Brazilian manufacturer Embraer has recently signed an order for 10 of their next generation E2 jets with Air Peace, Nigeria’s largest airline. Simple Flying predict that they’ll be selling a lot more of these stunning aircraft, nicknamed the Profit Hunters, to Africa in the future. Here’s why:
The African aviation marketplace is an interesting place right now. It has a wealth of potential and opportunity, but arguably an equal measure of challenges to overcome. Startups come and go, as they struggle to overcome the barriers to profitability, and despite demand for air travel increasing year on year, foreign carriers continue to dominate.
In terms of commercial aviation, Embraer has already got a strong foothold in Africa’s industry. Since the arrival of their very first aircraft, the EMB-110 Bandeirante to Nouvelle Air Affaires in 1978, they’ve sold more than 150 jets to some 50 African operators. Now, they’ve stepped up their game with the introduction of the second generation of E-Jets, the E2 Profit Hunters.
What’s good about the E2 Profit Hunter?
The E2 profit hunter jets come in a variety of flavors. The first to be launched was the E190-E2, which has the accolade of having the highest wing aspect ratio of any airliner. It uses fly-by-wire technology instead of the open loop used in the E1. It’s got a range of 2,850nmi and seats 106 passengers in an all economy configuration, or 97 in three classes.
The E195-E2 stretches the fuselage by three rows, giving 132 seats in an all economy layout or 120 in a three class configuration. The range extends to 2,655nmi and it can land at airports with runways as short as 1,375m.
#Embraer #E195E2 revealed! The livery of our newest #E2 reflects its high-tech features and E-enabled systems that make it the mighty king of #ProfitHunters. #EmbraerStories pic.twitter.com/ztqDrPzdLw
— Embraer (@embraer) June 7, 2019
The final aircraft in the family is the E175-E2, which seats around 80 – 90 passengers. It is still under development, but is looking to take its first flight in November this year, with an entry into service earmarked for 2021. When certified, it is expected to be allocated a range of 2,017nmi.
According to Embraer, the E2 family offer ‘double digit’ percentage reductions in both fuel burn and maintenance costs compared to their predecessors. During flight, new technology enables pilots to see real time data on their flight, and built in analytics keep the aircraft flying at optimum efficiency.
For passengers, they promise wide body comfort and an unprecedented level of personal space. But, with other aircraft vying for space in the small jet market, including Boeing’s bestselling (and currently grounded) 737 MAX, what makes the E2 such a great choice for African airlines?
Africa needs new planes
Africa’s aviation market accounts for just 2.2% of the global market in terms of passenger kilometers. Although this is a relatively small number, it’s set to grow exponentially. African airlines are currently struggling with aging aircraft, with an average fleet age of 13 years making them the oldest in the world.
Boeing’s latest Market Outlook predicted that 1,190 new planes would be needed in the continent, with an expected order value of $170bn, within the next 20 years. Boeing predicted that the bulk of these orders would be single aisle jetliners, such as the 737 MAX, with only 40 predicted to be regional jets.
Airbus’s Market Outlook, similarly, predicted Africa to have the biggest growth in commercial air traffic in the coming decade. They estimated Africa would need 1,130 new passenger and freighter aircraft by 2037. Interestingly, however, Airbus predicted that the majority of the aircraft to join African fleets over the next 20 years would be smaller, regional jets.
Although some airlines will undoubtedly want to target long haul operations with larger aircraft, the E2 certainly has a place in the future fleet strategy. Let’s find out why.
African airlines love smaller planes
Looking at the fleets currently in operation in Africa, it’s clear to see that smaller, regional jets play an important role in the network.
For example, Air Algerie have 12 ATR 72-500s and three 72-600s in their fleet, whereas Libyan Airlines have two Bombardier CRJ900LRs. More than half of Arik Air’s fleet is made up of smaller Bombardier aircraft.
Royal Air Maroc, while heavy on the Boeing 737 in their fleet, have half a dozen ATR 72-600s as well as four Embraer E190s. Kenya Airways sports 15 Embraer 190ARs, the most prolific aircraft type in their fleet, and were reported by ATW as considering the E2 for their short haul operations last year.
Ethiopian, the largest carrier on the African continent, operates some larger aircraft including the Dreamliner and the A350-900. However, it might surprise you to learn that the most prolific aircraft in their fleet is the 70-80 seater Bombardier Dash 8 Q400, of which they have 23 and a further 10 on order.
The E2 strikes the perfect balance between range and capacity for airline operating on the African continent. As more routes open up and other regional jets age, we’re confident we’ll see more E2s taking up space in these fleets.
It solves the problem of undersold flights
Although passenger traffic in Africa is growing year on year, there’s a big problem with the load factor on many of the routes. IATA report that the load factor on the continent last year was 71%, which although an improvement over the previous year, is still pretty low compared to the rest of the world.
In the US, for example, the average load factor is 82.6%, and in Europe it’s 85%. Arjan Meijer, the Chief Commercial Officer of Embraer, commented on this in a recent press release,
“The market in Africa presents significant opportunities for airlines to deliver the connectivity that the whole continent needs. Aircraft however must be right-sized to develop those routes profitably; more than 90% of intra-African flights depart with fewer than 150 passengers onboard. And more than 70% of markets are served with less than one flight per day.”
With many airlines operating Airbus A320 family aircraft or Boeing 737s for intra African routes, there’s a clear inefficiency occurring. The once a day flight (or even less than once a day) which leaves with 30% of the seats empty is going to be costing that airline dearly.
Clearly, it’s better for them to operate an efficient 100 – 120 seater aircraft almost full than it would be to continue running flights on larger planes with unnecessary capacity. This could allow them to add frequency on the more popular routes, maximizing profits in the process.
The E2 is proven in underdeveloped areas
If we look at where the E2 has been ordered so far, a clear pattern begins to emerge. For the E195-E2, the biggest buyer to date has been Brazil’s Azul Airlines, who have 51 of the jets on order. KLM have ordered 15 for their regional subsidiary, and Binter Canarias have five on order.
The E190-E2 has an order book containing airlines such as Norway’s regional Wideroe, Switzerland’s Helvetic Airways and Tianjin in China. What do all these airlines have in common? They serve underdeveloped, regional destinations that require small aircraft to operate competently and efficiently.
Africa has a number of synergies with the types of locales in which these aircraft will operate. Although there are numerous well developed international airports on the continent, a large proportion of the population live well away from these locations. With on the ground infrastructure in Africa notoriously difficult, airlines will be looking for ways to feed passengers from remote locations into their hubs, for onward travel to other parts of the world.
Air Peace, Nigeria’s largest airline, has ordered 10 E195-E2 jets for their fleet from Embraer. They will become the first operator of E2 jets in Africa and have retained purchase rights for a further 20 of the planes.
As the largest airline in west Africa, Air Peace is clearly looking to tap into the underserved regions of the African market with this purchase. They clearly think that the E2 Profit Hunter is a great fit for African operations, and we at Simple Flying do too.
With the E2 directly competing with the popular A220 from Airbus, time will tell who will win over the African aviation industry to secure their share of the small jet market.