Why the new Airbus A220 is popular with airlines during the coronavirus pandemic
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 May 7. "The economics of this aircraft are spectacular."
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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 May 5, 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 May 4, the data shows. This is a higher percentage than for either the A320 family, 737 family or Embraer E-Jet family.
Related: JetBlue accelerates Airbus A220 deliveries over next two years
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"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.
Related: Delta still flying all of its A220s even as the coronavirus grounds more than half its fleet
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 travelers.
"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.
Related: Why I'm a fan of Delta's Airbus A220
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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.
Related: US airlines could retire older aircraft, focus on newer models due to coronavirus downturn
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 May 7. 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.
Related: American Airlines won't fly an Airbus A330 again for at least two years
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 April 29.
"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 airplanes [be] ordered."
Related: Alaska Airlines is leaning towards an all-Boeing 737 fleet after the coronavirus