I read a story from Forbes recently where the possibilities that the 787 opened up were discussed. Specifically, how new routes to China were springing up now that the 787 was available to do “long and thin” routes for airlines.
United Airlines opened up a thrice weekly route from San Francisco to Chengdu (in the interior of China) that is 6857 miles in length. Not nearly the maximum distance a 787 can fly but certainly a distance that isn’t flown often. That is the equivalent of flying across the United States from coast to coast 3 times.
The reason that route is possible is because the 787 delivers seat costs that are less than much larger airliners (777, 747, A380) despite it being able to seat just over 200 people. The United Airlines 787 seats just 219 people, for instance.
On that San Francisco – Chengdu route 40 years ago, the route would have been flown from San Francisco to some place such as Japan on a 747 where a smaller but still long-legged airliner such as the DC-8 would carry some passengers onwards to Chengdu, a distance of 2100 more miles.
That is the magic of airliners today: direct routes instead of spoke-hub–hub-spoke.
It’s why airlines do want range and the idea that airlines will accept less range for a cheaper vehicle is somewhat suspect in my opinion.
It’s why I believe that the A380 is a niche airliner and will forever be a niche airliner. Why should I fly from Dallas to Dubai to Mumbai on Emirates when I could theoretically hop on an American Airlines’ 787 and fly from DFW to Mumbai direct? (And very doable on the 787-9, I might add.)
This is the quiet revolution of the 787. It isn’t the carbon fibre or engines. It’s the very cost effective airliner for such routes.
I received a back channel question asking why all airliners are looking so alike now.
What the person was referring to was the fact that an A320 and B737 look, to the layman, almost exactly alike as do the medium and large widebody aircraft. It’s true, the Airbus A330 is hard to distinguish from the Boeing 777/767 series aircraft too.
The only semi-distinguishable aircraft out there are the Airbus A340 (production has stopped), the Boeing 747 and the Airbus A380.
But the question is why.
The answer is aerodynamics. As manufacturers strive to gain more and more efficiency out of their aircraft, their aircraft start to look more and more alike.
Simply put, it’s about function over form. When you design one of these aircraft, you don’t “style” it with something that goes against the aerodynamics of the airframe because such a thing could literally cost the user millions in fuel costs over the life of the airplane.
So, today, we have the Embraer E170/190 which looks a lot like how the Bombardier CS100/CS300 will look which looks a lot like the Airbus A320 series which in turn looks a lot like the Boeing 737 series. Because that shape works, we have the Airbus A300 which looks a lot like the Boeing 757/767 which looks a lot like the Airbus A330/A340 which looks a lot like the Boeing 777 which looks a lot like the upcoming A350 which also looks like the Boeing 787.
They all basically look alike with some slight differences and that is completely driven by aerodynamic efficiency.
It’s notable that the “odd ball” aircraft do not really survive past a single generation and don’t show up anymore. The 727 was out of the ordinary with Boeing and its T-tail configuration was only ever used once by them. The DC-10/MD-11 3-engine weirdness didn’t really last that long either. The DC-10 did but the MD-11 died a quick death. In fact, it’s notable that the MD-11 mostly died in popularity because it didn’t meet efficiency promises.
Oddballs don’t survive very long and those that do survive are driven in their function by physics.
United Airlines is in discussions with Airbus about the A350-1000 as a replacement for aging 747 and 777 aircraft in the United fleet. A significant portion of the United 777 fleet is comprised of very early build 777 aircraft (-200 series) and their 747s are particularly old as well.
United already has 787 aircraft on order (both on the Continental and United airlines sides of the house) as well as the A350-900. While Continental executives are largely in charge of the airline today, I would suggest that Boeing pay attention.
It would be tempting to say that this is United rattling Boeing’s cage to get going on the 777-X. I would agree that it has the secondary purpose of that but I also think United wants to know what it can get its hands on fairly quickly to replace a fleet of fuel inefficient aircraft that will begin to cripple profitability in a few years.
We’re not talking about replacing already old aircraft today, we are talking about replacing them in the 2018 to 2022 time period. By then, these aircraft will be extremely fuel inefficient compared to other US fleets and time is of the essence.
When your capital costs for such an airliner are greater than $200 million for a single aircraft in that class, you want to buy the very most efficient aircraft you can get. You want the best technologies because 20 years later, that is what you’ll be stuck with.
Whether Boeing thinks the current 777 lineup is still competitive on a spreadsheet, it is ignoring that it isn’t competitive in perception. I’ll put it simply:
A350-1000: New, efficient, modern, new
777-300ER: Older, somewhat efficient, somewhat modern, not new.
Boeing needs the 777-X and it needs it today and airlines are signaling to Boeing that if Boeing doesn’t build it, they’ll buy it from someone else.
Curiously, Boeing already got this message handed to them over the A320NEO. You would think that they had learned their lesson (again) and would be paying attention to airlines over the jumbo issue. US Airlines can’t afford to be just loyal to Boeing anymore. They must buy the best of the best and Airbus is the equal of Boeing in all categories.
If Boeing wants to sell some aircraft, it’s time to get authorization to offer and build a new range of 777 aircraft for its customers. Customers who’ve plainly said “If you build it, we’ll buy it. If you don’t, we’ll buy it from someone else.”
United Airlines CEO Jeff Smisek has recently made some comments about the airline and its fleet with particular attention to the 787.
Smisek notes that the range, efficiency and passenger capacity opens up new point to point routes for the airline such as Denver to Japan. These are the kinds of routes we can expect from US airlines who take on the aircraft and the 787-9 will be used to upgrade service on those routes originally developed with the 787-8.
Smisek also reiterates that United doesn’t see the A380 as an airplane for them (and I agree) and does acknowledge that the 747-8i is being looked at (but likely not very seriously) and notes that it has a lot of airliners on order. I strongly suspect that United would rather purchase the 777-X rather than buy either the 747-8i or A380. In addition, I think he sees a lot of aging 777 aircraft that would be better replaced with a 787-10 or 777-X as well.
But Boeing has slipped its authorization to offer plan for the 777-X to late 2013 or early 2014. Most think that Boeing doesn’t need to offer the 777-X now and that waiting to see the final definition of the A350-1000 will help them.
I think that you can’t lead in an industry from behind. Waiting too long for to see what your customer does leaves you playing catch up and if that customer delivers on its promise, it doesn’t matter what you can do to better the situation, people will buy what’s available.
If you think I’m wrong . . . just look at what Airbus pulled off with its A320NEO against Boeing who is still lagging behind and who has a “me too” offering at best.
Two senior QANTAS 747 pilots got into a heated argument over what data to input into a flight management system for takeoff. This occured on the QANTAS flight from DFW to Brisbane August 14. Ultimately, the flight was cancelled and set to take off the next day due to weather. However, it was determined that these two pilots could not work together and a replacement crew was sent. Both pilots are now suspended from duty.
Was this a safety of flight risk? Possibly. The environmental data one inputs into a modern flight management system determines things like take-off thrust and the speed at which an aircraft should lift off. On shorter runways, this can be criticial. On a flight like the DFW to Brisbane one, it is particularly critical since the aircraft will typically be fully loaded with a full fuel load. The flight is the longest that a 747 currently flies and is at the very edge of the range performance for a 747-400. On the other hand, DFW possesses runways that are extraordinarily long and even with a slightly incorrect performance calculation, a pilot would be able to adjust and continue the take-off or even reject the take-off if he/she sensed a problem.
But getting along in the cockpit is critical and this speaks to two pilots acting very unprofessional just prior to a flight where working as a team is what gets the aircraft to its destination. A destination that requires crossing 6000 miles of Pacific Ocean.
QANTAS is moving from 4 flights / week to daily flights in its DFW to Australia operations. QANTAS flies non-stop from Sydney to Dallas and non-stop from Dallas to Brisbane with follow on service to Sydney using the Boeing 747-400ER aircraft it has. Previously, it’s been reported that QANTAS load factors have typically exceeded 85% and that the flights have, at times, been load limited or range limited as a result of both passenger and cargo demand.
In other words, this route is *really* succeeding for QANTAS and is attracting a lot of American Airlines network feed. Most felt that this route would go to daily service fairly quickly and it has after about a year of service. My prediction is that the next step will be to add an A380 to the route. Think I’m crazy? I’m not.
The 3 class 747-400ER carries 364 passengers and travels the route at the very limit of its range. 85% load factor for that aircraft translates into about 310 passengers. If the aircraft is being load or range limited with those load factors, it sounds as if there is more demand than can be supplied by the 747-400ER. An A380 can supply 450 seats, ample cargo capacity and has more than ample range to fly DFW-SYD and SYD-DFW without being load limited or range limited at all. 310 passengers equates to 69% load factor for the Airbus A380. If QANTAS continues to stimulate demand and work well with AA making DFW a gateway city to Australia (which is very attractive to east coast residents), an A380 absolutely could be justified as the next step.
QANTAS is deferring delivery of 2 Airbus A380 aircraft until the 2016 and forward time period in an effort to lower costs in order to compete more successfully with Virgin Australia.
It’s a bit of a blow to the A380 program in some ways and it adds to the pain of cancelled orders from China for the A380 as well. However, Airbus will be able to deliver the aircraft to other airlines at present. I suspect that airlines with a substantial A380 fleet are finding the aircraft quite successful on the routes it can be deployed on and I know that Lufthansa regards it as having lower seat mile costs.
However, I continue to believe that there are only so many routes it can be deployed on to earn regular profit. QANTAS would take delivery of these if there was enough demand as they are replacing aging 747-400 aircraft. Lower seat mile costs are great but only if you can fill the aircraft regularly all year round.
I’m not sure all airlines are doing a very good job with that and Lufthansa’s choice in having both the 747-8i and A380 kind of speaks to the fact that while seat mile costs are important in the equation, filling the aircraft is just as important. A full 747-8i earns more money than an A380 at 85% load factor.
The A380 will continue to sell . . . slowly. It will continue to be delivered and it will continue to get deployed on various routes but it remains a niche aircraft at best. That’s OK, so is the 747-8i. The real profit earners going forward are going to be the 777 series from Boeing and the A350 from Airbus.
Singapore Airlines is going to offer a final, special round trip flight between Singapore and Hong Kong to say goodbye to its passengers 747-400 fleet on April 6th. Singapore has replaced its fleet of 747-400 aircraft with 777-300ER and Airbus A380 airplanes although it will continue to operate a cargo fleet of 747-400s.
Singapore has had a long history with the 747 and despite many wondering if they’ll take on the 747-8i, I do not think they will. This airline has enough capacity and it is the one airline that continues to succeed with the A380 in every way. Furthermore, the 777-300ER is more than capable of filling the roles found underneath the A380.
The future is more direct flights and the A380 and 747-8i are airliners that serve massive trunk routes better. There are only so many of those routes so I suspect airlines will focus on one or the other aircraft despite the fact that Lufthansa isn’t going to do that. I’ll point out that Lufthansa also still operates A340 aircraft instead of 777s. It’s the exception that proves the rule, really.
This is the first real goodbye for the 747 but it won’t be the last. I strongly suspect we’ll see this happen at QANTAS some time soon as well, for instance.
I’m not sure we’ll see much in this territory for SkyTeam or Star Alliance. They’ll continue to succeed and be smart in their attempts to gain more dominance in more parts of the world. I think Oneworld is going to be smarting through this next year as a function of health problems at founding members American Airlines and QANTAS. I also think that gaining the LATAM membership is not nearly as “sure” as they think it is.
The Middle East
After ordering an insane amount of widebodies in 2011, Emirates will order another insane amount of widebody aircraft and beat up on Boeing about its 747-8i. This has begun to feel like an addiction problem.
The airline industry in India has imploded and we’re just watching the mushroom cloud of debris settle. For 2012, more explosions and more governmental heads will push even deeper into the sand. Air India has already become the new Alitalia.
The Far East
Chinese airlines will order more aircraft and I expect we’ll see orders from them for 777s and A380s and possibly some A350s. Not unlike 2011. I don’t think we’ll hear about any stunning orders from that part of the world, however.
China will tout its COMAC C919 even harder and most of us will try desperately to keep from laughing even harder. Ryanair will back away from this aircraft quietly, I think.
Japan will find ANA deploying more and more 787s on more and more routes with more and more success with that aircraft. JAL will take delivery of its 787s and find that they not only work well for JALs needs but actually exceed expectations. I think we’ll see an order for some more Boeing aircraft from JAL this year and I think it will be the 737MAX and 777-300ER. No huge numbers but large enough to make a splash.
LATAM got its approval from Brazilian and Chilean authorities (barely) and LATAM will begin consolidating its operations to make more money. I think we’ll see a largish order from LATAM and it will be for an airliner to replace aircraft on both the Brazilian and Chilean side of the airline. The aircraft of choice will be, I think, the Airbus A320NEO and I think they’ll bump up orders for the 787 and 777 as well. TAM has 27 A350-900s ordered and I think that order *might* be at risk. The strategy of using Airbus for narrow bodies and Boeing for wide bodies seems to be a smart one for airlines in that region.
I don’t think we’ll see more consolidation in South America but I do see South America becoming a bit of a battle ground between airline alliances. Most see LATAM going with Oneworld and while I can’t disagree with the arguments, I think that SkyTeam and/or Star Alliance might just swoop in with one hell of a package that may be too hard to resist. If this happens, Oneworld and American Airlines gets kicked in the groin in South America.
Aerolineas Argentinas? The Alitalia of South America in 2011 and the same in 2012. Enough said.
British Airways managed to get through 2011 without any huge problems and saw Willie Walsh move up to the CEO position of International Airlines Group which means Willie’s still in charge. Iberia, British Airways’ sister airline, saw Willie stirring things up with plans for a LCC subsidiary. Iberia pilots decided to strike because shooting onself in the foot can’t be just an Indian thing. IAG also managed to get a tentative deal to buy BMI from Lufthansa and become the Emperor of slots at London Heathrow . . . maybe.
Virgin Atlantic didn’t die, didn’t find new partners and didn’t extricate itself from the chokehold that Singapore Airlines has on it. Richard Branson actually didn’t make the news very often except to shout, stamp his feet and act insulted that Virgin Atlantic wasn’t able to do a deal to win BMI. Expect Virgin Atlantic aircraft to start carrying some message against the IAG deal for BMI. I actually think that Virgin Atlantic will have to find an airline alliance to join and if I’m right, I would lay very heavy odds on it being the Star Alliance.
Lufthansa did itself a favor and got rid of BMI and I expect they’ll continue their very conservative mangement of the airline and the subsidiary airlines. I do wonder how much longer Lufthansa can rely upon its A340 aircraft and somewhat expect Lufthansa to bite the bullet and buy the 777.
KLM/Air France: I see nothing here at all. Not in 2012. I don’t expect a large widebody order nor a narrowbody order.
I do expect Ryanair to make an order and I do think it will be the 737MAX. In fact, I think it may well end up being the 737MAX-9 instead of the 737MAX-8. Instead of repudiating the C919, Michael O’Leary will just quit talking about it. Instead, he’ll suggest stripper poles could be installed on Ryanair aircraft.
All in all, I think it will be a tough year for European airlines. The financial crisis on that continent will make it very hard to earn an honest profit and Middle Eastern airlines will continue to erode the long haul traffic that European airlines have enjoyed for decades.
Tomorrow, a summary of what I see for 2012 and the world airline industry.
I got asked what I thought of the A340 last week by a reader of FlyingColors and decided to give some thought to that subject and write a post.
The truth is, the A340 was probably the first Airbus aircraft that I really liked visually. I liked the slender appearance of the widebody fuselage and I liked the four engines and how they were hung on the wing in a proportion that just seemed a bit sexier than other 4 engine aircraft.
I liked Airbus’ approach to the A340/A330, too. I’ve always been fond of the parts bin approach to creating value for a customer and the A330/A340 development was certainly that.
A fuselage that got borrowed from its first twin-aisle aircraft and CFM engines that were derived from the A320 aircraft. Need a medium range hauler? Use our A330. Need a long range widebody? Try our A340. Going trans-Atlantic? Use our A330 and if you’ve got trans-Pacific routes, we have this lovely 4 engine aircraft for you.
And you got to have pilots that could fly both.
It was a beautiful approach and a real answer to what was needed at the time. It was way better than McDonnell Douglas’s offering in the MD-11 and Boeing really didn’t have an aircraft that even fit the needs at all.
ETOPS was changing the game at the same time, however. So was engine development.
The MD-11 was a bit flawed in that it really needed a truly new wing and better engines to achieve its mission. But the ever frugal derivative player, McDonnell Douglas, played things just a bit too frugal.
The 747 was simply a different class of aircraft. The 767 was too small and too short ranged to fit the gap.
Airbus did a great job with those aircraft in offering a sweet spot solution for both capacity and range and then made a strong business case for both of them by making them as common as possible. You cannot blame any airline who went that route. It was, in the context of the times, the perfect solution.
What we didn’t really count on was engine manufacturers being willing to truly make game changer engines and ETOPS going far past anything anyone could envision. The 777 was born and it was an even bigger game changer. First an aircraft that solved the A330 problem just a little bit better. Not fantastically better but it offered just a touch more capacity and bit more cargo capacity and it did it with engines that were more revolution than evolution.
The A330 has survived because of its improved derivatives and any airline using them makes great money.
The A340 got hampered by a few things. It needed a bit better wing and better engines (and finally got both in the A340-500/600). The CFM engines were a great choice going in but the Rolls Royce Trents were the answer to a question that got asked a bit too late.
Airbus bet on 4 engines being preferred for long haul, trans-oceanic routes and given the dominance of the 747 in that market, it wasn’t a bad bet. Their mistake was in underestimating Boeing’s ability to look forward. Boeing saw the possibilities in ETOPS and extra high by-pass engines that were more reliable than anyone could have conceived of a generation earlier. And it should have given its customer base at the time.
Airbus was hampered by a bit of McD disease and by multi-government ownership at the time. It didn’t have enough capital to go “all in” on designs and knew it had to make its business case on flexibility which meant derivatives. In fact, it often only got capital for new investment if that investment benefitted its owners in the form of jobs programs for their citizens.
While thinking about this post, it occured to me that Airbus even produced a 747-SP. The A340-500 derivative. It could fly fantastic distances but without enough passengers to make it cost effective. Then the 777-200LR came along and was capable of doing *that* mission better and cheaper.
The 777-200ER and 777-300ER killed the A340 in all forms (And EADS CFO just admitted it in the press). It could haul more passengers and cargo for the same or longer distances for less money. It was that simple. Boeing made the business case on trip costs and won.
Even if hindsight is 20/20, you can’t say that Airbus made a mistake with the A340. The A340 killed the MD-11 and exposed the weaknesses of owning 747s. It did its job very well but it arrived just a little bit too late to enjoy its success for very long. Timing is everything.
I would criticize Airbus for the A380. Yes, it has made a few airlines some good money. It also ignores the model(s) for long haul travel over the broad spectrum in favor of trunk routes. It will never enjoy the numbers or prevalence of the 747. On the other hand, neither will the 747-8i.
I’m not sure the A350 is the answer either. I don’t think it fits long, thin routes as well as the 787 and its planned derivatives. I don’t think it fits the long, large capacity routes quite as well as the 777 either. Its smallest derivative is an A330 replacement at best and I question whether or not it will ever get built. Its largest derivative so far doesn’t respond to the 777-300 as a game changer either. They are free to prove me wrong.
It’s not that I think the A350 won’t sell. It will. But I think it’s destined to be a player among a fairly small core group of airlines. Much as the A380 is and will be. Boeing took a page from the Airbus playbook and built the 787 to fit a nice, broad piece of medium and long haul routes and positioned itself to answer the largest A350 with a next gen 777 or next gen new build large capacity, widebody aircraft.
Boeing one ups Airbus over the next 20 years with its product line up and does it in a way that has the gaps covered in distance, capacity and service.
With all of that said, I still think the A340 is one hell of an elegant and pretty airliner. It lends itself to the great airliner liveries of the world. Just look at these:
(All images from Flickr under their Creative Commons License)
So, here is some interesting news. According to the Sydney Morning Herald (Australia), QANTAS is finding its 4 times a week flights to the DFW area using a 747-400ER as both successful and profitable. The airline began the flights just 3 months ago and is already seeing load factors in the 90% range (with about 80% of that load being leisure and 20% corporate/business.)
There have been a few diversions to South Pacific locations for refueling due to adverse headwinds but none recently. There have also been a few complaints about luggage being delayed due to load limitations. Both because the route is on the outer limits of the range offered by the 747-400ER.
If the success is as good as claimed by Qantas NSW regional general manager Peter Collins says it is, I wouldn’t be surprised if QANTAS either changed the service to an A380 in the future or if it added 6 or 7 times a week frequencies. QANTAS has already said that when its 787s become available, they’ll likely service the route with multiple daily frequencies.
QANTAS has both 787-8 and 787-9 aircraft on order but I would expect that the aircraft they’ll want to use is the 787-9 (provided the range promised is delivered) and that means a long time from now. In the meantime, the A380 can offer as much range with greater capacity as the 747-400ER for this flight when it can operate its aircraft with the uprated Rolls Royce Trent engines at full thrust again.
In any case, it’s good to see QANTAS succeed with this route and I look forward to seeing it developed even more as time goes by.
Delta Airlines and Virgin Australia have gotten their approvals for an anti-trust immunity agreement to cooperate across the Pacific between the United States and Australia. They did so, in part, by promising to keep up frequencies between the two countries.
This doesn’t mean that routes won’t be rationalized. The frequencies will stay the same, the routes won’t. These two airlines will deploy their 777 aircraft on routes that are complimentary rather than competitive. Expect V Australia 777s to start arriving in San Francisco to replace QANTAS’ recently withdrawn flights.
Delta’s 777-200LR aircraft can potentially make the flight between Atlanta and Sydney (although with a touch of payload restriction) and provide competition to QANTAS’ new 747-400ER flights to Dallas/Fort Worth.
And for the first time, there is real competition for the QANTAS/British Airway/American Airlines Oneworld consortium. Virgin Australia can provide domestic connections to Delta in Australia and Delta can provide domestic connections to Virgin Australia in the United States.
John Borghetti, CEO of Virgin Australia (and formerly an executive with QANTAS) has made it clear that he intends that Virgin Australia be a strong competitor with QANTAS rather than an constant underdog and he has experience with building networks as a result of working for QANTAS for many years.
Look for quite a bit of new competition on routes between the United States and Australia and I think United is going to be the airline to take the hit. United has pretty old aircraft with a pretty old service product and no partners in Australia to assist with feed. They also have no new large widebody aircraft to carry passengers with either although they will have the 787-8 with which they can start direct flights to New Zealand and Australia from cities in the United States that have never traditionally seen direct flights.
Evidently, there are rumours that British Airways may be giving the 747-8i a second (third?) look suddenly. The airline made orders for the A-380 and 777-300ERs instead a few years ago but now there is strong speculation that they are revisiting their fleet plans for the future.
At the time, the A-380 made sense and even today it still does to some degree. It’s a strong airliner and a proven earner now that we’ve seen several in a variety of fleets. But British Airways circumstances have changed and I think that might be what is driving these rumours.
British Airways has now “merged” with Iberia and they also have their trans-Atlantic partnership going on with American Airlines and other Oneworld partners as well as a strengthening partnership in Oneworld to the Far East and Australia. So why does the 747-8i make more sense?
Seats. The A-380 has an advantage *if* you can fill its seats. That’s a tougher prospect today. Even more difficult is the fact that the A-380 doesn’t offer a lot of flexibility on routes it can be deployed on. In fact, with the new Oneworld frequencies between JFK and London Heathrow, it doesn’t make sense.
At the same time, nor does the 777-300ER quite fill all the needs either. It is perfectly adequate for filling the role of older 747 routes but it isn’t quite up to the challenge of providing enough seats (in BA’s configuration anyway) one some of those routes where BA/IB/AA are partnering. The 747-8i offers enough seats and the promise of a high load factor that makes it potentially more cost efficient to fly.
It’s also a bit more flexibile on what airports it can fly to than the A-380 as well as the fact that it is just plain cheaper to buy and potentially cheaper to maintain. In the modern airline world, that’s real money to be saved.
Will they re-visit the idea of buying the 747-8i? I suspect they will at least take another long look at it internally and now is the right time. The 747-8i is quickly compiling hard data for airlines to look at and the airline will have some hard route data of its own in the near future. How seriously it will be considered is anyone’s guess.
Right now, BA is looking at operating the 787 soon, it has the 777-200ER, 777-300ER, 747-400 and orders for the A-380. That’s a lot of widebodies of varying types and styles. To add the 747-8i to the mix really, in my mind, requires thinning out that mix by one type.
So, yes, I wouldn’t be surprised if they took a long, hard look at it internally. I would, however, be surprised if there was an order in the next 12 to 18 months. Downright shocked, actually.
Last week, Delta announced that it had agreed to buy 9 Boeing (McDonnell Douglas) MD-90 aircraft from JAL. After these aircraft are refurbished, they’ll start entering Delta’s fleet next January. Delta’s President, Ed Bastian, refers to these aircraft as “capital efficient” for Delta and it does simply add to Delta’s existing fleet of 19 aircraft. In fact, Delta now plans to add a total of 39 MD-90 aircraft going forward. These will primarily replace aging and inefficient DC-9-50 aircraft.
Capital efficient means that the cost to acquire these aircraft combined with the remaining lifecycle costs including fuel makes them worth operating for Delta. In addition, these aren’t your grandfather’s DC-9s. These aircraft have current generation IAE V2500 engines that are fairly fuel efficient compared to brand new aircraft presently. They also replace fuel guzzlers and represent a net gain going forward as long as fuel prices remain somewhat stable (and by stable I mean out of the $4/gallon territory.)
Delta has so far pursued a strategy of making do with what it has and employing older aircraft longer and this is somewhat in conflict with most other airlines’ strategies. As fuel has climbed in price over the past 4 years, airlines have, if anything, accelerated their purchases of newer, more efficient aircraft.
Is this the right strategy for Delta? Well, as an interim strategy, it works. These aircraft are good for a variety of routes that can largely transit 3 timezones out of 4 in the continental United States. There are a finite number of them available (only a bit over 100 were ever built) and in the near future I suspect that many won’t be worth buying when considered against a new Boeing or Airbus aircraft. From a financial standpoint, these are good buys for Delta and should work for them well over the next 4 to 8 years.
Delta’s fleet is pretty varied since its merger with Northwest Airlines a few years ago and while they have made an excellent show of managing this fleet, there are a number of types that could be pared down over time. Reducing the number of fleet types would allow Delta to be even more flexible with its crew resources and more cost efficient when it comes to maintenance needs. Remember that every fleet type requires an inventory of parts and employees trained to service that fleet type.
This doesn’t mean that I advocate that Delta buy Boeing only or any other manufacturer exclusively either. With its fleet size, it could quite rationally settle on both the Airbus A320 and Boeing 737 aircraft and operate them simultaneously. The same is true for long haul aircraft. It could probably employ both Embraer and Bombardier regional jets as well. However, for each category (regional jets / single aisle / medium to long haul aircraft), there should be at most two basic fleet types.
In fact, by working with multiple manufacturers, it can speed deliveries, fit the most perfect aircraft to a variety of routes and maintain efficiencies in maintenance and repair at the same time. What I don’t see happening is Delta operating Boeing and Bombardier CSeries as mainline aircraft. I think Delta will play it smart and use the manufacturers that have proven products in each category.
I think that over time, we’ll see Delta order Airbus A320NEO aircraft to replace existing aging Airbus A320s. I think we’ll see an order for Boeing 737 replacement when and if Boeing offers a replacement officially. I think we’ll see Bombardier CRJ900/1000 aircraft come online to replace older CRJ700/900 aircraft and I think we may well see Embraer E170/190 jets for other areas of the country such as shuttle-like operations. In the long haul category, it’s not inconceivable to see 787 orders pulled forward again but for a mix of both 787-8 and -9 aircraft. I think we’ll see them pick either Airbus A350s or 777s for their larger trunk and long haul routes. I might give the 777 an advantage here to become a single type for that category as Delta could very efficiently operate both 777-200LRs and 777-300ERs in a nice mix. They’ve already got very new 777-200LRs (and ERs) that are using the same GE engines the -300ER would use. I’m not sure the Airbus A350 quite fits in as well as one would like it to when it comes to the trunk route / long haul category. I do believe firmly that the 747s will ultimately go away and not be replaced.
Look for Delta to be making more and more announcements about its fleet over the next 2 years. I believe its strategy will be incremental rather than huge orders for a particular family of aircraft and it will be done with strong emphasis on preserving its capital going forward into the next few years.
Lately, it seems like QANTAS has all kinds of engine failures all over its fleet. Is it because they’re not maintaining them? I seriously doubt that. You have to consider how QANTAS uses its 747 and A380 fleets.
QANTAS is somewhat unique in that many of the routes it flies are not just exceptionally long but also exceptionally full. This means the aircraft are being operated at their maximum performance far more often than virtually any other airline is required to do. These aircraft are fully loaded with people and fuel and then must use maximum take-off performance in order to loft themselves into the sky for flights that have durations inexcess of 14 hours.
That puts a lot of wear on engines that other airlines just don’t suffer.