Named "Jalan Jalan" and "Travel Kaki", which means "take a walk" and "travel buddy", respectively in Malay, Scoot's third and fourth Embraer E190-E2 aircraft, like its predecessors, aim to make flying to one's destinations as casual and convenient as its namesakes.
This will be achievable through a low trip cost and a low seat cost, says Adam Young, Embraer's vice-president of marketing Asia-Pacific (APAC).
Young says the E2 burns less fuel thanks to weight-saving attained through new technologies in engine design and aerodynamic improvements.
The Brazilian manufacturer has also been able to take the aircraft's capacity to nearly 150 seats, equating to a similar seat cost of a larger, narrow-body aircraft.
Young explains: "If I put names out there, that would be like an Airbus A320 Neo or a Boeing 737 Max, those are aircraft that have 186 or so seats. So, we can compete on seat costs but offer 25% lower trip costs. What does that mean? The operator doesn't have any impact. From a revenue management perspective, they can keep the same ticket prices and use the same fair pricing strategy. But for every flight they make, they can realise a 25% cost."
While commercial aviation was formerly subscribed to what he calls the “bigger is better” trend as seen in the popularity of Airbus’s peak production of the double-deck A380 between 2012 and 2014, the industry has since seen value in smaller wide-body aircraft as well due to the flexibility of trip costs.
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"Generally speaking, a larger aircraft has lower seat costs, while a smaller aircraft has a lower trip cost. Our E2 family cuts right down the middle of that, so the challenge has been to create awareness around that narrative for airlines," says Young.
The plane from Ipanema
Singapore’s low-cost carrier, Scoot, is one such operator to have noticed the advantages held by the 100% Brazil-manufactured E190-E2.
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The first of nine E2s ordered by the airline landed on the tarmac of Singapore Changi Airport earlier this year on April 15, with the complete fleet due to be handed over by end-2025.
Notably, the aircraft are being leased from American aircraft leasing firm Azorra.
In an interview with The Edge Singapore in May, Scoot CEO Leslie Thng highlighted that leasing was the "most ideal" financial model as it provided the airline with more flexibility without the high upfront costs associated with purchasing.
“We also streamlined maintenance costs through our technical partnership with Embraer to ensure operational resilience. For instance, we have recently signed a contract for the Embraer Collaborative Inventory Planning (ECIP), a tailored expendable spare parts inventory management programme designed to reduce operational costs by optimising inventory levels,” says Thng.
The CEO adds that Embraer's fleet is meant to complement Scoot's existing duopoly of Airbus and Boeing, and not a replacement.
He says: "The Embraer E190-E2 is not an entirely new aircraft, having been in the market for a couple of years, which has allowed us to study its operating statistics. After careful evaluation, we decided that theE190-E2 is a suitable aircraft for Scoot in terms of what it can deliver on the operational resilience and reliability fronts, which will enable Scoot to enhance our network in the region further."
Scoot's fleet of four E2s currently covers 13 destinations across Southeast Asia (SEA).
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Of these 13, most are tertiary cities, or tourist or commercial hubs that are not capital cities in their respective countries.
Embraer's Young understands that this desire among SEA passengers for greater connectivity between secondary or tertiary cities without having to transit between capital cities was a trend born from the pandemic.
He explains: "Covid-19 sort of changed everyone's view on demand, and just how robust demand can be at times. Having that flexibility of a smaller aircraft allows you to enter or sustain markets through varying conditions."
"If you go back several years to 2015–2016, across the six or seven major metro cities in Southeast Asia, intra-Asean traffic, say, between Kuala Lumpur, Manila or Bangkok, would account for around 70% of all travel between those cities. That number has come down by some seven to eight percentage points over the past six years," adds Young.
Tertiary cities are also home to newly built or smaller airports, with infrastructure not suited to taking on massive throngs of passengers coming off bigger planes.
The E2, Young says, can tap into this nascent demand immediately without waiting for passenger volume to reach the stage required for a narrowbody-friendly situation.
He says: "We're never going to replace those big narrow bodies. They have their place, and they are specialists in the market once you get to that 180 to 200-plus passenger segment. We know that, and that's why we have invested our time, effort and callbacks in developing the most optimised aircraft in the segment, up to 150 seats because that's where we can compete."
Currently, Young says that Embraer is the market leader in commercial aircraft of up to 150 seats, maintaining around a 30% market share.
"We're starting to get the orders. We're starting to get recognition from not only customers in the region but also from the market."
"Our backlog is the highest it's been in seven years, and our stock price has been at its highest since 2016. But what's most importantly reflected in the broader market are from the rating agencies, S&P, Fitch, Moody's; they all have a positive outlook," continues Young.
Indeed, as recently as Sept 9, Embraer's share price on the New York Stock Exchange reached a five-year high of US$36.95 ($47.73), giving it a market cap of US$6.36 billion.
He concludes: "I think when you triangulate all these points. Embraer is on an ascending trajectory. Embraer is in the region to stay and is ready to compete from a position of competence and strength."
