JetBlue Signs MOU for 60 A220s

 - July 11, 2018, 11:30 AM
JetBlue has signed an MDU for 60 Airbus A220-300s. (Photo: Airbus)

Shortly after the rebranding of the former Bombardier C Series to the Airbus A220, Airbus and JetBlue announced the first order under the C Series Aircraft Limited Partnership (CSALP) agreement between Airbus and Bombardier. Yesterday, JetBlue signed a memorandum of understanding for 60 firm orders for the A220-300 and converted 25 current orders for A320neos into orders for the A321neo.

The A220 comes in two sizes, the -100 and -300, and it serves the 100- to 150-seat market segment. With a primarily composite airframe, fly-by-wire flight controls, and Pratt & Whitney PW1500G geared turbofan engines with a bypass ratio of 12:1, the A220 “delivers 20 percent lower fuel burn per seat compared with previous generation aircraft,” according to Airbus.

The two A220 family members share 99 percent parts commonality and a single type rating for pilots, helping make operations simpler and more efficient.

Airbus estimates a market for about 6,000 single-aisle airliners, which includes the A220 and A320 families, during the next 20 years.

In a presentation on the replacement plan for its Embraer E190 fleet on July 11, JetBlue executive v-p and CFO Steve Priest explained why the airline is replacing E190s with the A220.

“We had to make a very, very difficult decision between two excellent next-generation aircraft,” he said. “While the E190 fleet is relatively young, it will require significant investment into the next decade to be economically viable for us through to its full useful life.

The A220 offered a more efficient alternative than the A320, he said, and it is able to fly high-frequency short missions and longer trips that include trans-continental flights across the U.S.

“We explored all the available commercial alternatives [and] the incremental margin and return versus the added capex and cash-exit costs,” he said. “We determined that the A220 family is the best fit for our version of the low-cost model and network strategy.”

JetBlue will begin taking deliveries of A220-300s in 2020, with final delivery of the 60-order fleet taking place in 2025. Thirty E190s owned by JetBlue will start leaving the fleet in 2020, followed by another 30 leased E190s in 2023.   

“In conjunction with our A220 order,” Priest said, “we've worked with Airbus to reshape our existing A320 family order book and ensure we have a fleet plan that supports the mid- to high single-digit growth rate for the foreseeable future. Some of the changes included shifting two A321neo aircraft from 2021 to 2020 and seven deliveries in 2021 and 2022 to 2024.”

In addition, JetBlue has secured options for another 60 A220s, with the right to convert some orders to A220-100s. “The optionality of the A220 family was an important part of our decision,” he explained. “The -300 and -100 have 99 percent commonality. This provides us flexibility in how we set capacity growth and the smaller-gauge aircraft could help us further grow our relevance and in our focus cities without adding significant complexity.”

According to JetBlue, the A220 offers 29 percent lower direct operating costs per seat compared to the E190, with fuel costs 40 percent lower and non-fuel costs 22 percent lower.

“We expect the flexibility of the A220 to allow us to sustain our mid to high single-digit growth rates into the 2020a while improving unit cost, margin, and returns,” Priest said.