Flybe’s purchase of Embraer regional jets was its first move away from turboprops. Although it wasn’t the only factor in the death of the airline, it was thought to be a contributing factor. Now, another UK regional airline, Loganair, is pinning its future strategy on the very same jets. Will it suffer the same fate as a result?
Flybe’s Embraer issue
It was the summer of 2010 when UK regional airline Flybe first moved away from its tried and tested model of turboprop operations. It placed a stunning $1.3bn order with Brazilian firm Embraer for 35 ERJ 175 aircraft. At the time, the carrier was mooting a move from turboprops to jets, potentially allowing for longer routes and a more comfortable passenger experience.
However, the decision was not a good one. For Flybe, the ERJs were not as efficient on shorter routes as the Q400s. The order was an expensive commitment, and the airline was struggling to pay for its jets. By 2014, only 11 of the 35 had been delivered, and Flybe announced it would be removing 20 from the order books.
At the time of its collapse, four ERJ 175s had still not been delivered. While many factors were at play in the demise of Flybe, not least the unwillingness of government and shareholders to bail it out, the foray into Brazilian jets proved to be a costly mistake.
History repeating itself?
Although the blame for the failure of Flybe cannot rest solely at the door of the Embraer jet, the airline’s move away from turboprops is considered to be a contributing factor to its eventual collapse. Now, a second UK regional airline, Loganair, is switching to a more jet-heavy fleet. Will the same fate befall this operator?
In a recent interview for Anna Aero, CEO of Loganair, Jonathan Hinkles, spoke at length about his fleet strategy. He said,
“We have seven ATRs in the fleet as of today, and the plan very much is, over the course of the next two to three years, to complete the renewal of our fleet with the SAAB 340 aircraft. We’ve already phased out the Dornier 328s and SAAB 2000s. We’ve brought the ATRs in.
“Those will progressively replace the SAAB 340s in our fleet, and by the end of probably 2022, beginning of 2023, we’ll be expecting to operate a fleet of Embraer jets, ATR turboprops and of course the Twin Otters and the Islander aircraft we have in our fleet for the special missions.”
Loganair has 17 Embraer jets in its fleet, 13 of which are the ERJ-145 and four ERJ-135s. All but one were delivered in 2019, but the airline has no plans to phase them out in the face of the COVID crisis. Hinkles said,
“The plan is to focus around two big aircraft types in our world (well, big aircraft to us) of the Embraer jets and the mix of ATR 42 and 72. So that’s where we’re headed.”
Can the Embraer jets work in the UK regional market?
Taking into consideration the impact the jet had on Flybe, it could be questionable whether the ERJs really have a place in the regional market. They have higher seat costs than the turboprops, albeit with a lower cost of ownership, so will they work? Hinkles thinks so, saying,
“I think they can, provided you’re careful with it. They do not suit every market, patently they don’t. The yield environment in certain markets won’t support those airplanes, but in others it will.”
Clearly, the CEO believes that choosing the right plane for the right market is key to success. He explained,
“I think it’s a question of picking your route. The Embraer, from a maintenance point of view, is very cost effective. While fuel costs are low and have got the prospect of remaining low over the next few years, particularly in light of what we’ve just been through, then fuel cost has really been the main issue that’s derailed previous Embraer operators.”
The cost of jet fuel has plummeted, as demand has slumped during the COVID crisis. Hinkles thinks there’s little risk of it heading back up to previous levels any time soon.
“There’s no sign of it heading back there, so certainly for the foreseeable future we believe there are ample opportunities to make the Embraers work within the types of routes that were aiming to fly.”
Do you think the ERJs are a good strategy for Loganair, or will they spell trouble for this UK regional carrier? Let us know in the comments.
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