Investment Guru Questions The Economics Of Electric 19-Seaters

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Virginia-based investment advisory company The Motley Fool (TMF) is recommending we don’t get too juiced up just yet on prospects for electric airliners. Citing United Airlines’ recent conditional (very conditional) commitments for Boom supersonic jets and a headline-grabbing 270-plane Boeing/Airbus order (which is also subject to complex conditions), the advisors warned investors not to get too excited about a similar agreement to buy 100 Heart Aerospace ES-19s, a developmental 19-seat electric airliner with a proposed range of 250 miles.

Conditions of the agreement include “once the aircraft meet United’s safety, business, and operating requirements.” TMF wrote, “Investors (and air travelers) shouldn’t expect these aircraft to be ready by their planned 2026 entry-into-service date. Moreover, they are unlikely to be commercially successful.” The agreement includes $35 million in seed money for Swedish-based Heart Aerospace, coming from United and its regional airline partner Mesa Airlines.

In addition to the obstacles of certifying lithium-ion batteries as safe and the almost certain delays in any certification process, TMF also notes the impending pilot shortage as an economic challenge for regional carriers. Once a low-paying entry-level pilot job, starting salaries for flying regional airliners could increase “dramatically” in the not-too-distant future, according to The Motley Fool. That would contribute to rendering a 180-knot 19-seat airliner “uneconomical,” they say.

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31 COMMENTS

  1. With the pricing model used by the airlines since deregulation, 19 seat airliners have never been profitable. Very few still in service in the US, and no manufacturer has plans to build any new ones. I don’t think United has any illusions about these 19 seat planes being profitable any more than the ones still flying. If United does then they deserve the eventual visit to bankruptcy again.

    • Could you define that? Seems to me plenty of Saab’s and Beeches and other planes with less than 20 seats are flying routes. Do you mean profitable for the manufacturer or the airline? Do you mean for the code share or the regional itself?

      • In the old days, integrated airline operations often lost money on feeder services in order to make money on the routes the small airplanes fed.

        Today the fad seems to be to sub-contract to a separate operator, in cases like Alaska/Horizon was a wholly owned subsidiary.

        Pilot union ‘scope’ clauses prevent integration thus an experience-building environment for pilots who will move up to large aircraft. Looking at the big picture is not a strong point of unions.

        • All scope clauses do is limit how much mainline airlines companies can farm out flying to other (regional) airlines. If United or Delta or American want to fly a 19 seat plane they are still free to do so using their own pilots. Southwest doesn’t use regional airline feeds.
          As far as all those Saab’s and Beech 1900s, there has not been a 19 seat airliner built new since the 1990’s. At that age the purchase cost is greatly reduced from brand new. And the last time I rode in a 1900, it was a dirty, noisy mess. No GPS nav or autopilot so I figured that Captain had plenty of hand flying experience. I’m sure the FO was barely making $18k per year, I don’t remember if there was a flight attendant. Most of those Saab’s and 1900s are flown by smaller US airlines in more remote areas (Alaska, maybe even Hawaii, some Caribbean destinations) where there is no alternative transportation.

          • Thanks.

            Quite a few in Canada as well – Pacific Coastal flies Beach 1900Ds in BC, recently added a few that actually have antiskid which should be useful in the rain and ice on the coast.

            Pacific Coastal now operates WestjetLink for Westjet, using SAAB 340s which it has long used.

            With old airplanes, maintenance cost is high. Delta did fine using old airliners as it has good technical capability – one of the last operators of the Boeing 717 Mark II. (Douglas MD-95, the original Boeing 717 is the KC-135, with a cameo appearance by what was renamed the Boeing 720 – a short lightweight 707-100.)

  2. World is changing though, faster than TMF thinks probably. Hotels used to throw out old, stained or out of fashion linen — most landed up in Asia.
    Now they sort it, and sell it, cheap, to local recyclers and accountants beam, not for the immediate $ in the book but for the Ecologically Responsible points they get — worth more than the $ at the end of the year.

  3. Considering that the operating costs for electric is forecast to be about 30% (and possibly as low as 10%) of conventional propulsion, the economics will be there. We still have airlines like Cape Air flying Cessna 402s which only seat as many as 10 in some configurations and I don’t see anyone questioning those economics, so why not a 19 seater that not only costs less to “fuel” up, but also has considerably lower maintenance costs?

  4. I believe that this happen but maybe not as quick as some of the more optimistic estimates. I also believe some of the early pioneers will end up with arrows in the back or at least in bankruptcy court and I would not invest in the early efforts unless it was “mad money” that I was more than willing to loose.

    The reason it will happen is pure economics. I have a GMC pickup and an EV Chevy Bolt. The Bolt has no scheduled maintenance other than tire rotation and costs less than 3 cents a mile to drive which is less than 10% the cost to drive the pickup. Ford”s F-150 EV Lightening is going to sell for the same reason. The operating cost will probably be less than 20% of the F-150 gasoline version plus it eliminates the need for a job site generator, etc.

  5. “The Bolt has no scheduled maintenance other than tire rotation and costs less than 3 cents a mile to drive which is less than 10% the cost to drive the pickup.”

    Uh, except to pay for the expensive thing in the first place then to replace its costly batteries when they wear out.

    And you ignore tire replacement.

    FAIL

  6. Sam,

    I assume you have heard the warning from GM not to park the Bolt in your garage because of risk of fire?

    Not being snarky just a serious safety issue for you to look up if you are not already familiar.

    FWIW I think that (sadly) EV’s are the future. Not because of intrinsic superiority but government regulations and mandates and the push from eco-mentalists and their lobbies.

    With that said they do have certain advantages and I predict when my S Class Benz is done with its service life (I’m predicting another 10 years and 150,000-200,000 miles) I’ll likely buy an EV but NEVER a Tesla. My hate for tesla and Musk runs deep and dark.

    I HOPE the American companies have something nice to offer by then, but right now only the eTron, Taycan, and EQS appeal to me at all, and they are all stupid expensive.

  7. Interesting that TMF folks seem to have more insight and analysis ability than most of the aircraft industry including the press regarding the practicality and potential for success of commercial electric aircraft. However most of us know better than to invest in these offerings regardless of whether TMF approves or not.

  8. Electric Airplanes will need quick exchange battery modules, so that depleted batteries can be replaced with fully charged batteries, during the normal turn around time allotment; otherwise they will never be profitable. Thus a huge capital investment in additional battery modules. This fact alone may make hydrogen the practical green fuel.

    Or the plains could be hybrid: taking off with battery power only and then turning on Jet A APU at flight levels to recharge batteries and power motors.

    • Good points. Problem is battery modules and an APU adds weight which does not allow much for carrying passengers or freight or any kind of range. The short range proposals I have seen would have to be operated VFR only since it is unlikely to have sufficient range for alternates in IFR weather

    • Faster charging and more energetic batteries are coming. If you can charge the batteries during the 20 or 30 minute turn around time, you do not need to worry about exchanging batteries. However, the aircraft still need to be designed around some of the problems including the fact that the batteries to do decrease in weight as the charge is depleted. So the landing weight will equal the takeoff weight

      William: I am aware of some of the Bolt problems but I always charge outside and do not try to fully charge every day or leave the car charging overnight. It is set to charge to a max of 90%. Also, maybe you would like the Cadillac LYRIQ.

      • I hope that there will be some sort of a fix for the Bolt coming soon. I like it. It’s a good car, good price point, all the advantages of an electric car, but most importantly, it is not a Tesla. I find the Cadillac interesting also, I would put it on my list. In any event, as pretty much all first generation electric cars have demonstrated, I would not want to buy a first generation. There are too many bugs that need to be worked out.

  9. Jeremy Clarkson once opined:

    “If only there was some sort of magic juice we could put into our vehicles to make them go. Lets say maybe a liquid. Add it to a container on the vehicle and it would then go, lets say, 300-500 miles. Then when it ran low we could add more magic juice in a few minutes and it would go another 300-500 miles.” (I paraphrase)

    We HAVE the magic juice. Lets use it! Gasoline/diesel/Jet A is plentiful. Drill it and burn it!

  10. I’m glad about two things: That the practicality of the electric airplane as a substantial mode of transport appears to be heading for an actual real-world test, and that it’s not my money financing it.

  11. Somewhere between the naysayers and the idealistically gung ho, lies what will shake out in the future as “the truth”. These comments suggest that there is just not enough data to accurately forecast what that truth might be. However, based upon current efforts in the transportation industries, it does appear that electric motors will come to be the significant devices that move vehicles. What is still unclear is what energy source(s) will be. However, as humans increasingly recognize that global warming is threatening continued existence, the search for “clean” energy sources will continue to be the goal. Ultimately, we will have no other choice, oil reserves will eventually be depleted.