Air Canada opts to keep remaining E190s

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Air Canada has opted to keep the 25 remaining Embraer 190s in its fleet rather than purchase a new aircraft type to replace them, executives say during a 15 May earnings call.

After a “very comprehensive analyisis”, the airline decided to continue to operate the regional jets as part of Air Canada’s mainline fleet, says the airline’s chief financial officer Michael Rousseau.

“The primary reason is, given other priorities, we did not want to further increase capital expenditures, nor debt levels,” he says. Regulatory filings show that the airline is planning for C$1.01 billion ($930 million) in 2014 expenditures, which will grow to just over C$2 billion in 2017.

Air Canada decided to shed 20 of the 45 E190s in its fleet in December, when Boeing agreed to purchase them as part of a deal to buy 33 firm Boeing 737 Max with 18 options. The regional jets will be replaced with 10 larger leased narrowbody aircraft upon their exit in 2015 until the Max starts arriving in 2017, says Rousseau.

In the past few months, the carrier has considered phasing out the E190s entirely in favour of purchasing a new aircraft between 100 and 150 seats. Chief executive Calin Rovinescu told Airline Business in late March that all four aircraft manufacturers were in the running for possible replacements. The carrier had noted in the past that Bombardier’s CSeries was one possible option.

In its analysis, the airline also considered factors like the aircraft’s young age, their productivity and customers’ acceptance of those aircraft on certain routes, says Rousseau. The 97-seat E-190 fleet averages just over six years old, data from Flightglobal’s Ascend Online database shows.

Air Canada purchased the Embraers at a time of substantially lower fuel prices and has since opted to upgauge its aircraft, Rovinescu said in March when the carrier was still evaluating its options. The E190 is the smallest aircraft in Air Canada's mainline fleet.

“We still like the Embraer, it is important for some of our routes, but we found that as a result of our narrowbody campaign, we preferred to migrate from some of the smaller-gauge narrowbodies to larger-gauge narrowbodies,” he said.