Sean Peever

Correct. Introducing a new plane to a fleet comes with inherent risks. While AC is “handling” the grounding of the 737max, there is an impact that it is having on the business and changes that AC has had to make to handle that grounding. The 737max was in the air for about 2 years with over 300 delivery’s before the grounding took place. While the A220 did get into the hands of the operators about a half year before the 737max there are still only 98 today in operation.

AC had about 24 max in operation and about 37 on order. They have about 45 A220’s on Oder. So we’re not talking a small number of planes here.

ps: these numbers are off the top of my head typing on an iPad, I’m sure someone will correct me with actual ones.

When you’re doing a RA you have to look at the possible risks, the chance of them happening, and the impact of the event.

Risk: Could a grounding of the A220 also happen due to unforeseen circumstances? Yes - it could. It’s a new plane and new planes can have issues. Is the chance of that happening high? No, I would not say it is not, I would say the chance is low. What’s the impact? The impact is that in a perfect storm situation AC could end up with over 100 grounded planes either in possession or on order.

Therefor is the risk of proceeding with the A220 at this time an acceptable risk, with the current 737max fleet being grounded, knowing in a worst-case scenario situation the airline will have over 100 planes grounded (on order or delivered) is that an acceptable risk to be taking? Or should the airline play the safe bet, delay the A220 and pick-up some extra older known airframes that we know are not going to get grounded?

When doing an RA, you need to look at “what if this happens” and so the question is - what if the A220 also runs into an issue and leaves AC SOL.

YZF_Elite

The 220 deliveries are very slow (only 7/8 in 2020 iirc). If the MAX doesn’t return to the air by summer 2020 I suspect AC will start to sweat it for the summer flying season. Rouge and delaying 320 retirements (and E190 retirements too I believe) can only cover things for so long. The 320s are going to run out of hours/cycles.

To answer your question, I don’t think the 220 introduction is in any way a mistake and a delay would have come at great cost anyway.

OhDoctor

I keep hearing repeatedly that Airbus is severely constrained in regards to production and will not be able to take as much advantage of the MAX scenario as they would otherwise.

YYT82

Sean Peever , the risk analysis also needs to account for the consequences and arrive at a quantifiable loss. In the event where both the 737 MAX and A220 are grounded for extended periods of time, what would the loss of revenue be with no mitigation? There should already be a figure for the MAX, but none identified yet for the A220. In addition, like you said, the likelihood of A220 being grounded is low, perhaps even ranked as rare. So the loss for the A220 grounding risk may be low enough that sticking with the current plan might be the correct decision (and I suspect that's the same decision AC senior management has arrived at). With the MAX, it's a matter of how much longer it is out for. The current equation realistically looks more like whether the capacity of existing A319/20/21 and E90 in the mainline fleet can be replaced in its entirety by the A220s and not cause logistical constraints. This summer and fall we have seen Rouge planes replacing many A319/321 routes, so this is a mitigation measure. I would say, based on the quarterly results, this mitigation worked, for now.

Should AC pick up some A320/21neo? That would be a sensible thing to do. However, getting them from an order placed now would not help with immediate needs due to the long backlog. Taking deliveries of the A220 while waiting for some smaller operators of the A320/21neo to get into financial difficulties and then snatch the assets up, that would be a business move I would make (WOW as an example, and yes I am aware those are ceos not neos).

For the next sets of risk analyses, AC should be counting the MAX out, and have plans on how to integrate them back into service (as well as how to get rid of them if public perception/avoidance kills the product). Financial engineering wise, I once shared an idea with 24left how this can be done.

codfather

I am interested in hearing this idea, that is if you are willing to share! DM me if you would rather send it there...

skybluesea

delete

cur

i don't understand the logic. so a failed version of a newer edition of a single aisle plane that is just based on adding and changing and modifying the original, which is what, 30 years old, means ac shouldn't buy a new, from scratch single aisle?

don't like it? fine. connect thru toronto instead.

don't like daily 3x iah-yyc on a cra? fine, we'll just do 1x M-F on a 37 for ya.

theBeachBoy

Count me in the group of people that will likely avoid the MAX when/if it returns. The way the company handles the issues doesn't give me any confidence on that plane.

If frequent flyers on this site (likely never feels unsafe in a plane) will be avoiding it... I can just extrapolate how many non-frequent flyers will avoid this aircraft for a long time.

That must be hard for AC to predict.

rstruthe

The A221 made its maiden voyage as the CS100 in 2013. While it is still new in comparison to a lot of models, its been in the air for over 6 years and has been certified for 4 years.
Even the A223 received its certification over 3 years ago.
I think its safe for A/C to bet on it with a safe 6 year history behind it!

Altaflyer

Just flew the C series or A221 on Swiss WAW-ZRH and it was a great flight with amazing views! The FA told me the views were amazing because they were restricted to about 27,000 feet due to the engine concerns mentioned upthread. I think lower altitude = greater fuel burn but I’m sure this is temporary. I have some flights on the Max in April on WS that I am NOT keen on!

cooleddie

I think AC should consider increasing their orders of the C-series. It will help with the thin and light routes as well as the strategy of making YYZ/YVR into North American hubs - e.g. if they want to feed US traffic into these centres for Asia and Europe.

YVR72

I think they should ramp up orders for A223 and they can increase frequency on some routes as they need to retire A320s.

They should also try to upgrade some Max order to 788s at some good savings.

Sure with the current product offerings models the A223/788s dont directly replace the MAX, but Air Canada can just be creative and innovative with the product.

Perhaps an all-signature class “sleeper” service A223 for some transcontinental routes like YVR, YYC, SFO, LAX to YYZ. And YVR to YUL and EWR. They could call them “Red-eye flights, without the red eyes”. They could have bedding prepared on the seats before boarding, provide cozy pyjamas, serve an immediate light snack and nightcap, then kill the lights with zero interruptions/announcements during the flights. Coffee and croissant before landing, and long-haul style of amenity kits.

And, depending on how many 788s they can negotiate at a deal, why not add 788s to the Transat and Rouge fleets to replace the 763s and A300/332s for some efficiency gains, or just to add new routes.

Even without service mods, there isn’t really a chasm of difference between the 788 and 7M8 missions is there?

AC7E7

Ordering additional new aircraft - whether it be A220s, A320NEOs, etc. - to cover a “short-term” lack of capacity due to the 737MAX groundings will not happen. An aircraft acquisition is a significant capital expenditure. These planes will be in service for the next 30 years while the MAX groundings will likely end sometime in 2020. Airlines plan their future routes and capacity very carefully and think long term. They know how many A220s they need over the next 10 years, what routes they will be flying on, and at what frequency. The costs associated with having too many frames than needed would be very high. This is why airlines are signing short term leases to cover current capacity needs, even if the lease rates are high.

Air Canada is likely way ahead of us in terms of fleet planning, and have contingency plans ready in case the MAX is not back in service in the next 6 months to a year.

The issue airlines are facing today is not HOW they will cover current capacity needs, but their inability to ADD additional capacity. In other words, the groundings are causing growth constraints for these businesses. If the groundings last into 2020Q4, than it is possible airlines might be forced to look elsewhere for capacity growth. What that may entail only they would know. However, I suspect the MAX will be flying before then.

The Lev

AC doesn't have much choice in the matter.

• They have a firm contract with Bombardier/Airbus for the A220's. It would be hard to get out of that, although they might be able to sell on the aircraft to another customer (although it is a lot of metal to shift) even if they wanted to.
• There aren't a lot of used A320's sitting around waiting to be picked up by AC. Given the MAX grounding, MAX operators have been scouring the planet for older aircraft to fill the gap.
• The Airbus A320 line is sold out for the next 4 or 5 years.

Even if they had a choice, as many others have pointed out, the A220 is an excellent product that has been in service for a number of years with reputable carriers including LX and DL. AC has managed new aircraft introductions to their fleet efficiently in the past and there is no reason to believe they won't do so this time around.

The likelihood of the A220 fleet suddenly being grounded is much lower than of the MAX staying grounded for an even longer period of time. The question becomes what does AC do as more of its 320's run out of hours.

The bigger issue is should AC have put its chips on the MAX. With the benefit of hindsight, I would say no; but they can at least thank their lucky stars that they had the foresight to also choose the C-Series/A220 and picked up some extra 321's and 330's while they could.

lsquare

Obviously I don't understand this topic as well as the experts here, but why didn't AC ordered more A220s and opted to invest in the Max? After all, it's already been reported that this is a 50 year old design...