Republic’s Bryan Bedford emulates U-Turn Al
The CEO of Republic Airways Holdings seems to be vying to be America’s version of U-Turn Al, Akbar Al-Baker, the CEO of Qatar Airways.
Bedford appears to be engaged in a campaign to raise questions about the Bombardier CSeries, for which he has orders and options for 80 CS300s, much the same way U-Turn Al alternatively praises then complains about the Airbus A350, Boeing 747-8F (ordered by Cargolux, in which Qatar owns a third) and the Boeing 787. U-Turn Al has also alternative praised, condemned then praised the Airbus A320neo, Bombardier CSeries and the Pratt & Whitney GTF.
Keeping up with U-Turn Al’s about-faces has been a dizzying prospect.
Bedford praised the CSeries when ordering it but has become increasingly skeptical of the program once he ordered the A319neo (with CFM LEAP engines) in what was a financial bailout of his ailing company being dragged down by Frontier Airlines. The Airbus order raised questions whether Bedford would cancel the CSeries since the A319neo competes with the CS300. Bedford initially said the order would stand. More recently, he appears to be doing everything to cast a shadow over the program.
In the March 12 print edition of Aviation Week, Bedford expanded on comments he made during the recent earnings call, comparing the CSeries to the Boeing 717. Boeing inherited this program after merging with the dying McDonnell Douglas Corp., which launched the airplane as the MD-95.
The comparison is misplaced. Here’s why.
- The MD-95 was an orphan, available in only one version. The CSeries is available in two versions, the CS100 and the CS300. BBD has announced firm orders for 69 CS100s and 89 CS300s, with options for 159 more. Boeing discontinued the MD-95/717 after 156 sales.
- The MD-11 was already on its last legs when MDC introduced the MD-95, further isolating the MD-95 and marginalizing MDC as a viable commercial aircraft manfacturer.
- Boeing never was truly committed to the MD-95. AirTran asked Boeing to develop a larger, longer range version of the airplane to allow Atlanta-West Coast flights. Boeing refused, preferring to sell AirTran the 737-700. This doomed the MD-95.
- The CSeries LR not only has two-thirds trans-continental range of other CS versions, it has a range of 2,950nm–enough for US trans-con. Virgin America noted that the CSeries could perform all missions contemplated but in the end VA stayed with the Airbus family already in its fleet.
- While Bedford and others point to “slow” sales of the CSeries, if you actually compare apples-to-apples (i.e, only the 100-149 seat market segment), CSeries sales have held up very well against Boeing and Airbus 737-700s and A319s. CSeries pre-EIS sales also are similar to the pre-EIS sales of the Embraer E-Jet, the original clean-sheet airplane in the 100-125 seat segment. Sales of the E-Jet ticked along at about the same pace as the CSeries and spikes within one year of EIS. For CSeries, this countdown begins around the end of this year.
The following charts show sales of the CSeries last year.
This chart includes orders for 20 737-700s from lessor Aviation Capital and 40 from Southwest; there were 64 737-700 orders recorded in 2011. However, ACG always orders the least expensive -700, allowing it to put down small initial deposits. ACG later converts the orders to the large, more expensive -800. Likewise, Southwest is now converting its -700 orders to -800s, so these 40 are likely to disappear.
Nonetheless, BBD orders held up quite well in the 100-149 segment. The perception issue BBD has is that pontificators and critics compare the CS100/300 sales with the entire family line of Airbus and Boeing single aisle airplanes–a truly apples-to-oranges comparison.
With the certainty that ACG will swap its -700s for -800s at a later date, per its history, but retaining the Southwest orders, the sales performance last year looks like the following chart.
Thus, we see CSeries is slightly behind the 737-700′s 44 orders (CSeries had 43) and well ahead of the A319.
But even this isn’t the whole story. When considering sales performance in the 100-149 seat market segment, none of the pontificators consider Embraer, whose sales last year of the 100-seat E-190 and 122-seat E-195 were by far and away the market leader.
Embraer sales of this mature product today “owns” the 100-149 segment.
As noted, E-Jet sales showed a similar number to BBD in the run-up to one year from EIS. The proof for BBD will be how sales shape up beginning late in the fourth quarter.
Our final chart shows how well EMB has done in the 100-149 seat market since the E-190/195 was launched in 2003. Note that EMB has done very well, and it only competes up to 122 seats in Y-class configuration.