Flybe details economics behind Embraer 175 selection

London
Source:
This story is sourced from Pro
See more Pro news »

UK regional carrier Flybe has detailed its reasons for selecting the Embraer 175 for its future regional fleet, as it prepares to take delivery of the first example.

Flybe had originally sought a 70- to 100-seat turboprop to expand its operations but Bombardier - which supplied Flybe with its 53 Q400s - had not progressed with its proposed 90-seat Q400X.

While the carrier assessed the ATR -500 and -600 series to replace the Q400s, Flybe UK managing director Andrew Strong said the type was "too slow" to operate longer European routes to specific curfewed airports.

The ATR evaluation also ran up against the larger turboprop problem. Although ATR appears closer than Bombardier to developing such an aircraft the timeframe was beyond Flybe's limits.

Strong, speaking during an Embraer event in Palma de Mallorca, said Flybe was aware that a jet would cost "significantly more" to operate. "That was the major challenge," he said.

Bombardier's CSeries was "too big and too heavy" for European regional flying, added Strong, while the CRJ family was the "right size" and had "good economics" but a small cabin. Flybe did not want to introduce a third aircraft type, which also helped to rule out the Mitsubishi Regional Jet.

Flybe opted for the 88-seat Embraer 175 to maintain commonality with its 195 and bridge the capacity gap between the 195s and Q400s. Strong said the carrier analysed the aircraft price but also aimed for the same cost per trip as the Q400, pointing out that this was a "tall order" given that the 175s had 10 additional seats than the Q400s.

"We didn't want to over-spec the aircraft," he said, adding that Flybe secured fixed engine maintenance costs with General Electric in order to obtain the overall operating economics required.

"The negotiations with Embraer reconfirmed how good the Q400 economics are."

Even with a good airframe price and long-term maintenance agreement the Embraer 175 was still £200 ($320) per flight more expensive to operate than the Q400, said Strong, meaning that Flybe would need to sell three of the 10 additional seats simply to break even.

But he said the carrier's initial public offering and 85% funding support from Brazil's BNDES bank at "very competitive rates" meant the aircraft could be financed through ownership, rather than operating leases, at the same per-trip cost as the Q400 - assuming fuel at $90 per barrel. If fuel rises to $110, said Strong, only one of the 10 extra seats needs to be sold to match the Q400 economics.

Flybe is taking the first 20 of its 35 firm Embraer 175s as a package, and Strong said that "paperwork" had been holding up the deliveries, although the carrier still expects to receive the first before the end of this year.

Use of the 175 will also reduce the importance of speed in future turboprop selection, he added, because these aircraft would be "focused on the shorter sector length".