
Air Baltic plans to resume flying on May 14, a day after Latvia’s travel lockdown is due to end, initially serving 12 routes from Riga — though the resumption could be pushed back a week at a time. (Industry executives say they expect low occupancy levels to persist for months.) The network, with secondary hubs in Tallinn, Estonia, and Vilnius, Lithuania, should feature 60 routes by year-end, down from 80 served by the original fleet.
Air Baltic is the third-biggest operator of the A220, formerly the Bombardier Inc. C Series, with 22 currently in the fleet. After the Covid-19 outbreak reached Europe, the airline stood down four 737s and 12 turboprops earlier than it had planned.
The carrier is slated to get four A220s in 2020, though the first due next month will be delayed with Airbus’s Canadian production line closed, Gauss said. Talks with Airbus include scenarios for accelerating future handovers, while adjusting the schedule in the near term, he said.
“We’re always in discussions with customers regarding their fleet, those discussions are confidential,” an Airbus spokesman said.
The carrier has 30 more options for A220s that it could convert to expand its business, most likely to the Nordic region, though Gauss said that’s not currently on the agenda. Norway’s Braathens Regional Airlines became a casualty of the virus this month, applying for a court restructuring. Discounter Norwegian Air Shuttle ASA is also hanging by a thread, with a pivotal debt-to-equity swap plan being studied by creditors.
While Airbus and Boeing have both suffered cancellations and delivery postponements, some carriers have continued adding planes to their fleet, with a few discount operators seeking to move up in the Airbus queue.
Wizz Air Holdings Plc, Europe’s third-biggest discount carrier, said this month it will take delivery of hundreds of new jetliners as planned despite idling 90% of capacity in response to the virus, including all 15 Airbus planes due this year. Chief Executive Officer Jozsef Varadi plans to position for a post-virus rebound and seize on expansion opportunities as rivals teeter.
State-owned Vietnam Airlines will also seek to accelerate jet deliveries, according to a local report.
BC-Prolonged-Flight-Ban-Could-Cut-Aircraft-Sales-by-About-10000 , Richard Weiss
(Bloomberg) — Demand for new aircraft could drop by almost one-half in the event the coronavirus forces airlines to keep much of their fleets grounded for six months, according to a report by Roland Berger.
In Roland Berger’s so-called “recession” scenario, airlines will likely need about 10,000 fewer new aircraft through 2030 than would have been the case without the pandemic, it said in a report on Wednesday. The best case is a “rebound,” whereby fleets are grounded for two months, and just 790 fewer aircraft are delivered.
The consultancy firm’s worst-case estimate is a grim prospect for investors in Boeing Co. and Airbus SE, which has seen factories making some of its best-selling models slow down from record rates. Planemakers are now pondering how to best handle the unprecedented production cuts. Airbus warned last month it wouldn’t achieve its earnings goals this year, and Deutsche Lufthansa AG yesterday became the first major airline to slash its fleet.
Roland Berger outlined a mid-way “delayed curve” scenario persisting for four months, where 5,920 fewer planes are needed. The speed of recovery in the air-traffic market underpinned the consultancy firm’s different scenarios. In the recession case, the market only recovers 80% of its strength by 2022, compared with a full recovery by the end of this year in the most optimistic situation.
Story Link: Groundings Could Cut Demand for New Aircraft in Half: Consultant
Air Transat (TS, Montréal Trudeau) retired all three of its remaining A310-300(ET)s at the end of March.
The type’s last revenue flight was operated on March 30, when C-GSAT (msn 600) flew from Porto via Halifax to Toronto Pearson. The aircraft subsequently joined the other two A310s, C-GPAT (msn 597) and C-GTSY (msn 447), in storage at Montréal Mirabel.
The airline has since confirmed in a statement to ch-aviation that the A310-300s have indeed been permanently withdrawn from service and will not be reactivated after the COVID-19 pandemic.
Air Transat was planning to retire the A310s over the coming months as its new A321-200neo(LR)s deliver from Airbus (AIB, Toulouse Blagnac).
A sad sight! Here we have the 4th Air Transat A310 to be retired, here she is departing Montreal for the very last time on a short ferry flight to Mirabel where she will be scrapped! Air Transat is the last North American airline to still operate the A310 commercially but that will change by the end of the year.
Active (As of Jan 2020) C-GPAT, C-GSAT, C-GTSY, C-GTSW
They have said that they will retire there entire fleet by the end of 2020, so you better catch them while you can! History of C-GTSH: Built in 1991, and delivered to Lufthansa in 1992 before being sold to Air Transat in 2004. This aircraft is 28 years old and has 2 x GE CF6-80C2A2.
ALLISON LAMPERT, MONTREAL, REUTERS – FEBRUARY 20, 2020
Airbus SE plans to invest between 500 million euros and 1 billion euros (C$715-million and C$1.43-billion) this year on its A220 passenger jet program, chief executive Guillaume Faury said on Thursday at the company’s A220 factory in Mirabel, just outside Montreal.
Earlier in February, Airbus raised its stake in the A220 program – known as Airbus Canada – to 75 per cent from 50.1 per cent after teaming up with the government of the Canadian province of Quebec to buy Bombardier’s 33.5 per cent stake.
With the deal, Bombardier exited the civil aviation industry and bolstered the European planemaker’s position in its ongoing competition with U.S. rival Boeing Co.
The A220, previously known as the C Series, is a 110-130 seater aircraft, a little smaller than Airbus’s mainstay A320 jet.
Airbus has been ramping up production of the A220 towards its maximum monthly capacity rate of 10 at its facility in Mirabel and to a monthly rate of four in Mobile, Ala., targets it hopes to reach by the middle of this decade.
Production in the United States has become more important for Airbus since the U.S. government slapped tariffs on jets made in Europe for purchase by U.S. airlines following a years-long tariff dispute.
Provided by Innovation, Science and Economic Development Canada/CNW
OTTAWA, Feb. 13, 2020 /CNW/ – The Honourable Navdeep Bains, Minister of Innovation, Science and Industry, made the following statement regarding Airbus’ increased stake in the A220 aircraft program.
“Our government has been steadfast in its support for the Canadian aerospace industry and its workers.
“We welcome any investment in Canada’s vibrant aerospace sector and its skilled workforce. Aerospace is one of the most innovative and export-driven industries in Canada, having contributed over $25 billion in GDP and more than 210,000 jobs to Canada’s economy in 2018.
“We have been in communication with Bombardier, the Government of Quebec and the CEO of Airbus, and we will continue to engage with all relevant parties to ensure that previous commitments are honoured. We also welcome the announcement of 3,300 jobs being secured in Quebec. This is a recognition of Canada’s world-class aerospace workers and demonstrates a commitment to supporting Canadian expertise and growing this important sector.”