Government Aid for A350
Tom Sanderson
JF Mezei
>
> Somebody (Merzei?) had earlier posted that the A350 was being done without
> government aid. That doesn't appear to be true:
As I recall, because the 350 was launched at the height of the subsidy
war with threaths of going to the WTO, Airbus announced that the 350
would be more of less self funded, but with some general agreements for
future govt help should the WTO rule in Airbus' favour.
So the statement "Changes in the design of the Airbus A350 would cost
Spain 130 million euros." is very interesting. Reading on, it does
mention that those are loans.
So again, one has to ask whether those loans are at commercial rates, or
of the rates and repayment options are more generous than what finantial
institutions would have offered. And we'll likely never find out.
However, if the governments are providing/backing the funding through
loans, it does make Airbus' job of getting additional money easier.
Mind you, 130 million is peanuts when you are talking about a $2 billion
project (350 V1.0) growing to potentially 8 billion (350 V3.0). Perhaps
the loans are structured as smaller loans issued throughout the life of
the project so that as soon as there is an OK to "subsidize", the next
loans can be made with more attractive rates.
At the time Airbus did the 350 V2.0, it would have had a very good idea
of what the 787 was all about. And it would have already been talking to
its customers including Singapore and Qantas. V1.0 was to reuse some
tooling for the A330. V2.0 dropped that because they were aiming for
friction fit welding of large skin sections. At that time, how come they
didn't widen the fuselage if that is what the customers were asking ?
I think Airbus may have severely underestimated Boeing. I am starting to
think that Boeing initially sold the 787 as 8 abreast, giving Airbus
some confidence that its 330 fuselage width would be enough, and as soon
as Airbus launched its version, then Boeing turned around and started to
sell its 787 with 9 abreast giving the 787 additional edge in performance.
Airbus engineers should have told Airbus management that the 787 was
wide enough for 9 abreast. The 350 seemed to be sized to be just a bit
better than an 8 abreast 787. Make the 787 9 abreast, and all of a
sudden, the 787 gets quite an edge.
Had Boeing sold the 787 as 9 abreast from the start, Airbus' 350 would
have been built with greater capacity (either longer fuselage or wider fuselage).
And with recent statements about the A340 having become irrelevant (and
Emirates converting their orders to something else), I think that Airbus
may now have the necessary push from customers to completely revamp its
330/340 into a full 350 family. It really doesn't have much of a choice anymore.
.
--
misc.travel.air-industry is a moderated newsgroup. Please mail messages to
mt...@airinfo.aero, and see http://mtai.airinfo.aero for the FAQ and policies.
jbaloun
>The second modification consists of increasing the diameter of
>the fuselage by approximately one meter to increase its capacity.
Increasing the A350 from 5.64 m to 6.54 or 6.64 would put it well above
the 777 which has a 6.19m diameter and more than the 747 at 6.49m. At
this width Airbus could have 10 seats across with 1 inch wider seats
and 2 inch wider asiles than the 777 (leaving one additional inch for
each sidewall to support the larger diameter fuselage.) This may do
to the 787/ 777/747 what the 787 is now doing the 330/340/350 markets.
Would Airbus leap past Boeing if such a thing were possible? Could a
wider 350 replace the 340 and even reach the 747-400 market? Could one
plane realistically take on the entire 787/777/747 market?
Or maybe Airbus could use the 350 technology to upgrade the 330 series
and shift the 350 up into the upper 787/777 market and let the 330 take
on the lower 787 market.
No wonder Airbus is quiet these past few weeks.
All of these aircraft are more or less desireable to different markets
and a 777 sized 350 may rise up in the market and open up a gap below
it. As it is Airbus tried to set the 350 slightly above the 787 but
this margin seems to have eroded.
Meanwhile the A380 has a 7.14m fuselage. Could the A380 main deck hold
11 seats across? Is the A380 too wide for 10 across and paying the
price in a few percent more drag?
Part of aircraft drag can be related to the total cross-section area.
It takes more power to push through the air. If the 350 is to get wider
it must use higher rated engines or bigger engines. The engine choices
get fewer as discussed in last weeks Aviation Week magazine.
Aircraft design is very complex. Everything aspect of the design is
interrelated. Changing fuselage diameter affects drag, thrust, fuel,
weight, wing area, ...
It feels like Boeing and Airbus are shuffling the deck in this poker
game while raising the stakes.
James
JF Mezei
> Increasing the A350 from 5.64 m to 6.54 or 6.64 would put it well above
> the 777 which has a 6.19m diameter and more than the 747 at 6.49m.
My guess is that airbus might just make the 350 2 inches wider than the
787. This would allow wider aisles.
Another question is that of the cargo hold. The 767 was penalised
because it was too narrow for the big containers.
Does the 777 have an advantage over the 787 in terms of how big the
containers can be, or how many you can put in a row ? Or is the added
width of 777 vs 787 more or less lost with containers ?
I think another issue to consider here is the future of air cargo. With
the price of oil, will air cargo really increase or decrease ?
> Could a
> wider 350 replace the 340 and even reach the 747-400 market? Could one
> plane realistically take on the entire 787/777/747 market?
Airbus needs something that can take on the 787 and 777 markets. But to
do this, it would need an aircraft family that is either line the
330/340 with the lower end having 2 787-class engines, and the higher
end having 4 787-class engines, OR, the lower end having 2 787 class
engines, and the higher end having two 777 class engines.
I think airlines by default would prefer 2 engines. But if the big 350
has the same engines as the little 350, there is an advantage in terms
of spare parts/maintenance. And because the 787-class engines are newer
and more effficient, there might be some advantage to having 4 of those
instead of 2 777 class engines. (Although I suspect 2 777 class engines
would still be better).
Also, from a wing design point of view, it is probably much easier to
have one wing that support 2 engines (albeit different engines) rather
than some wings supporting 2 vs 4 engines.
> Or maybe Airbus could use the 350 technology to upgrade the 330 series
> and shift the 350 up into the upper 787/777 market and let the 330 take
> on the lower 787 market.
In other words, focus on replacing the 340 instead of the 330. But they
could still stick the 787 class engines on the 330 and use the lighter
aluminium alloy (in other words A350 V1.0).
> No wonder Airbus is quiet these past few weeks.
Last december, media leak about Singapore choosing Boeing, this in the
heals of Airbus losing the Qantas order. I think that this is when Lehy
managed to convince the rest of Airbus to move its butt because in teh
end, Airbus' survival is at stake here. The fact that the 340 is no
longer relevant today isn't news. Airbus would have known about it for years.
> it. As it is Airbus tried to set the 350 slightly above the 787 but
> this margin seems to have eroded.
This is what is interesting. When Boeing was talking about its 7E7, it
was bragging about fragmentation theory and how bigger planes just
weren't needed. But come the customers who look at the price of oil and
bad financial statements and competition from low cost carriers, and all
of a sudden, the cost per seat becomes more important and the 787
magically gets an added row to grow. It isn't about opening new thin
routes anymore, it is about lowering the cost of carrying each passenger.
The 7E7 was meant to replace the 767. Turns out that it is a bigger
plane, opening a bigger gap between it and the biggest 737 (meant to
replace the 757). And when the 787 gets an extra row, it again widens
the gap.
In the end, we may be looking at a big gap between the 737/320 and the
787/350 with nothing to fill that very market Boeing was bragging about:
fragmentation with long thin routes.
While Boeing has every reason to celebrate the wild success of the 787,
I think it too has to wonder about how the 787 and 777 can co-exist.
Before the 7E7 talks, Airbus had one big advantage over Boeing :
commonality in its 330/340 versus Boeing's totally different 767 vs 777.
The 787's cockpit will gain some commonality with that of the 777. But
the aircraft itself will be totally different from a point of view of
systems and maintenance procedures.
If Airbus could manage to build one family that can span both the 787
and 777, this might give it quite an advantage because it could also
compete and win against the 15 year old 777.
When Emirates complains about the 340, Airbus *MUST* listen. I don't
think Airbus can ignore the 340's demise anymore. And in fact, I can see
Lehy using his relationship with customers to get those customers to
leak information and make statements to help Lehy convince Airbus to
completely rethink its midsize aircraft.
The fact that Singapore has twice delayed announcing its aircraft order
is an indication that Airbus is serious enough to be able to convince
Singapore to wait a bit more before announcing its decision.
IF Airbus could get Singapore to announce orders for the A350 right
after Airbus announces the details of the new A350, then this would be a
good rescue. It would give the new 350 much needed credibility in the
market. If, despite all the improvements on the A350, Singapore still
chooses Boeing, it will be terrible news for Airbus which, after 3
attempts, still coudn't beat Boeing.
> Meanwhile the A380 has a 7.14m fuselage. Could the A380 main deck hold
> 11 seats across? Is the A380 too wide for 10 across and paying the
> price in a few percent more drag?
When you stuff so many people in a plane, you have to give each person
more space. The wider seats of the A380 as well as the general
space/spaciousness will give the 380 good marketing. Say Air Canada has
20 seats at a low price for YUL-CDG on a 330, Air France can also give
out 20 seats at low price, and it still has 530 seats at a higher price,
giving it higher yields. And Air France can advertise it has wider seats
than on Air Canada (especially if AC has 9 across seating on its 787s).
> It takes more power to push through the air. If the 350 is to get wider
> it must use higher rated engines or bigger engines. The engine choices
> get fewer as discussed in last weeks Aviation Week magazine.
But right now, the best engines around are the 787 class engines (GEnx
and the RR equivalent). They are the most fuel efficient simply because
they are the newest. Even the 787 will probably steal sales from the
777 because of that. If Airbus chhoses the older generation 777 class
engines, it may not be able to compete against the 787.
> Aircraft design is very complex. Everything aspect of the design is
> interrelated. Changing fuselage diameter affects drag, thrust, fuel,
> weight, wing area, ...
Woudln't both Airbus and Boeing have pretty good grasp/knowledge/formula
of this already ? If Airbus decided last december to embark on a real
redesign of the 350, surely it didn't start from scratch.
> It feels like Boeing and Airbus are shuffling the deck in this poker
> game while raising the stakes.
Well said. However, at this stage, I think Boeing has laid all its
cards so it can't really change much anymore. Airbus has an opportunity
to win this back.
I am wondering if the "Sonic Cruiser" wasn't a diversion done on
purpose, while engineers were working on the 7E7 concepts behind the
scenes. Boeing seems to have had plenty of time to think through the 7E7
designs/concepts. Airbus is scrambling in desperation at the last minute
to come up with something, anything, that can compete, and it seems it
just doesn't have the time to come out with something that is totally innovative/new.
Unless, of course, Airbus has been working behind the scenes on the
final A350 that is totally new for quite some time and purposefully make
the initial 350 look bad to give Boeing a head starts to ease the
subsidy war tensions.
Or it could be that the subsidy war prevented Airbus from going ahead
with its great A350 project because it would have required too much
money (aka: make the subsidy war worse).
At this point in time, Singapore wouldn't have delayed its order unless
it had gotten pretty good promises from Airbus that it would come out
with something really great. And Airbus wouldn't be risking the
egg-on-face of announcing a new A350 and having Singapore still ordering 787s.
For the US market, the only possible remaining sale is to United.
Northwest has gone Boeing. US Air alreayd ordered the 350 V2.0, and the
remaining airlines are so loyal to Boeing that they may accept to be
taken to lunch by Airbus but not even discuss aircraft.
.
matt weber
<jfmezei...@vaxination.ca> wrote:
8 vs 9 abreast is a decision made by the carriers, not Boeing. It is
all an effort to minimize ASM costs by packing in as many bodies as
you can into the sardine can. The only thing that has changed since
announcement on the 787 is the MGTOW on the 787-900 was upped about
40,000 pounds to give it range similar to the -800, and requires a
bigger engine than originally planned. That has moved the Trent 1000
and GEnx up to the pretty close to the upper design limits.
>
>Airbus engineers should have told Airbus management that the 787 was
>wide enough for 9 abreast. The 350 seemed to be sized to be just a bit
>better than an 8 abreast 787. Make the 787 9 abreast, and all of a
>sudden, the 787 gets quite an edge.
>
>Had Boeing sold the 787 as 9 abreast from the start, Airbus' 350 would
>have been built with greater capacity (either longer fuselage or wider fuselage).
>
>And with recent statements about the A340 having become irrelevant (and
>Emirates converting their orders to something else), I think that Airbus
>may now have the necessary push from customers to completely revamp its
>330/340 into a full 350 family. It really doesn't have much of a choice anymore.
EK technically hasn't converted the 340 orders to something else YET,
they have however put a hold on further A340 orders. EK has not been
happy with the A340 performance (and for that matter, nobody is realy
happy with either the A340-500 or the -600. the HGW version are to try
to provide the range that was originally promised with the original
payload. It will do that, but increase MGTOW means increased fuel
burn, and at $2 a gallon for Jet-A, the response has been positively
underwhelming.
JF Mezei
> 8 vs 9 abreast is a decision made by the carriers, not Boeing.
But Boeing is the one that decides how many exits the plane will have
and how many pax it wants to certify the aircraft for (aka: how many
people participate in evacuation tests). Also, Boeing is the one that
decides how much "cargo" the plane is to carry for a specific range
garantee. Add 25 seats and 25 pax, and that is a significant amount of
weight you add.
Initially, Boeing was marketing the aircraft as 8 across and stated
passenger capacity was based on 8 across seating. If Boeing was saying
something else to customers, Airbus would have known about when
competing against the 7E7/787.
> you can into the sardine can. The only thing that has changed since
> announcement on the 787 is the MGTOW on the 787-900 was upped about
> 40,000 pounds to give it range similar to the -800, and requires a
> bigger engine than originally planned. That has moved the Trent 1000
> and GEnx up to the pretty close to the upper design limits.
Interesting. So the GEnx will have greater thrust than originally
announced even for the 787-800 ? This may explain the later's increased
passenger capacity as well.
> EK technically hasn't converted the 340 orders to something else YET,
> they have however put a hold on further A340 orders.
Last I heard, they had frozen deliveries of all A340s, including the
ones that had been meant to be delivered this year.
What hasn't been confirmed is the conversion of those orders into A380s.
> happy with the A340 performance (and for that matter, nobody is realy
> happy with either the A340-500 or the -600.
Virgin seems happy with the -600. Of course, compared to more modern
twins, it probably doesn't compete anymore.
Tom Sanderson
JF Mezei
> Two would be preferred over four. Although you do get some efficiency gain
> out of the newer engines, you get a huge maintenance gain out of halving the
> number of engines.
However, if the 350 and a revamped 340 used the same engines, then there
would be considerable savings in terms of spare inventories, maintenance
tooling etc. Even though the 340 needs 4 engines, you could still have
one spare engine for both the 350 and 340. For the 777/787 you need to
duplicate engine maintenance infrastructrure/spares because they are not common.
Consider a fleet consisting mostly of 350s, with a few 340s to serve a
few high end routes. Having the same engines makes it very easy to add
those 340s to your fleet, even if those few planes carry more engines.
But for a fleet of mostly 340s, then you loose because you really have
way too many engines.
> They meant "bigger" as in "bigger than the current offerings...i.e. the
> 747". The 787 overlaps with the capacity on existing routes and, for really
> long routes, it's smaller than all the alternatives.
Nop.
Boeing lists 767-300ER as 218 passengers,
767-200ER as 181.
787-3 as 290 to 330 pax
787-8 as 210 to 250 pax
787-9 as 250 to 290
The only time the 787-8 would be used with only 210 pax is for ultra
long routes such as Singapore-New York (assuming it can carry 210 pax on
such a route). For the normal flights, you can assume 250 passengers
will be the norm.
> Which is the same thing. A thin route is one that you don't have enough
> people on to fill a large plane and is too long for the current smaller
> planes.
The point Boeing was making was that the 787 would help open new routes.
However, because it has higher capacity than the 767, it won't really
open new markets because markets that already cannot justify a 767
certaintly won't be able to justify a bigger aircraft.
The higher efficiently fo the 787 may have compensated for its bigger
size and still made it possible to make a profit with a half full plane
versus a full 767, but the rise in oil prices have essentially wiped
that advantage. Airlines must now focus on operating at full capacity.
Offering an Otumwah-Iowa to Shanghai non-stop flight may be possible.
But the airlines will have to charge quite a premium for the privilege
of going on that convenient flight that will never use the 787 to its
capacity. And the minute airlines charge a premium, the passengers will
prefer to go via a hub and catch the cheaper flights.
Lets face it, the "fragmentation" of overseas wasn't an efficiency thing
for airlines, it was a marketing thing. If you offer a non stop to
Shanghai and your competitor offers a connection at a hub, you hope to
get more passengers.
But the fiscal realities now force the airlines to reduce the importance
of marketing and focus on operating efficiency. And that means having a
smaller fleet, higher aircraft utilisation rate and using bigger planes
that reduce the seat costs.
And this is why Boeing customers have decided to pack more passengers
into the 787 and you never saw complaints about Boeing leaving the 767
market unfilled.
Airlines have realised that it isn't just fuel efficiency and staff, it
is also the capital/leasing costs, and those are huge debts that cause
the airline to go into bankrupcy protection. Reducing the number of
aircraft you have greatly reduces those debts and lease payments. It
also greatly reduces maintenance costs. Having fewer planes means having
bigger planes.
But having bigger planes means that the bar is higher to justify a long
thin route.
Once all 767s have been retired, you may find that many thin routes will
no longer really exist unless the cities they served have grown to
justify the upscaling from 767 to 787.
And you'll have aberration such as Calgary, whose gushing oil money may
create lots of demand for overseas travel and justify routes to many new cities.
In the past, legacy carriers were overequipped and had spare aircraft so
they could start otumwah-shanghai type of routes with their excess
fleets. Competition from low cost carriers will probably prevent legacy
carriers from buying excess aircraft just to dump capacity or have neat
schedules on paper. They really need to focus on keeping costs down.
Legacy carriers have learned (and hopefully won't forget) that you
cannot run down a low cost carrier anymore by just dumping capacity and
matching prices. The legacies had underestimated the LCCs staying power.
Right now, you are seeing airlines such as Delta redeploying excess 767
from domestic to trans atlantic routes. Since they have those 767s and
can't get rid of them, they may as well used them where they will lose
the least amount of money. But once Delta emerges from bankrupcy and
embarks on fleet replacement, it isn't a given that that will be
replacing every remaining 767 with a 787. Sicne the 787 has greater
capacity, it is likely that the count of aircraft will be going down,
and that will mean that Delta will have to eliminate some of the less
dense routes simply because it will have fewer aircraft.
And you're not going to be seeing an instant switch from many 767s to a
few 380s in the USA. But you are seeing upscaling from 767 to 787 and
777s. And once AA's 777s are full, how can it increase capacity ? AA
will eventually have to buy 747s or 380s.
> Since trip cost is essentially fixed for a given size, not filling
> the plane makes the cost per passenger too high to be economical. If you
> can get a smaller plane with the same range, you can fill it and get
> reasonable cost per passenger.
Generally no. Because any plane has some fixed costs, and the smaller
plane has bigger fixed cost per passenger. But this is squewed by some
otherts costs. For instance, some airport may decide to charge more to
land one A380 with 550 pax versus landing 2 275 pax planes, in which
case, the better efficiency of the 380 may be negated by airport costs.
Same for pilots.
> They never expanded the smaller end, they just added to the bigger end. The
> gap between the 737-900 and the 787-8 is the same as it was before.
Nop. 737-900 is 177 passengers. 787-8 is going to be around 230-250 in reality.
757-300 was 243
757-200 was 200
So, Boeing had before the 757 with 200 the 767 at 218
Now, it has the 737-900 at 177 going to the 787-8 at 230-250
Boeing has totally eliminated overlap in the lower end, but has created
overlap between the 787 and 777.
The reality is that for long hauls, you'll be seeing less fragmentation
with bigger planes. For domestic routes, you'll be seeing the 737 with
some 100 seat RJs.
And you'll have a few niche carriers running 737/A320 on trans atlantic
routes with business class only as well as a few instances of 737s on
intl routes (such as Air Pacific using 737s to get to north america via honolulu).
> Basically, the market said we want long and thin, but it's not as thin as
> Boeing originally planned.
Exactly. So the market is moving away from fragmentation.
> That is indeed a big question. Boeing really didn't want to overlap the 787
> and 777, but customers drove them to it. I don't think this was so much
> that they wanted a larger 787 as that they wanted their 777's to have all
> the bells and whistles of the 787
Yep. I get that feeling too. I think Air Canada got some 777s because
they could get those delivered ASAP, and then get its 787s whenever they arrive.
> Yes, the 787 will be easier with respect to systems and maintenance
> procedures...that's usually considered a selling point, not a negative.
Ok, lets turn it the othwr way around: aircraft with mixed 787/777
fleets will be stuck witb the older 777 that won't have the improved
maintenance aspects of the 787.
This is where Airbus could regain market share if it could produce a
single family that spans both the 787 and 777 with modern
low-maintenance materials and commonality in parts/maintenance. This
would present a clear advantage over boeing's dual 787/777 solution
(probably forcing Boeing to upscale the 787 to totally replace the 777).
Perhaps Airbus should consider building a shortened version of the A380.
14 rows of seats (8 across upstairs, 10 across downstairs) will get you
250 passengers :-) :-) :-) :-) :-) :-) :-) You'd have the cockpit right
in front of the wing, and the tail directly behind the wing. (not that
far from blended wing :-)
> The problem is that Airbus, so far, has not been able to create a viable
> competitor to the 777.
Remember that the 330/340 predate the 777 and that at the time Airbus
set out to do the 340, the GE90 class engines didn't exist and the only
way to build the 340 was with 4 engines. So airbus was stuck with older
technology on a plane that was still too young to scrap.
> I strongly doubt it...the total economic damage to Airbus due to the subsidy
> dispute is minor compared to the damage of being years behind your
> competitor's aircraft.
In the "big picture", this may not be so bad. Consider that Boeing got a
HUGE rush of orders for the 787. Except for Singapore, there probably
isn't much left in terms of large orders. And Boeing's order book has
now been filled for the 787 for a number of years.
So when airlines such as BA/AF/KLM/LH or the USA airlines start to place
orders, there may not be that big a difference in delivery dates.
HOWEVER, Airbus may have advantages of having a newer design in place
and be able to beat Boeing, especially if Airbus has a product that
competes against the 777.
The gap between Airbus and Boeing for the "newer" 350 vs 787 won't be as
big as the gap between the 340 and 777 since the 350 and 787 will have
engines of the same vintage.
There is little chance of Airbus taking all of the 787s sales. But
Airbus could get a lot of the 777 sales since its product will be 15
years younger.
I know this may sound silly, but is there any chance of Airbus doing a 3
engine version of a 350 plane, similar to the DC-10 , using the GEnx
engines ?
This would allow Airbus to have the 2 engine 350 at the low end, and a 3
engine 350 for the stretched versions, able to compete against the 777.
Tom Sanderson
JF Mezei
> The spread in passengers is based on cabin configuration, not range. A 210
> passenger 787 is a 210 passenger 787, whether it's doing London-Sydney or
> New York-Washington.
Tell that to Singapore airlines, they seems to have experienced first
hand the compromise between range and number of passengers on their 340-500.
The range of the 787 will be affected by the number of passengers in it.
Since few airlines will actually need that 8000nm range, most are
deciding to pack more passengers in the plane.
> You're looking at it from the wrong direction, and also not taking cost into
> account. The 787 opens two new kinds of routes: 1) too small for a 777 but
> require that kind of range
Sorry. The 767 had already filled those routes well before the 777
could fill them. In fact, the 767 and 757 are the ones that opened up
all the "fragmentation" routes. It was a new type of aircraft. The 777
simply replaced the DC-10/L1011 and it isn't until recently that it
acquired enough range to be considered a long range aircraft.
The big question is whether the 767 and 757s have already opened the
markets for non-stops that are worthy of maintaining, and whether there
are really that many untapped markets that could still be developped.
Remember that the 767 and 757s opened routes at a time when it was easy
to open them. Cheap fuel, rich airlines that just got out of regulation.
Airlines today are in a very different situation. And they can't afford
to dump money to try to develop a market by dumping capacity and hoping
it eventually gets filled.
The 737-900 is more likely to open new routes than the 787.
> No, the rise in oil prices have *widened* that advantage.
Not quite. The 20% increased efficiency doesn't balance out the doubling
of price of oil. More importantly, airlines are currently in a phase
where they are striving to become efficient and cannot afford to operate
half full flights at low prices. The oil price increase will motivate
them to replace the 767s with 787s, but it won't motivate them to open
new routes.
Also, and this apply to both the A380 and 787: Airlines that initially
configure those aircraft with relatively few seats will be able to
increase capacity by simply adding seats in the future. So they can
handle increased demand without having to buy additional aircraft,
Secondly, when you look at a trans-atlantic operation, your aircraft
ends up having spare hours during the day. So you want the aircraft to
land at a city where it can be used for another hop before returning to
trans-atlantic duty. Landing in a smaller cvities reduces the
opportunities to use that aircraft.
I think that the pressure to run a tight/efficient airline will force
the airlines to somewhat rethink their route structures. They've already
begun to do that for their highly inefficient domestic operations. It
isn't going to be a revolution. It will be more subtle changes over time
as airlines start ordering new planes and decide how/when to dispose of
their older ones.
Also, code-sharing and alliances and changing of riles to fly to places
such as europe will gradually evolve the market. Hard to predict how it
will really all pan out.
> That's true for US airlines that are facing incredibly fierce competition
> and narrow margins...it's not as big a deal for many other carriers.
Low cost carriers are appearing in most continents now. And airlines
around the world are feeling their pressure. Even the middle east now
has low cost carriers.
> If they can't fill the plane, why would they offer the flight at all?
In the past, they they had tons of spare capacity and cash, so they
could afford to deploy aircraft to test markets. The current tightening
of belts and elimination of excess aircraft means that airlines will
have less ability to do this.
Delta is currently doing so simply because it has excess 767s that it is
redeploying to intl service because they hope to reduce losses on such
routes. But when the time comes to renew those leases or buy new
aircraft, only time will tell if Delta will want to keep excess aircraft
deployed on questionable routes.
Of course, if another "boom" period happens, airlines will quickly
forget about the past and again start to buy excess aircraft. However, I
am not sure that another "boom" is coming anytime soon due to the high
oil prices.
> Direct flights are cheaper and more efficient for the airline that hub
> connections.
The longer the flight, the less this is true.
There is a point where it becomes cheaper to pool your passengers into
one large aircraft for a long haul. And this doesn't mean pooling all US
passengers at chicago to end them to Shanghai, it it may mean pool
midwest to chicago, pool eastern customers to new york and pool western
passengers at los angeles and only operate 3 flights to shanghai intead
of 10 flights from 10 different cities.
Also remember that if you're already operating an Otumwah-Chicago
flight, as well as a Chicago-Shanghai flight, it doesn't really cost you
more to take a pax from Otumwah via Chicago to Shanghai.
Now, if your Chicago-Shanghai flight is nearly full, and you have 250
pax at Otumwah wanting to go to Shanghai, then it makes sense to run a
non-stop flight, compared to sending them to chinago and add an extra
flight from chicago.
In the end, the "fragmentation" theory requires a lot more capital for
an airline since it requires far more aircraft. And when you get into
routes that take more than 12 hours from takeoff to takeoff, you require
more than 2 planes to provide daily service.
Of course Boeing wants to sell you more planes and they will try to sell
you the idea that long thin routes are better than fewer flights on
larger aircraft.
> Naturally, but it also costs you less than running those same passengers
> through a hub. You get increased demand (direct flights) for lowering your
> cost...that's a win-win.
The concept of increased demand is hogwash. The core demand is defined
by the city's economy and population. Once they decide they want to go
to a certain place, then they see what travel options exist. If farmers
in Otumwah don't have any need to travel to Shanghai, then opening a
non-stop to Shanghai won't magically create a demand for it.
And at the moment, the concept of creating a better looking schedule in
the the hopes of stealing customers from another airline in a limited
market is also hard because airlines don't have the resources to mount
such battles. They are focusing on cutting costs and increasing efficiency.
> Which is why Airbus built the A380...guess which plane is selling better.
There is no debate about the midsize aircraft market being bigger than
the jumbo market. However, every A380 sale is the equivalent of two 787
sales when you look at capacity. So the roughly 160 orders for the beast
are equivalent to 320 sales of 787s. So the 380 isn't that far off from
the 787.
The real question is whether fragmentation will increase, or whether the
fragmentation that has happened since the 767/757 has pretty well
stabilised and airlines now focusing on increased efficiency/decreasing costs.
With airlines focused on cost/efficiency, I am not sure that operating
737-900s trans-atlantic will be good business, unless they operate in
chiche all-business-class setings.
> Average aircraft size has been dropping for decades...there is no reason to
> think that trend will reverse.
I think the trend was reversed when US airlines started to buy 777s.
Also, in terms of frequencies, there is only so much they can do trans
atlantic and at one point, increasing capacity means upscaling the
aircraft. AA has done so by upgrading many flights from 767 to 777.
> > The reality is that for long hauls, you'll be seeing less fragmentation
> > with bigger planes.
>
> If you believe that, start selling Boeing and buying Airbus.
Nop. Bigger planes means moving from 767 to 787 and 777. And Boeing
currently has better products in that market.
> You're completely ignoring the "thick" domestic routes.
This is the big question. Will airlines go for the "Southwest" model
with a single aircraft type and just a few specific routes using intl
equipment (eg: 787s), or will they truly integrate the bigger planes ?
Will legacy carriers focus on efficiency before frequency ? This will
dictate whether they go with smaller or bigger planes for domestic
service. Domestic service is where you are likely to see lots of fragmentation.
> Agreed, but that would require Airbus to simultaneosly do a groud-up
> redesign of the 330/340/350, and that's just not going to happen. They
> don't have a money or manpower to do it. Neither Airbus nor Boeing is
> really capable of doing more than one completely new aircraft at a time.
Boeing is doing 3 models of the 787.
The point is that *IF* Airbus were to come up with a core aircraft that
can scale from 787 to the 777-300, then the could afford to develop the
variants to fill that market. They could ocme up with something which
at the low end is slightly bigger then the 787-8, and on the stretch
version slightly smaller than 777-300.
You are right that there is no way Airbus could produce 2 different
aircraft at once. So if it goes with a 330 replacement only (the 350),
the 340 will stagnate with a few sales that happen simply because Airbus
will be able to deliver them right away because of an empty order book.
Note: Air Canada is starting to dump its 340s in 2007 as soon as the
777s come in. The lessors will swap the aircraft. So that reduces
potential sales for 340s even more.
> > Remember that the 330/340 predate the 777
>
> Only by 3 years...same as the difference between the 787 and the A350. In
> aircraft development terms, that's the same time.
Actually no. Airbus wanted a twin 340 but couldn't wait for the engines
big enough to make the 340 a twin, so they were stuck with 4 engines.
Boeing waited a few years and got the big engines. Airbus then concucted
those stories about ETOPS to try to justify its 4 engined 340. But that
was just smoke and mirrors. Remember that Airbus was the first to build
a twin wide body aircraft.
In the case of the 787/350, they are getting engines of the same
vintage. Unless of course, Airbus has got something up it sleeve and
will announce agreement for uprated engines that will allow it to make
its 350 span both the 330 and 340.
> They only needed GE90 class engines if they wanted to build the 340-500 and
> 340-600 as twins, and those models were developed *after* the 777, so those
> engines were available if they wanted them.
Fair point. Not sure though how much it would have costed to modify the
330 wing to find the 340-5900 and put the big GE90 engines on it.
> I'm sure it's possible, but why would you when you could do it as a twin by
> reengineering the 777-type engines?
If you could have low end 350s with 2 GEnX class engines, and the high
end 350s with 3 GEnx engines, it might be better than having the high
end with GE90 class engines.
jbaloun
>deciding to pack more passengers in the plane
Passengers in seats is a visible inticator. How much is this duscussion
affected by whether or not the airline has loaded revenue generating
cargo below the floor? Freight can be heavy and help 'fill up' the
capacity of the aircraft on a shorter route.
>If you could have low end 350s with 2 GEnX class engines, and the high
>end 350s with 3 GEnx engines, it might be better than having the high
>end with GE90 class engines.
The L1011, DC10, 727 and Falcon with engine #2 embedded in the fuselage
seem to me to tend to end up more complex than other engine
arrangements. Running the air ducts through the verticle stab.
structure must make for a complex assemlby, interrupted load paths,
increased aerodynamic surface drag, and puts limits on servicability
and future upgrades to the engine.
To me today the 727 looks a little silly considering that the 737 can
do better with its two engines.
When you mentioned a 3 engine A350 I began to think of a splt vertical
stabilizer/elevator with and engine mounted on a pod inbetween . This
is known as a v-tail or "butterfly" tail. It would look strange and
passengers would wonder if it was safe.
One theoretical advantage of a v-tail is less drag from two slightly
larger surfaces as compared to three conventional surfaces.
James
Tom Sanderson
JF Mezei
> No. You'll get the 8,000 mile range with a full cabin.
Airbus also said that for the 340-500. Turns out it appears not to be
the case. So we'll have to wait for the 787 to fly before we really
know. Also it depends of the REAL definition of "full" cabin that goes
into the contracts. What we see on the public web sites is always
purposefully vague enough to prevent true conclusions. (aka: yea, you
can put 280 passengers, but to get full range, you may not be able to
carry their luggage :-)
> There are a lot of routes a 777 can do that a 767 can't, especially the
> early non-ER 767's.
The original 777-200 had a fairly limited range. It was good for
domestic and trans-atlantic, but not much else. It is the ER which made
it palatable for longer missions (and the LR is mostly about bragging
rights because the market for ultra long range is small). And this is
why you haven't seen 777s in pacific operations, while the 767 has been
operating in the south pacific for decades. (even the 767-200ER)
And since the 767-200ER and 300ER came well before the 777-ER, it is the
767 that opened the new routes.
My point is that there aren't that many routes left to open that the 767
hasn't opened already. And since the 787 is bigger, the starting point
to justify starting a new route is higher since you want higher demand.
Obviously, as cities grow, they may eventually reach a point where they
can justify their own non-stops. But this is going to happen over a much
longer term.
> Why? The 737-900 doesn't have as much range as other 737's,
The 737-900ER will have about 3000-4000nm range depending on load. And
that makes it a possible aircraft for some trans atlantic routes.
Remember that it is the designated replacement for the 757, and the 757
was part of the "fragmentation" solution.
> You misunderstand...rising oil price makes all aircraft operations more
> expensive. However, the larger oil price becomes, the larger the difference
> in operating cost between the 787 and it's competitors.
Yep. The 787 will win many sales because of its efficiency. But the fact
remains that as fuel oprices grow, even the 787's operating costs rise.
And because the 787 is bigger, you want to ensure you fill it with more
passengers before you can justify starting a new route with it,
especially with the price of oil that makes it much more expensive to
just dump capacity on a route in the hopes it develops over a long term.
Airlines like Emirates are on a huge buying spree, hoping that demand
will grow to justify their incoming fleet of aircraft. But established
carriers have just suffered a large indigestion because they had
overpurchased planesb in the past and learned the hard way about the
costs of having underutilised aircraft. Emirates risks having a huge
indigestion in a few years if their growth doesn't match growth in capacity.
I think you'll find that established carriers, at least for now, will
make modest purchases of new aircraft designed to replace aging
aircrtaft instead of boosting capacity. For many US airlines, this is
the first replacement cycle for the 767s. (some airlines had laready
begun by buying A330s).
> It will if the ability to go non-stop saves them enough over doing a
> connection.
Only where demand warrants. And the 787 will not magically make some
routes justifiable wherwas they were not in the past. The 767 did that
because in the last, it was only the DC-10 and 747 that could go far.
Look at the 707. It was a glorified 757 with longer range. At that
time, the tickets for air travel were very high relative to income. So
air travel was restricted to the rich and famous. As time progressed,
the cost of air travel went down (relatively) and more people travelled
and this caused the 747 and DC-10 to happen to handle higher loads, as
well as the 767/757 to start non stop services to more destinations.
What you must ask now is whether the cost of air travel (relativel to
income) will continue to go down, or whether it will go way up due to
oil prices. Southwest's ridiculously low oil contracts will run out
eventually and they too will have to raise their rates.
If the cost of air travel goes up (relatively), then demand for air
travel may stop growing at the same pace and the concept of opneing new
routes due to inceased demand may no longer be so popular.
> You can absorb, at most, about 10% growth by adding seats to the plane, and
> you do so at the cost of passenger comfort and, hence, market appeal.
In canada and other countries, passenger capacity was increased by
removing first class. And in the USA now, much extra capacity is being
generated by simply using aircraft more efficiencly and having them fly
more segments per day. Consider that US Air was able to return a large
number of aircraft (Was it 50 or 80 ?) and keep the same capacity simply
by using aircraft more hours per day and not having them stand iddle at
a gate for long times.
USA legacy carriers still have a huge untapped capacity potential by
further improving their schedules.
> Agreed. And the most efficient route structure, as routinely proved by the
> LCC's, is point-to-point, not hub and spoke.
Funny, looking at the "Airline" programs on TV, it seems to me that
Southwest definitely has hubs at LAX, MDW etc.
And when you look at Easyjet or Ryannair, they too seem to have a large
hub at London from which most of their flights operate.
The big difference is that they operate on extremely efficient
schedules, whereas the USA legacy carriers have traditionally operated
higly inefficient schedules only so that their schedules would look good
on CRSs. And the same highly inefficient operations caused much
congestion and delays at hubs whenever conditions were not perfect
because the operated in "rush hours". This resulted in more gates than
necessary being needed, more staff because you have to handle more
flighst at the same time, and more delays when things go wrong.
You can't justify Otumwah-Chicago AND Otumwah-New York AND
OtumWah-Orlando ADN OtumWah-Atlanta.
But you can justify Otumwah-Chigago, load it up and then get passengers
to use existing flights to even more destinations.
This doesn't mean that St-Louis cannot have direct flights to
destinations that generate enough traffic. But it does mean that you
cannot blindly apply one paradign or the other. You need a smart mix.
And it must not be a religion. You get the metal that best fits a route.
Southwest has a metal religion. It will only fly 737s, and that limits
where it can and cannot fly.
legacy carriers have regional affiliates that allow more cities to be
served. But don't smaller cities doN't really need that many no-stops to
all over the place. Remember that Independance Air was "accused" of
flying too small aircraft to be profitable.
Smaller aircraft cost less to operate. But they cost more per passenger.
So if you're going to run a route just so your schedule looks good, you
are better off with a small baby jet. But if you're streamlining your
schedule to lower the per passenger costs, you prefer to pool passengers
on larger jets and only use the baby jets for short hops to feed the big jets.
New York is a big enough market to get its own non-stops to any large
city in the USA. And in fact, airlines should make it hard for new
yorkers to choose connecting flights because it does cost less to carry
a pax on a large plane non-stop versus sconnecting at some city.
The question is whether airlines can really get low per-seat costs from
smaller markets on long flights with small planes.
And a 787 used domestically may in fact cause more hubbing. Say the 787
costed 25% less than a 737 to operate. Its per seat costs would then be
50% lower sincit carries twice as many passengers.
The price difference would more than justify bringing 737s from 2
smaller cities to a hub and carry both planeloads on a 787 for the
longer flight compared to operating the 2 737s on the full length non-stop.
The question becomes at what point does the cost of the stopover start
to be lower than the added efficiency of the newer bigger jets compared
to the 737.
In the past, employees were the biggest costs in an airline. This has
now changed to fuel. So connecting at a poorly scheduled hub that
unnecessarily required a lot of employees/gates was a very costly thing.
But once airlines streamline schedules and drop unnecessary staff/gates
at the airport, it does drop the employee costs of a connection. And
with the price of fuel rising, it also puts more emphasis on fuel
savings and using most fuel efficient aircraft on the longer segment.
Are we near that point where hubs become more effective, I don't know.
But if the 787 is really that much more efficient than the 737, I would
expect the legacy carriers to start to leverage that when competeing
against Southwest.
> Those changes will all govern how individual airlines evolve...they have no
> effect on how the total industry evolves. At the end of the day, you need
> to get X number of people from point A to B for the least cost.
Airline alliances may a big difference. On the east cost, it hasn't made
a big difference because the USA government hasn't allowed the full
potential of alliances (especially BA/AA). But when you llook at
trans-pacific, Qantas in particular, by feeding more pax from AA to QF,
QF has been able to justify the A380, added frequencies etc.
Now, consider if AA and BA were allowed to really combine schedules in a
true code sharing. You woudln't see 767s anymore. You'd probably see
hourly 747 service between new york and london because in the end,
combining the capacity into fewer flights is a LOT more efficient.
Without alliances, each airline tries to duplicate the capacity the
others have, and this means smaller aircraft.
So the alliances do matter when it comes to planning fleets.
> open an LA-Sydney route. Traditional carriers make most of their money on
> long haul international, which is exactly the arena that the LCC's don't
> want to compete in.
That is because the legacy carriers have had such inefficient domestic
operations that theyir domestic ops have been eaten alive by the LCCs.
And trans-atlantic, don't think there aren't LCCs operating. Air Transat
has been quite succesful for a number of years for instance. And there
are LCCs operating interantionally in europe as well. (they are called
"charter" instead "LCC", but it comes down to the same thing.
> Testing the market is just another name for opening a new route...
This requires you have spare aircraft, and enough money to pay for the
route while it builds up. And those two costs have gone up a lot in
recent years.
> No, they didn't have excess 767's. They cancelled domestic routes to free
> those planes on to more profitable international routes.
Delta has excess capacity. Until they can return the surplus aircraft,
they might as well used them where they lose the least amount of money,
and that means intl service. Delta doesn't need as many aircraft for
domestic ops because of service cuts as well as improved schedules that
can carry as many people with fewer aircraft. They are suplus aircrtaft
being redeployed to intl service.
Ask yourself: how come those 767s weren't deployed to intl service a
long time ago ? In the past, they didn't have surplus aircraft because
their schedule was inefficient and required thsoe extra 767 to be in
service to competansate for the inefficient schedule.
But once the legacy carriers have trimmed off the excess aircraft and
have become a lean and mean operation, they won't have spare aircraft at
their disposal to test new markets.
Consider Westjet that has had to delay launching new routes because of a
delay in delivery of new 737s. When you don't have spare aircraft due to
efficient schedule, you don't have the luxury of deploying an aircraft
to a new route at a whim.
> No, a direct flight is always cheaper than a hubbed flight, for the same
> number of passengers.
The critical part is "for the same number of passengers"
Say the 737 had 9000nm range for sake of discussion:
Do you really think that operating the following non-stops in 737s:
Otumwah-Singapore
Dayton-Singapore
Indiannapolis-Singapore
Toledo-Singapore
Milwaukee-Singapore
Would really be cheaper than:
Otumwah-Chicago
Dayton-Chicago
Indiannapolis-Chicago
Toledo-Chicago
Milwaukee-Chicago
and then use an A380 to do Chicago-Singapore (assuming it had the range)
????
Note: the 737s on the long range option could only carry pax to Singapore.
The 737s on the short range option could carry pax to Singapore, as
wella s Chigago and other connbecting cities and thus much more likely
to be 100% full than the 737s dedicated to non-stop service to Singapore.
Cosnider that for heach long haul, you need multiple crews due to shift
work on borad the aircraft. Running 5 737s on 18 hour flights would need
10 crews of pilots. (assuming you can do it wioth 2 crews). Running the
737s and A380 requires only 7 crews, and the 737 crews have plenty of
spare hours to work other flights during that day.
Doesd this mean that you must funnel all Singapore bound passengers via
Chicago ? NO. Each large city that generate enough traffic can have its
own non-stop. But the list of such cities is limited. And in the end, to
justify a non-stop flight to a very far destination, you often need to
add demand from nearby cities to the deman of your city, and that is
implicitely making your city into a hub that collect regioinal traffic
to get the critical mass to launch that ultra long haul non-stop.
> You need long aircraft on the long haul because that's the only way you can
> get the range. The whole point of the 787 was to drive 747/777 economics
> into a 767 sized plane.
Upgrade the 747 to have the same vintage technology/design/materials as
the 787, and you may find the 747 will regain a massive advantage over
the 787.
The 787 will, for now, steal much traffic because the economics are
skewed due to its technological advantages. Not because it is a smaller plane.
> Sure it does, because you can't charge them more for the connection than you
> can for the direct flight.
This is where legacy carriers went wrong. They favoured connections
where it was not warranted simply becayuse that would allow them to
increase frequencies and hence look better in CRS.
Airlines need to charge for the cost of connecting. But airlines also
need to charge more for using a smaller aircraft where per-seat costs
are higher. And airlines have to stop charging less to go A-B-C versus
just going A-B. They need to have fares that truly reflect operating
costs and stop artificially messing with fares.
> In what way is a few flight/large aircraft model good for the airline or the
> passenger?
Lower per seat costs results in lower fares.
> Yes, there is. If you look at Airbus and Boeing's long range market
> forecasts, they are significantly different on which size airplane they
> believe will have the most market share.
Not really that different. Both agree there is a bigger marklet for the
midsize aircraft than jumbo jets.
> But they're not competing with each other...A380 capacity does not eat into
> the 787 market, and vice versa.
But the argument had been made that 787 sales were much bigger than that
of A380. But in tersm of capacity that will be put onto the overall
market, current A380 sales rival those of the 787.
> Derivatives are a completely different thing. The incremental cost to do a
> 787 derivative (the -3, -9, and maybe -10) is perhaps a tenth the cost of
> the whole new ground-up airframe.
Which is why it woudl be important for Airbus to come up with a new
airframe that can be scaled to compete against both the 787 and the 777.
This way, they only need to pay for derivatives to reach into both
markets. Developping two totally separate aircraft would cost way too much.
And if Airbus can develop a single aircraft, in the end, the cost per
aircraft will be lower and Airbus may gain a significant competitive
edge against the 787 and 777 in terms of aircraft pricing.
> Might have been a ground clearance problem too...you need tall landing gear
> to keep those engines off the ground.
Boeing was able to raise the 737 from its original low fuselage with
the small loud cigar whistles to the current CFM engines on the NG
models. So if it outfits the bigger 350s with GE90 class engines, it
should also be able to raise the landing gear. (or perhaps have a high
enough landing hear on all 350s even if not needed with GEnx class engines.
John L
>domestic and trans-atlantic, but not much else. It is the ER which made
>it palatable for longer missions (and the LR is mostly about bragging
>rights because the market for ultra long range is small). And this is
>why you haven't seen 777s in pacific operations, while the 767 has been
>operating in the south pacific for decades. (even the 767-200ER)
NZ flies 777s AKL-SFO. All the other long routes have 777-400, the
shorter routes that stop on the way have 767. My impression is that
they don't use 777s on those routes because they can fill up the 747s
and the curfews make it hard to spread out flights through the day.
R's,
John
Tom Sanderson
JF Mezei
> I would assume that there are penalty clauses in
> the contracts if the plane fails to meet its performance targets.
The issue here is that we do not know the real performance targets that
Boeing was willing to put on paper. What is on their web site is neat
marketing that is vague enough that you can't hold Boeing (or Airbus)
to those numbers.
> There are standard rules for comparing airplane performance (lbs per
> passenger, lbs luggage per passenger, etc.) Hopefully, Boeing isn't playing
> funny business with the calculations but,
I am sure Boeing is dead serious when it comes to signing contracts. But
the specs that are public have a certain amount of liberal
interpretation in them. The big question is how well informed Airbus
and Boeing are of each other's true promised specs.
> That's the part I'm not sure about. If the 767 costs 20% less to run (i.e.
> a 787) would more routes be viable?
In order to generate intl business travel demand, you need a city with
an import/export focused economy, or one with large presence of foreign
corporations or the US headquarters of a multinational company.
If you have a city whose economical role is to support the regional
economy/farmers, then it is less likely to have demand for business
international travel.
So even if you lower the bar to allow lower passenger numbers to justify
a flight, it doesn't mean that any city of the new smaller size will
generate that demand.
> Yes, but you've already got the longer range 737's running trans-Atlantic
> and mid-Pacific routes...why will the 737-900ER change anything?
Getting enough passengers on the plane to allow a coach section. Current
737/320 trans-atlantic service is business-calss only.
> You do need to take into account the tiny factor that most of the large
> carriers were doing at least OK until 9/11
Actually not the case. In the summer of 2000, legacy carriers started to
hurt badly, in part because their inefficient schedules had a extremely
high rate of delayed flights. And in 2001 before 9-11, the lagacy
carriers fancy yield management came back to hault them because business
travellers had begun to switch to LCCs who have more reliable schedules
(less delays) as well as playing fare ga,mes to be able to get lower
fares instead of playing the ridiculously high last minute fares.
Remember that TWA had gone belly up just before that and in 2001, AA was
busy trying to integrate the remnants of TWA.
Remember that Southwest remained profitable after 9/11. Jetblue also. It
is the legacy carriers with highly inefficient schedules and highly
bloated fleets that hirt badly. And this dats back to the mid/late
1990s when the legacy carriers scrambled to order new jets to meeet the
1999 Stage III deadlines and they ordered way too many aircraft.
> Agreed, but you can tell from the size of airplanes that are selling that
> airlines are retiring their larger aircraft (DC-10/MD-11, 747, A340) and
> moving to smaller planes (787/A350/777).
Do you really consider that moving from DC10 to 777 is downsizing ?
Also, consider Air Canada which replaced some 767s with 330s (upscaling)
and is now going to replace its 767s and 330s with 787s (again upscaling).
> Sure it will...a route that is break-even with a 767 is profitable with a
> 787 because of the difference in operating cost.
The problem is that many of the routes that WERE break even back then
are now money losing. Witness all the major bankrupcies in the USA.
> Fair point but, given that the current oil price is artificially high due to
> stability fears, not actual supply or cost-of-production issues.
> Instability doesn't last.
Airlines who plan for a $30/barrel price won't survive. Airlines that
plan for the worse will survive.
> That's only true if you assume that cost of air travel is the only demand
> driver. Another, much larger one, is the number of people who can afford
> air travel.
For domestic travel in the USA, there may be a lot of "family travel".
But for international travel, this is not as important and you need
year-long business travel to justify a flight. (Or you need special
ethnic makeup of a city that generates abnormally high year long demand
to a destination.)
> You can't return aircraft and maintain capacity. Capacity is a theoretical
> number based on the number of seats you have and the utilization your flight
> crews can support.
Available seat miles is the metric for an airline's capacity. You could
have 365 737s, and run 1 flight per day, each day with a different
aircraft and have the same ASM as running the same schedule with 1 plane.
An aircraft that site at a gate for 3 hours doesn't generate any
capacity. The same aircraft that leaves for a 1.5 hour hop and back
generates ASMs.
> good business move to cut it down, but it's not "free" because as you lower
> excess capacity you decrease your flexibility and impair your ability to
> respond to new markets, maintenance issues, delays, etc.
Airline industry is extremely capital intensive. When margins go down
due to compatition, you can't afford to have iddle capital that isn't
making money just for the sake of giving yo the flexibility to srat new
routes when you feel like it.
> All airlines, LCC's included, have busier and less busy airports. That does
> not make them hubs. Take a look at SWA's interactive route map:
> http://www.southwest.com/travel_center/routemap_dyn.html
However, the "point to point only " myth of Southwest falls apart when
you look at that map. Compare the "Show all service" with "Show only
non-stop service", you clearly see how Southwest,s route map does rely
on connecting services and this happens through the busier airports
which, like it or not, are hubs.
Remember that it is possible to operate an efficient hub. Just because
an airline has a busy airport through which you can connect doesn't
automatically make it a terribly inefficient and costly operation.
Consider KLM with Schiphol. For decades, it has run an efficient
operation and connecting via AMS was considered a good thing.
> Easyjet and Ryanair have a lot of flights to/from London because a lot of
> people want to go to/from London.
And the legacies have large number of flighst to large USA ciities
because those cities generate a lot of demand. Same thing.
> entirely bypass London...that's the difference between the models. A
> hub-and-spoke carrier channels you through a hub for almost all flights.
An efficient airline has both. A bad airline forces you to travel
through a hub just to justify having higher frequency ona route to look
better than its competitors.
> Which they do two ways:
> 1) Increase aircraft utilization (quick turns, lots of flights)
> 2) Decrease connections
Decreasing connections does not make the airline more efficient from the
point of view of aircraft usage. If load factors are high, it does
reduce your per-pax costs since you save the costs of handling a
connection.
> fill a small plane for each of those destinations, that is considerably
> cheaper than using a small plane to get them all to a hub then another small
> plane to get them to their final destination.
That is *IF* you have enough passengers to justify this. And the above
works well for short haul domestic ops. But not necessarily for long
haul international flights because the smaller planes are much less efficient.
> That had nothing to do with route structure...Independance Air was using
> RJ's but selling tickets at 737/757 prices. It was economically impossible
> for them to succeed, since their ticket costs couldn't cover their operating
> costs.
And that says a LOT. Airlines have to admit that flying smaller planes
costs more. There are times where that extra cost is less than forcving
pax to connect, but there are times where the extra cost is higher and
it turns out cheaper to make passengers connect.
Just because the legacies abused the "hub" topology doesn't mean that
hubs are to be avoided at all costs. There are good uses for hubs ,and
there are good uses for non-stops between smaller cities.
> This ignores the fact that a baby jet flight + a big jet flight costs more
> (per passenger and per trip) than a direct medium jet flight.
This is slanted. Say Chicago generates demand for 90 passengers per day
to Shanghai, and Otumwah generates demand for 10 to Otumwah and 90 to Chicago
You run a 100 pax plane from otumwah to Chicago. This plane is full.
You run a 100 pax plane from Chicago to Shanghai. This plane is full.
If you run the non-stop from Otumwah to Shanghai:
Run a 100 pax plane from Otumwah to Shanghai with 10 pax (10% load factor)
Run a 100 pax plane from Otumwah to Chicago with 90 pax (90% load factor)
Run a 100 pax plane from Chicago to Shanghai with 90 pax (90% load factor)
So you end up with a lot of non-revenus seats on those flights.
> That's not really in question in certain realms. The industry has already
> figured out that feeders + jumbos is more expensive for trans-Atlantic than
> direct medium jets.
Wrong. US airline decided to foregoe the better efficiency of larger
jets because they want higher frequencies on their schedules, as well as
better fleet flexibility becfause it is easier to redeploy a smaller jet
to a different route. You can only justify a 747 on certain routes.
> That doesn't follow. Load factor (percent-fullness) is a function of
> frequency and demand, not route length.
Yes, but when you look at your costs vs revenus, you don't want to
operate your most expensive routes with low load factors. You want to
make sure your planes are full on those long routes where the fuel costs
are very high.
> You conveniently skipped over the double cabin crew for the A380, which is
> pretty much levels out the amount of people required.
Correct. Cabin crew is a factor on number of passengers. Pilot crews are
not. And when you look at support crews there are many backoffice
functions that are dependent on number of flights, not size of aircraft.
There are many that are dependant on the number of aircraft in the fleet
(maintenance, parking at airports, gate leases etc).
> 787. You can fill twice as many direct 787 flights from the same demand as
> you can A380 flights, which allows you to serve twice as many cities for the
> same capacity.
This assumes that the total demand to Shanghai (example) is split
evently between Chicago and Otumwah and you can run 250 opax flight from both.
But the reality is that the larger cities will generate much higher
demand for seats, so the demand is more likely to be 450 seats for
chicago and only 50 for Otumwah. So for a 787 only fleet, you need 2 for
chicago and one for otumwah (total 3). If you fly the otumwah pax to
chicago on exsiting commuter service, you don't need that 3rd 787 and
end up saving much money.
Now, if chigago generates 250 and Houston generates 250 pax to Shanghai,
then by all means, run a 787 non stop to Shanghai from each city.
> would, certainly, have lower seat-mile costs than a 787. But it would have
> higher trip costs plus you'd need more smaller planes (even smaller, hence
> less efficient than a 787) to feed the 747 so you'd have more connections
Not applicable in all cases. Consider New York London where AA's refusal
to fly bigger planes forces it to fly multiple medium size aircraft at
short intervals in the evening. Flying 2 787s will cost you more than
flying a 380. And in that particular case, it allows you to use your
landing slot at LHR for another city to get non stop to London.
Remember that New York City generates a lot of demand and operating an
A380 to/from JFK doesn't imply that most pax will be connecting.
> It's both. A pure 767 replacement (same size, same range, more efficient)
> wouldn't have sold as well as a the 787.
Boeing's 767 was eaten alive by the A330. If I recall correctly, the 330
had a HUGE advantage over the 767 in terms of the types of cargo
containers it could handle. And for all its popular 2-3-2 layout, it
was still a 7-across seating (compared to 6 for narrowbody) but with the
extra cost of a widebody. At one point, you need to have enough seats
per row to justify that second aisle.
> Just note that plenty of airlines
> are buying the 787 for new routes/capacity, not as 767/A330 replacements.
This is true for emerging carriers, but for established carriers, the
orders for the 787 have been to rejuvenate their fleets.
> They had no choice. If your competitor offers a direct and you offer a
> connection (because you have to, because you use hub-and-spoke), the only
> way people will take the connection is if it's cheaper. *Nobody* chooses a
> connection over direct when the price is equal.
The problem is that airlines match each other's fares and fares were
hightly artificial to begin with. And that is why airlines went belly
up. If an airline's costs are higher than another, then that airline
should not be matching fares.
The problem with legacy carriers is that their sole focus on having nice
schedules in CRS systems resulted in them funneling A-C trtafic via B so
that both A-B and B-C would then show higher frequencies even if A-C was
a large enough market to justify its own non-stop.
And also, by combinging an already frequent A-B with another frequent
B-C, you can offer (in the CRS) an A-B-C that is much more frequent than
if you had a single A-C flight per day.
The problem here is that going overboard with the hubbing isn't good.
Going overboard to avoid a hub schedule is also not good. There are
times where the hub at a major city is good, and times where it isn't.
Religion leads to extremes which aren't good. Southwest's 737s are OK
on average, but not optimal and prevents WN from serving certain city
pair types. The legacy's abuse of HUBs are bad. And AA/CO/DL's refusal
to fly bigger metal on intl routes is also suboptimal when you look at
the potential to lower seat mile costs alone.
The rise in oil costs may lead those airlines to rething their fleets
and obsession with providing high frequency at any cost because in the
end, having lower operating costs than your competitor is what will
count in the future.
> Then why in the world did Airbus do the A380 before the A350?
Airbus started the A3XX studies in the mid 1990s when the 330 was quite
succesful and Boeing was quite busy with its 777 and the 787 not even a
twinkle in Boeing's eyes.
Airbus had a gap in its product range, namely the jumbo. Boeing had
just filled its gap, namely the DC-10 class of aircraft with the 777.
Starting now, both Boeing and Airbus have full families from the 120
seat to 500+ seats. New models will replace existing ones from now on.
> demand is equal. Airbus also got the demand wrong, as they didn't meet
> their order target.
I'll reserve judgement for this in a few years. At 159 orders prior to
first delivery , the A380 isn't bad compared to other aircraft
introductions. It is the 787 that is really way out of line with
statistics with its pre-delivery success.
Once the beast start to fly this year and real operating statistics
become known, then we'll see how many airlines are interested in it.
Right now, they still have excuses to delay orders since they want to
see it in action before ordering. And as long as there are no new
orders, airlines don't lose by waiting since delivery slots remain the same.
Personally, I don't expect more than 10 orders per year starting in
2007.
> Since the A380 and 787 don't compete with each other, it's really a test of
> who guessed correctly on where the growth in the market will be.
"growth in market" can be misleading. Air Canada for instance isn't
really growing its fleet, it is replacing its 767s and A340 and 330s.
Because they alreadty have enough aircraft in each class, they could
accomodate growth by delaying retirement of a 340 while they wait for
delivery of an extra 777 from an option.
> Orders
> this year should make that clear, one way or the other.
Another thing to consider for the 787 is that it had a very unusually
succesful year last year, and even Boeing admits that this won't be
repeated this year. 787 orders should be quieter for the next few years
until first delivery. And the A380 orders *should* pickup in 2007
compared to 2005 and 2006 where there were basically no significant orders.
But there is no question that the 787 will sell more units than the
A380. It will also sell more than the 747, and I think that it will
also outsell the 777.
> problem becomes. If Airbus makes something that competes with the 787, it
> will be very difficult to keep it efficient all the way up to the 777's
> size, and vice versa.
Correct. However, if the efficiency improvements are really huge, it
could be possible to produce a stretched A350 which, while not as
efficient as the "right" 350 size, could still be more efficient than
the 777.
> cost. So far, Airbus has not been able to deliver this on a single one of
> their aircraft.
Sorry. The A320 definitely beat the 737 back in 1988 ( against classic
737s) and is still quite competitive against the 737NG. And the 330 beat
the 767.
> Sort of...the change in distance between the ground and fuselage from the
> "cigar" nacelles to the current ones was 4".
Wow. I expected a lot more. A boeing document shows a 10cm difference in
door1 sill height from ground between the -200 and the NG. That is 3.93
inches ... I was expecting a lot more. And I had figured that with the
NG, they would have raised the aircraft more so that engine nacelles
wouldn't have to be flattened for ground clearance.
Tom Sanderson
JF Mezei
> each sales campaign. Airlines are notoriously bad at keeping each
> manufacturer's proprietary data proprietary.
So, at the time Airbus launched the A350 V2.0, it would have already
known about Boeing loading more pax in its 787 than advertised ?
Seems to me that Airbus top management may have underestimated Boeing's
offering. So they came out with the "new and improved" V2.0. However, if
at that time, they already knew that even the V2.0 wouldn't be good
enough, they may have had reasons for still going ahead with it.
Launching the low cost V2.0 at the height of the WTO ugliness was
possible. Launching a really new V3.0 would not have been because Airbus
just couldn't have justified the total cost without very obvious
government help.
And once launched, it is probably much easier to just declare "cost
overruns" and produce the V3.0 from an already launched product and just
incrementally increase government help.
So, was Airbus really cleaver in this ploy which made them look bad in
the short term but which may pay off in the longer term ? Or was Airbus
really incapable of producing something better than Boeing ?
Only time will tell.
> Well, for a start you're completely ignoring tourism, which does generate a
> lot of international travel.
The problem is that tourism is seasonal. You can't justify year long
services betwen A and B if A's people only travel during 2 months of the year.
Large cities like London and New York will generate tourism year long.
But those are "hub" cities already.
> Well, it does depend on how we define "at least OK," but it wasn't nearly as
> bad until 9/11 killed demand and ramped the fuel price.
Prior to 9-11, some of the systemic problems of legacy carriers were
already showing. 9-11 forced the legacies to change faster than they
would have had without it. In fact, one could argue that 9-11 actually
helped the legacies because it gave them a very good reason to take
drastic actions that they wouldn't have been able to justify otherwise.
Air Canada and American were helped by 9-11 because they were both in
the process of digesting sick airlines (CP and TWA respectively) and
they were able to greatly accelerate the process. AC had made certain
commitments on staffing levels as part of its acquisition of CP, and
those commitments evaporated allowing AC to starts downsizing right
away. It also accelerated retiring of older aircraft. (same happened
with the USA carriers). One could also algue that the overweight legacy
carriers, without 9-11, wouldn't have had the motivation to make the
changes necessary to compete against the LCCs are would have suffered a
very long time
> That was not the intended comparison. Airlines are moving from 747 to
> 777/A340, and DC-10/MD-11 to 787/A350.
The main goal of the 777 was to fill the DC10/L1011 void that Boeing
couldn't fill before. And yes, the 777 was able to replace the older
747s, but it isn't generally seen as a 747-400 replacement.
When you look at BA, replacing a 747-400 with a 777 was downscaling due
to competition on a route reducing demand for BA seats.
> I wasn't talking about growth of family travel, I mean growth of economies.
> The growth of the Chinese ecomomy this year will generate more new potential
> air passengers than the increasing fuel cost will drive away.
True, but this may not be all international travel. And for
international travel, the chinese are likely to travel to large centres
where decisions are made.
And one has to be realistic about a small town's potential to export to
china. A small town in the USA or Italy isn't going to be able to export
shoes to china (unless the USD is devalued so significantly that US
products start to be competitive with chinese products).
Also, USA multinationals tend to have plants worldwide. Kraft doesn't
export cheese around the world, it has subsidiaries around the world
that make cheese locally. Same for the USA car makers. GM headquarters
generate demand for air travel to worldwide destinations. A GM plant doesn't.
So the big generators of demand in north america are the large centres.
> No, you're confusing available seat miles with capacity. The qualifier is
> *available*.
Did legacy carriers ever publish "capacity" numbers ? They most
certaintly wouldn't admit to shareholders that their fleet is bloated
and underused and that they are paying double digit percentage more
lease payments than necessary.
Analysts may have been able to make comparisons of say AA with WN,
stating that WN has X ASM with Y aircraft, while AA requires w% more
aircraft to have the same ASM. But AA itself won't reveal what its true
capacity might be if its schedule were as efficient as that of WN'.
> You have to use the "show only non-stop service" or the map doesn't tell you
> anything relevant...I thought that was clear. Relying on connecting
> services does not make you a hub carrier...
The WN route map does show however that a significant number of routes
involve connections, which kills the myth that WN is point-to-point only
with very little connecting traffic.
> carrier like Continental funnels *all* flights through a very small number
> of airports (typically two or three).
The way I see CO's route map is that they have chosen to serve 3 cities
really well allowing people in those cities to travel easily to the
destinations that each of those cities need. So CO wouldn't really be a
national carrier.
> structure will show you that this isn't the case for them. Connecting
> through an airport, even a busy one, doesn't make it a hub.
Technically it does, but not in the expected USA definition. In the USA,
"hub" means something exagerated like CO. But the real definition is a
place where you can connect.
For instance, Montreal is a hub. It isn't a strategic one for Air
Canada. But it still gets regional flights into YUL and from there,
people can travel to many destinations.
Toronto is a strategic hub for Air Canada because AC will bring
canadians to Toronto to have enough of a critical mass to justify
flights to destinations that Toronto alone couldn't justify. And this
includes AC marketing routes from USA to europe via Toronto.
You need to also look at a hub from an airline operations point of view.
When an airline has maintenance, crew etc bases in a certain city, it
makes that city a de-facto hub because it will want a portion of its
fleet to travel through the hub at regular intervals so that an aircraft
can be maintained or swapped with another one. Same with crews.
> *Having* to
> connect through a few airports, and the centralization of connections, is
> what makes it a hub.
We should agree to disagree on the definition of "hub". You have it in
the very pejorative sense, I had it in the functional definition.
One also has to look at the fleet makeup of an airline. Say CO operated
only 777s: betwene Otumwah Iowa, it could only justify one flight per
day, and that flight would have to go to a hub where all passengers
would then be dispersed on other flights to their destination.
If an airline has smaller aircraft, it can then have 3 flights from
Otumwah to 3 different destinations.
In the case of CO however, it is probably a game of CRS upmanship. Say
WN had 3 flights out of otumwah to 3 specific cities. CO comes in and
puts 3 flights from Otumwah to Houston. Fron Houston, it has high
frequency service to a gazillion cities. So on the CRS, CO can claim it
serves Otumwah better since passengers in Otumwah can travel to many
more cities in the USA and with more frequenct flights than WN.
If residents of Otumwah tend to travel in small numbers to a large
variety of cities, then you can't justify having flights to many cities,
but you can justify having service to a hub where passengers then travel
to the large variety of cities.
If the passengers tend to travel to a small number of destinations, then
you can have direct flights since your demand is more focused and can
justify the flights.
What you need is an agnostic route structure that doesn't "force"
passengers through an artificially low number of hubs or one which
refuses to hub and only serves a relatively small numb ero city pairs
because you can't justify serving more.
> No, it isn't. Take a look at Continental's route map...do you really think
> that every 90%+ of people flying Continental wants to go to Newark or
> Houston?
Yes, if 90% of customers either live in Continental or Newark, or
customers who travel to Newark or Houston.
One would have to look at an origin/destination for CO. If they truly
attract only Newark/Houston customers, then their route structure would
be very efficient because it would be point to point with only a small
percentage of passengers using CO to connect through Newark/Houston. Or
it could be the total opposite with few passengers originating or
terminating at a Newark/Houston, thus majority of tickets would be for
connecting flights. Or it could be a mix of the two.
> The characteristic of a hub, along with the stuff described above,
> is that a significant fraction of people are connecting through.
Jetblue started off with all its flights leaving JFK. It was a hub
operationally, except it didn't sell many tickets involving connections (initially).
Cincinatti is a "hub" in your pejorative sense. It has capacity/flights
that is orders of magnitudes larger than what the city itself generates.
But a hub at New York can justify itself with majority of demand coming
from new York and only a small proportion coming via connecting traffic.
I think one cannot fault all hubs abnd say all point-to-point is best.
You need to look at each situation individually.
Also, you need to look at load factors.
Say Delta has a Montreal-Atlanta as well as Atlanta-Los-Angeles flights.
Each flight get 75% load factors based on non-connecting pax. So if you
sell a couple YUL-ATL-LAX tickets, they are basically riding on seats
that would otherwise be empty and generating revenu.
On the other hand, if the majority of passengers on both flights end up
connecting through Atlanta, then it may not be such a good idea.
I think that the problem is that airlines start off with a small
percentage of customers using a hub to connect, and when it grows to a
point that could justify non-stops, they refuse to deploy them because
they don't want to end up reducing frequemcies betweens existing
city-pairs. Again, it is a a question of "religion". The "hub" religion
taken to extreme isn't good. But some hubbing is good.
> For the same load factor, it's also more efficient for utilization. The
> longer the airplane flies, the more efficient.
One has to compare revenu potential of one 100 seat aircraft doing a
shorter A-B 10 times a day, versus doing a long A-C once a day.
Does selling 100 A-C tickets on 1 flight generate more profits than
selling 1000 A-B tickets on 10 flights ?
I think that airline route architecture is quite an art and science,
balancing macro "big picture" with micro "individual routes" studies.
And you need to be willing to cut unprofitable routes.
> You're focussed purely on the efficiency...there is a lot more to it than
> that. A smaller jet has lower capital cost, lower trip cost, lower
> maintenance cost, and you can run it, typically, at a higher load factor.
What you need to look at is average revenu per passenger for a flight,
versus avareage cost per passenger for that flight.
And if on that flight, you have passengers who pay next to nothing
because you are selling a an A-B-C flight for the same price as A-B,
then that passenger is going to cost you real money on the B-C flight
and you should NOT be selling such tickets.
When an airline has to make a seat sale, it is because it has too much
capacity. And when those "below cost" tickets becomes more or less
permanent, the airlines permanently loses money and should instead cut
the flights and reduce overcapacity.
> If the legacy carriers really were just running medium wide-bodies to get
> their frequency up, you'd see them switching back to jumbos as their
> financial situation go worse. But they're not.
When youL're in financial trouble with long term leases, you can't just
ditch your 777s and replace them with 747s. This si especially true for
airlines who have traditionally been reliugiously opposed to big
aircraft because they were of the "high frequency" religion.
When you look at JFK-LHR, this is skeqed by the slots issue. An airline
that has 10 slots a day doesn't want to combine flights into fewer more
efficient ones because it stands to loose those valuable slots.
> connecting...then you should run a jumbo. However, two 787 flights, one to
> London and one to Manchester, costs you less than a jumbo to London and a
> puddle-jumper to Manchester.
Depends on where your flight originates. If it originates in Sydney
Australia, the answer will be different than if it originates in
Halifax. The halifax-london flight isn't very long, so the cost savings
of combining 2 planeload into one bigger more efficient flight don't
outweight the connecting costs. But for SYD-LHR, it is more cost
effective to oput all yoru pax onto a big long haul and then use puddle
jumpers to distribute the pax at the end.
> That's not a problem, that's free market. Airlines don't have a choice but
> to match fairs since, except in a few niches, they can't differentiate based
> on service.
But airlines shouldn't match fares if it causes them to lose money on
the passenger. In the end, it is called "dumping".
> What would be the optimal aircraft for their structure?
My point is that an airline which has a "single aircraft type" religion
can only serve certain types of routes at peak efficiency. And if that
airline has strict profit controls, it won't start routes which aren't
going to be profitable on that aircraft. So it is limited on the number
of routes it can profitably operate.
Westjet tried to serve Sudbury. It didn't have a problem admitting its
737s were too big and widthdrew from the route. An airline like Air
Canada would be more likely to just run a flight even if it is losing
money just so it can brtag about having more destinations than Westjet.
AC went though bankrupcy, Westjet didn't.
> All other things being equal, you should expect more unit sales as the
> aircraft get smaller.
However, one needs to keep an eye on this. Consider the CRJ-200. The
flying skidoo was an incredible success with Bombardier pumping out
large numbers. Now the 50 seater is out of fashion and Bombardier ceased
production on the plane just a few years later. Some say the 100 seaters
are the next "hot" fashion, but you don't hear about huge sales. In
fact, Bombardier shelved its 100 seater due to lack of demand.
The 737/320 market will be interesting. I think that saturation will
happen not long before Airbus/Boeing introduce the next gerneration of
narrowbodies, at which point, there will be a long term replacement
cycle.
When they introduce a new carbon fibre solar powered 737 in 10 years,
like for the 787, there will be a big rush of orders for people with old
fleets of 737/320s jumping in on the much more efficient aircraft, and
this will be followed by steady orders as other airlines progressively
replace their not so old fleets.
The bigger the efficiency difference, the bigger the initial rush of
orders. But the bigger the initial orders, the smaller the orders will
be in the following years. Once you've ordered enough 787s to replace
your 767 fleet, you're set for about 20 years. But if you replace only a
few 767s with 787s, you're likely to be placing more orders later on to
progressively replace your remaining 767s/330s.
And because the 787 presents huge fuel savings at a time of high fuel
prices, I think that there has been a rush of orders. Airbus HAS to be a
viable product on sale ASAP in order to get its piece of the pie.
Because once an airline such as Air Canada has placed enough orders to
replace all their 767s/330s, Airbus has no chance of a sale for the next
20 years.
And when new engines become available for the 737/320 class aircaft, I
suspect Airbus and Boeing will have nearly identical product offerings,
and in the end, the first to market with the better prices will win a
huge share of the "instant fleet replacement" cycle. Both 737s, 737NG
and A320 will be old by then, so there will be a huge replacement market.
> Although possible in theory, I don't know what's hanging out there on the
> horizon that could provide a "really huge" performance improvement that
> isn't already on the table for the A350 and 787.
If Airbus can provide one A350 that can fill both the 787 and 777
markets to some extent, then Airbus would have an advantage over Boeing,
especially since the 350 would have a big edge over the older 777. And
airlines could order a single plane type with Airbus, whereas with
Boeing, they need 2.
If Airbus can't match the performance of the 787, it can probably
compensate by also covering the 777 product where it can beat the 777
abnd provide "single airplane family" savings versus 787/777.
> We're crossing up two issues here. The A320 was 20 years newer than the
> 737-Classic,
The Classics dates from the mid 1980s. (-300 to -600). The 320 also
replaced the 727 for which Boeing didn'T have a real replacement.
> had an edge. However, when you compare equivalent era aircraft (as much as
> that's possible)
The 787 vs 350 is truly the first time Airbus and Boeing are pitted
fairly one against the other for similar products at the same time.
Remember that since the A320, Boeing has only introduced the 777 which
came a few years after the A340 with engines a whole generation younger.
Remember that until recently, Boeing was lethargic and just expected all
sales to come to it. So it was rather easy for Airbus to jump in with
younger products and carved itself 50% of the market.
> The A320 is competitive against the 737NG in the sense that they sell about
> equally well, but there are virtually no performance metrics were an A320
> beats an 737NG.
Is that really the case ?? I had been told that the NG was roughly
equal to the 320, winning on some route profiles losing on others.
matt weber
<jfmezei...@vaxination.ca> wrote:
>Tom Sanderson wrote:
>> each sales campaign. Airlines are notoriously bad at keeping each
>> manufacturer's proprietary data proprietary.
>
>So, at the time Airbus launched the A350 V2.0, it would have already
>known about Boeing loading more pax in its 787 than advertised ?
>
>Seems to me that Airbus top management may have underestimated Boeing's
>offering. So they came out with the "new and improved" V2.0. However, if
>at that time, they already knew that even the V2.0 wouldn't be good
>enough, they may have had reasons for still going ahead with it.
>
It is now quite clear that Airbus didn't have a good understanding of
exactly Boeing had done with the 787 until After they were de-briefed
by Air New Zealand. The loss of the sale to Air New Zealand in favor
of the 787 was a major shock to Airbus, and as they finally pieced
together what the 787 was all about, I am sure it was a very
unpleasant surprise, and the number of Airbus customers who have
defected in favor of the 787 has also been a very unpleasant surprise.
The big problem the A350 is going to have is delivery, if it really
back to square one, then first customer delivery is probably in the
2012-2013 time frame, by which time Boeing will probably have
delivered about 500 787's. So while the latest interation of the A350
may be a better airplane, it will enter the market so late, that it
may miss many of the opportunities.
As for A320 versus 737NG. Which is more attractive depends on the
financing, market place and missions you want to fly. The A320, and
particularly the A319 had a substantial range advantage over the
737-300, however the range advantage has been reversed in the NG, and
in fact the 737-700ER will fly the 'pond'. (the BBJ already does with
48 pax, although after Airbus re-worked the CJ319, it can as well).
737NG's already fly to Hawaii (a mission the A320 family cannot fly).
In fact JetBlue's A320's have a hard time making flying transcons even
with aux tanks with full pax load when the winds are very unfavorable.
The reality is the 737NG is now frequently deployed on missions the
737-300/400/500 couldn't realistically fly, and required a 757. Notice
that Southwest is now flying transcons!
Ken Rose
> They had no choice. If your competitor offers a direct and you offer a
> connection (because you have to, because you use hub-and-spoke), the only
> way people will take the connection is if it's cheaper. *Nobody* chooses a
> connection over direct when the price is equal.
I'm puzzled. If hub-and-spoke is more expensive, and you also have to
sell it cheaper, why did anybody ever use it?
Thanks
- ken
JF Mezei
The US government has begun to bark about potentially increased
government aid for a reworked A350.
And today, at the Berlin air show:
#
But Forgeard said a definitive decision had not been made.
"We have listened to some customer feedback on our way to making the
final definition of the A350 aircraft. Do not expect announcements now,
but I think I can say that definitive decisions should be made before
the Farnborough air show in July," Forgeard said at the Berlin air show.
#
So, Airbus has some good specs for a new plane, but are now working the
government aid angle and until this is done, they can't commit to the
A350 V3.0
BTW, EADS announced profits that were 19% higher profits in the first
quarter.
.
Tom Sanderson
Tom Sanderson
Clark W. Griswold, Jr.
>I'm puzzled. If hub-and-spoke is more expensive, and you also have to
>sell it cheaper, why did anybody ever use it?
Because when the choice is service vs no service, H&S does work. Secondary
markets like Cedar Rapids or Grand Rapids will not support many if any direct
flights to cities other than hubs. H&S makes it possible to support those cities
and you can extract a premium price for doing so.
As someone mentioned previously, the problem with H&S is when you use it to
connect cities that would support direct service and when you price a H&S
itinerary at less than the price of a direct flight.
Clark W. Griswold, Jr.
>It will be *really* interesting to see if Boeing and Airbus go the same way
>on composites or diverge with Boeing going to CFRP and Airbus going
>AlLi/GLARE. Both are probably viable models, but will drive the engineering
>expertise of the two companies in different directions such that it would be
>hard for them to come together again down the road.
As both Boeing & (to a lesser extent) Airbus rely more and more on subs to do
design and sub assembly, I think you are going to see less and less difference
in the technology of both companies.
While Spirit is still a Boeing shop, they are starting to make attempts to sell
to Airbus, and Airbus is really trying to bring Japanese suppliers on board. The
suppliers aren't going to be locked into technology exclusivity - so both primes
will get the best available at the time.
Makes sense if you agree that commercial aircraft are a mature technology...
dav...@gmail.com
Clark W. Griswold, Jr. wrote:
> Ken Rose <ken...@tfb.com> wrote:
>
> >I'm puzzled. If hub-and-spoke is more expensive, and you also have to
> >sell it cheaper, why did anybody ever use it?
>
> Because when the choice is service vs no service, H&S does work. Secondary
> markets like Cedar Rapids or Grand Rapids will not support many if any direct
> flights to cities other than hubs. H&S makes it possible to support those cities
> and you can extract a premium price for doing so.
>
> As someone mentioned previously, the problem with H&S is when you use it to
> connect cities that would support direct service and when you price a H&S
> itinerary at less than the price of a direct flight.
You also have to consider flight connections.
For BA, SAS, KLM - they run some relatively "esoteric" US routes which
rely on people feeding a lot of connection flights into their hubs.
Dave