Lufthansa Group and the A220
Bloomberg reported yesterday on the Lufthansa Group’s desire to acquire more A220s. According to the article, the aim is to simplify the fleet and reduce its operating costs. In order to better understand the needs of the group, I made a table of the fleet of aircraft with 70 to 150 passengers. I identified the different subsidiaries as well as the average age of the types of aircraft. I did not include SWISS, as the latter already has 30 A220s.
The first observation is the age of the A319s, in particular those of Brussel and Lufthansa. This aging of the A319 fleet comes as fuel prices rise. In addition, environmental pressures in Europe will intensify in the coming years. Lufthansa Group must therefore find a replacement solution. While the average age of Eurowings A319s is lower, they only have a few years left. With an order of 80 aircraft, it would be easy to deliver Eurowings ones last to be on time.
At first glance, the 26 E-190-195s appear relatively young with an average age of 10.8 years. But the reality is that this plane is aging very badly: Air Canada, American and JetBlue decided to retire the E-190s long before their average age reached 10 years. Even the Brazilian Azul has reduced its fleet of E-190s from 97 to 59. Of these, 20 are in storage and only 39 are in operation. The CF-34-10 engine ages very poorly and its fuel consumption increases dramatically with age. In the current context, it is to be expected that Lufthansa Groupe will choose to replace them.
The order
The Lufthansa Group order could therefore reach around 100 aircraft. It goes without saying that Airbus and Embraer will be in competition for the best price. Remember that the original C Series order that Lufthansa had put included options for 30 more. If he wanted, the client could only avail himself of it without having to negotiate anything. I conclude that the price set in this old agreement is therefore not suitable for Lufthansa.
It must be said that in the current context, an order for around a hundred aircraft offers strong reduction potential. No doubt Airbus and Embraer will make a very good offer there. But does Embraer have the backbone to play the lowest price Limbo? The European giant has additional leeway: Lufthansa still has 83 A320neo family aircraft on order. An additional discount on undelivered planes could make a huge difference.
I made a video explaining why the A220 is an exceptional aircraft. even if it is in French, I recommend that you activate YouTube translation. Click here
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