Virgin flags doubling its fleet of Embraer regional jets
A report by Steve Creedy in The Australian says that Virgin Blue could double its fleet of Embraer jets if the first 20 aircraft prove as successful as management expects.
The airline has firm orders for 20 Embraer E-170 and E-190 regional jets but has revealed it still has options on three planes and purchase rights on 17 more.
Although purchase rights are less secure than options, Virgin Blue CEO Brett Godfrey does not believe the airline will have trouble securing production slots if it decides to expand its fleet.
“As the first operator in the region we’ve got a pretty preferential deal,” Mr Godfrey told The Australian.
The airline took delivery of its first Embraer jet, a 78-seat E170, this week and will get two more before the end of the year. Three 104-seat E-190 jets will arrive at the beginning of next year with the remaining planes – three more 170s and 11 190s – arriving at a rate of about one a month until early 2009.
The airline is taking a “suck it and see” approach to the new fleet but believes it will allow it to make money on the 10 per cent of routes it currently flies at a loss as well as develop new routes that are presently uncontested.
It will use the new planes for extra flexibility on existing routes by allowing it to move to smaller aircraft at quiet times of the day and replace the bigger Boeing 737s on loss-making routes.
Mr Godfrey said an E-190 flying a market which filled 61-62 per cent of the seats on a 737 would fill 82 per cent of its seats. “And I can assure you that becomes profitable overnight,” he said. “Even better, we get to redeploy that asset (the 737) to a higher-yielding, profitable market that we fly today where we just don’t have enough capacity.”
The new planes are expected to enter service in October but will not be deployed on new routes until February to allow Virgin time to get used to operating them. Virgin has yet to confirm the routes it will serve but Canberra, where it has just opened a new lounge, is likely to be among the first. It also confirmed it would target Qantaslink routes to regional centres that use the Q400 turboprop.
The Brisbane-based carrier has opted to install fewer seats than recommended by Embraer to allow it to offer a 32-inch seat pitch along with a wider seat, a two-by-two seating configuration and the ability to dock at aerobridges. It believes these factors and people’s preferences to fly in jets will make the Embraers more attractive than Qantas’s turboprops.
“It’s a new product but what people have got to understand is it’s not a regional product, it’s not a short-haul product,” Mr Godfrey said. “It’s a legitimate, real aeroplane that has real aeroplane economics and aeroplane comfort.”
However, the airline did not rule out using the new aircraft in its proposed ultra low-cost carrier, saying that both the Embraers and new 737s would have a flexible configuration that allowed higher seating density.
Steve Creedy visited Brazil as a guest of Virgin Blue and Embraer
Report by The Mole
John Alwyn-Jones
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