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What's The Wisdom Behind LHs Fleet Policy?  
User currently offlinefraapproach From Germany, joined Oct 2010, 57 posts, RR: 0
Posted (3 years 8 months 5 days 23 hours ago) and read 11112 times:

Hi Folks,

I am seriously wondering about the wisdom behind LHs fleet policy as they tend to accumulate a substantial amount of relatively unsexy assets like the A 340-600, the 747-8 and the recent announcement to invest into the FRA based 737 classics.

When I say unsexy for the 346 and the 748 I mean their second hand value as they will be difficult to sell as their operator-base is fairly small (obviously almost exclusive for the 748) and at least for the 346 the trip economics are not up to par with the compareable 777 variants which means their value will be impaired for more than one reason.

And for the 747-8I lets just assume Boeing only sells and produces those 33 frames to LH and KE - would it really be a wise choice to have it in your fleet for 10-20 years? Further it would be almost impossible to sell the birds (at least at a decent price compared to the investment) and operating costs could be substantial due to expensive spares, crew training etc, custom infrastructure.

For the 737 classics I just wonder how much life is still left in them and more important how competitive in terms of customer experience they will be by the middle of this decade, especially for a quality carrier like LH.

When I compare LH to some European, American or Asian competitors like BA, AF, EK, SQ, CX, AC I am really wondering about LHs policy as some either/or have a substantially younger fleet, phase out aircraft more quickly, operate less types and mostly follow one stereotype: Most of the fleet is made up by one workhorse like the 777, A 320s or contemporary 737s. For me LH really stands out with their fleet mix.

I am interested in your thoughts about this topic! Anybody who shares my views?

thanks - fraaproach

Btw: the opposite is true from the standpoint of an Aviation enthusiast.

23 replies: All unread, jump to last
 
User currently offlinealoges From Germany, joined Jan 2006, 8702 posts, RR: 43
Reply 1, posted (3 years 8 months 5 days 22 hours ago) and read 11067 times:

I'd like to point you in one direction: look up the launch customer for the Boeing 737 and its initial popularity.  

As for the rest, success doesn't depend just on what you have, but also on how well you use and maintain it. I don't agree that sexappeal is an important factor in aircraft acquisitions, nor do I agree that the A340-600 is uneconomic as you seem to imply.



Walk together, talk together all ye peoples of the earth. Then, and only then, shall ye have peace.
User currently offlinedl767captain From United States of America, joined Mar 2007, 2539 posts, RR: 0
Reply 2, posted (3 years 8 months 5 days 22 hours ago) and read 10986 times:

Quoting fraapproach (Thread starter):
I mean their second hand value as they will be difficult to sell as their operator-base is fairly small (obviously almost exclusive for the 748) and at least for the 346 the trip economics are not up to par with the compareable 777 variants which means their value will be impaired for more than one reason.

The 748 will likely do well as a converted freighter later on if not a passenger version. As for the A340 vs. 777 I don't know when LH purchased the A340s but could it have had something to do with ETOPS being fairly new and them already having the A340-300s?

Quoting fraapproach (Thread starter):
And for the 747-8I lets just assume Boeing only sells and produces those 33 frames to LH and KE - would it really be a wise choice to have it in your fleet for 10-20 years?

Why not? If it fits the routes LH wants them on, basically something smaller than the A380 but bigger than the curren 744 or A340 then why would it not be a wise choice to keep a 20 aircraft fleet of them for 10-20 years?

Quoting fraapproach (Thread starter):
Further it would be almost impossible to sell the birds (at least at a decent price compared to the investment) and operating costs could be substantial due to expensive spares, crew training etc, custom infrastructure.

they could try and sell them to carriers with the 748F who could possibly convert them. You can ask the same thing about the A380, who wants to buy a second hand whale jet that requires crew training, expensive spares, and custom infrastructure.

Quoting fraapproach (Thread starter):
For the 737 classics I just wonder how much life is still left in them and more important how competitive in terms of customer experience they will be by the middle of this decade, especially for a quality carrier like LH.

I'm assuming they will keep going just like the Delta DC-9s. As long as the interior is upgraded and kept looking new I don't think it really matters how old the actual aircraft is. But I am surprised they aren't just replacing them with A320s


User currently offlineLHCVG From United States of America, joined May 2009, 1554 posts, RR: 1
Reply 3, posted (3 years 8 months 5 days 21 hours ago) and read 10866 times:

Quoting fraapproach (Thread starter):
And for the 747-8I lets just assume Boeing only sells and produces those 33 frames to LH and KE - would it really be a wise choice to have it in your fleet for 10-20 years? Further it would be almost impossible to sell the birds (at least at a decent price compared to the investment) and operating costs could be substantial due to expensive spares, crew training etc, custom infrastructure.

To add to the above responses to this point, I would just add that it can be like the 77L fleet at DL, for instance, where it serves as a niche subfleet with special capabilities (i.e., the aforementioned gap between the 380 and 744 and/or 346). It's not like they are just buying a couple so it's probably a reasonably sized subfleet to warrant keeping around.


User currently offlineluv2fly From United States of America, joined May 2003, 12090 posts, RR: 49
Reply 4, posted (3 years 8 months 5 days 21 hours ago) and read 10837 times:

Also look at how well LH keeps its planes! They never had the A300 problems that plauged AA....


You can cut the irony with a knife
User currently offlineLHCVG From United States of America, joined May 2009, 1554 posts, RR: 1
Reply 5, posted (3 years 8 months 5 days 16 hours ago) and read 10352 times:

Quoting luv2fly (Reply 4):
They never had the A300 problems that plauged AA....

I've always wondered why AA seemed to have so much trouble yet others like LH, and probably FX and UPS apparently haven't. Is it just simply an issue of shoddy mx on AA's part?


User currently offlinerolfen From Germany, joined Jan 2006, 1807 posts, RR: 2
Reply 6, posted (3 years 8 months 5 days 15 hours ago) and read 10220 times:

I thought Lufthansa had 777.

[Edited 2010-12-25 14:05:35]


rolf
User currently offlineMWHCVT From United Kingdom, joined Oct 2008, 695 posts, RR: 0
Reply 7, posted (3 years 8 months 5 days 13 hours ago) and read 9976 times:

I have a question that has be rattling around in my vacant space where my brain used to be, the question is simple, what is the fuel burn on average per kilometer for comparable 777 and 340, I assume that the 777 engines are vastly more powerful per engine than the per engine power of the 340 engines, so I would therefore make the assumption that one 777 engine would burn more fuel than one 340 engine, but how much?

Matt
MWHCVT

P.S. I am aware that Assumptions are the mother of all F... ..'s



Must think up a new one soon, slow moving brain trying to get into gear ;)
User currently offlineLHCVG From United States of America, joined May 2009, 1554 posts, RR: 1
Reply 8, posted (3 years 8 months 5 days 13 hours ago) and read 9692 times:

Quoting rolfen (Reply 6):
I thought Lufthansa had 777.

LH does not have the 777, but Aerologic, the Lufthansa Cargo subsidiary/spinoff (not sure which) has 77F's. OS does have 777s it inherited from Lauda, so technically the LH Group has 777s, between OS and the AeroLogic freighters, but not LH the airline itself.


User currently offlineplaneguy727 From United States of America, joined Mar 2007, 1247 posts, RR: 1
Reply 9, posted (3 years 8 months 5 days 12 hours ago) and read 9522 times:

Solid airframes like the 737 classics still have a good supply of parts and maintenance talent around. Thus an carrier like LH that owns them has the talent to keep them in great condition. And since they are likely long since paid for, the cost of keeping them up is less than the costs of acquiring a whole fleet of new a/c. Outside of we the a.nut crowd, most price sensitive pax won't know the difference.

We've had the DL(NW) DC-9 debate, the US not growing the E-190 to retire 737 classics debate, etc over and over here. LH feels like it is most prudent fiscal decision of the airline. And think of it this way - we can look forward to chances to fly more 737 classics before they are retired, scrapped, or relegated to one off carriers in random parts of the world.



I want to live in an old and converted 727...
User currently offlinelhrnue From United Kingdom, joined Jun 2010, 162 posts, RR: 0
Reply 10, posted (3 years 8 months 5 days 11 hours ago) and read 9184 times:

For the 747-8 LH got a very good price from Boeing in the first place. Furthermore having this version of 747 in the own fleet, LHR Technik will keep its position as one of the leading maintenance companies for 747's and the first address for the operators of the cargo version. And as we all know LH Technik is one of the cash cows in LH.

User currently offlineiainbhx From United Kingdom, joined Dec 2008, 242 posts, RR: 0
Reply 11, posted (3 years 8 months 5 days 11 hours ago) and read 9094 times:

As someone who ends up on LH's 733's and 735's fairly often, I will say that they are very clean and doing good service. I don't see why they should get rid of them.

Shockingly enough, at least amongst C-class passengers, the 343's and 346's are often preferred to the 744's because of the lack of a middle seat.



iainbhx
User currently offlineAirlineCritic From Finland, joined Mar 2009, 701 posts, RR: 1
Reply 12, posted (3 years 8 months 5 days 5 hours ago) and read 7671 times:

Quoting iainbhx (Reply 11):
Shockingly enough, at least amongst C-class passengers, the 343's and 346's are often preferred to the 744's because of the lack of a middle seat.

And because of the quiet environment.


User currently offlinejwenting From Netherlands, joined Apr 2001, 10213 posts, RR: 18
Reply 13, posted (3 years 8 months 5 days 5 hours ago) and read 7584 times:

Quoting fraapproach (Thread starter):
relatively unsexy assets like the A 340-600

LOL. Few years ago a.net was positively drooling over those  



I wish I were flying
User currently offlineflyglobal From Germany, joined Mar 2008, 577 posts, RR: 3
Reply 14, posted (3 years 8 months 5 days 2 hours ago) and read 6749 times:

Quoting iainbhx (Reply 11):
Shockingly enough, at least amongst C-class passengers, the 343's and 346's are often preferred to the 744's because of the lack of a middle seat.

I agree here. Many c passengers are happy to have an A340 instead of the 747, because it is signifficantly lower noise and as well the 2-2-2 layout of the C-cabin is favoured to the 2-3-2 of the 747. Also in Economy, LH didn't change to in seat entartainment yet.

This may change however once the 747-8i arrives, as it will getbthe new c-cabin and I expect Boeing to do a good job.

As for the Fleet planning, I rather see it as an advantage what LH has: With A380 , 747-8i - (+ 744 for some more time) - A340-600 - A340-300 ans A330 they have all sizes of planes to fit any route perfectly from either their FRA or MUC hub and also can serve from smaller baby hubs - DUS. Berlin, Hamburg + looking to Swiss and Austrian in the crowd - even more one plane will fit.

I am sure with the economy return and probably even more then previously, they are best positioned to run all their different planes most efficiant - especially in the VLA category - in that time and many other airlines will bite their ass as they didn't have more buts in their pessimistic foresight. LH may use all its Options for the 747-8i.

For their 737: I think the 737-700 and 800 are much to close to teir Airbus fleet - So having both wouldn't help. Their 737-500 and partly 737- are rather on the smaller side and maximum competing with theb A319. But upgrading them may have three reasons:
First: To bridge the gap for the C-series to come,
Second: Upgraded and well maintained they may still achieve one of the highest sales pricesfor a classic and be attractive for them.
Third: LH-Technic may get offers from other airlines and lessors to ask for similar upgrades for their own fleet.

For the 777:
I think as they are happy with the A340, LH would consider the 777 in case Boeing will upgrade them to 777NG.
The 777 will be probably 1st choice for a renewed LH Cargo fleet if they dicide to buy MD-11 sucessors. I would guess a combination of 777F and A330F's will follow MD_11 F's

As for 787: Long term (2020+) I could see LH buy the 787 'NG/ Upgrade?' mainly for their smaller hubs for OS, SK?, Swiss' and I am sure that Boeing will give a good price if they are out of the clouds.

For 737NG I see black in LH colors.

Regards

Flyglobal


User currently offlineviv From Ireland, joined May 2005, 3142 posts, RR: 29
Reply 15, posted (3 years 8 months 5 days 2 hours ago) and read 6527 times:

Quoting fraapproach (Thread starter):
relatively unsexy assets

Airliners are not sexy. They were sexy in the 1950s. Now, they are just boring.

In any event, sexiness is not a factor considered during the purchase decision process.



Nikon D700, Nikkor 80-400, Fuji X Pro 1, Fujinon 35 f/1.4, Fujinon 18 f/2
User currently offlineShmertspionem From India, joined Aug 2006, 453 posts, RR: 1
Reply 16, posted (3 years 8 months 5 days 1 hour ago) and read 6255 times:

Quoting flyglobal (Reply 14):
Also in Economy, LH didn't change to in seat entartainment yet.

they've had touch screens on the 346s at least on the India route for about 2-3 years now???? i have to say i much preferred LH's economy cabin to SQ 772 and 773s . 3-3-3 is great when the flight is half empty and you can stretch/sleep - but on a full flight I chose 2-4-2 every day.... plus i found the cabin shade very soothing - it's not photogenic - but its very soothing when you're sitting down...............which was very surprising since being an SQ flier i thought the 777 signature cabin would give a more spacious feeling........... and the downstairs toilet was damn funky too. 



Vi veri universum vivus vici
User currently offlineBrianDromey From Ireland, joined Dec 2006, 3920 posts, RR: 9
Reply 17, posted (3 years 8 months 5 days ago) and read 5849 times:

Quoting flyglobal (Reply 14):
mainly for their smaller hubs for OS, SK?, Swiss'

Perhaps at VIE, but at ZRH the "smallest" widebody is actually the 343. The new 333s seat a few more passengers. So I think the 787 might be a bit small there.



Next flights: MAN-ORK-LHR(EI)-MAN(BD); MAN-LHR(BD)-ORK (EI); DUB-ZRH-LAX (LX) LAX-YYZ (AC) YYZ-YHZ-LHR(AC)-DUB(BD)
User currently offlineZKCIF From Lithuania, joined Oct 2010, 296 posts, RR: 0
Reply 18, posted (3 years 8 months 4 days 22 hours ago) and read 4866 times:

They will run their current 747-430 until the end of their resource, i.e. they will reach 25 years. The same will probably go with 747-830. What new shall we get in XXXL planes before 2037?
Either something revolutionary that will make both 748 and 388 obsolete, or, most likely, nothing new, and these same 380NG and 747-8 or even 747-9 will still be going around. In short, they risk nothing, they can just afford to have a plane in every size category rather than have juge gaps between 388 and the next smaller thing


User currently offlineju068 From Serbia, joined Aug 2009, 2579 posts, RR: 6
Reply 19, posted (3 years 8 months 4 days 22 hours ago) and read 4777 times:
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Quoting LHCVG (Reply 8):
LH does not have the 777, but Aerologic, the Lufthansa Cargo subsidiary/spinoff (not sure which) has 77F's. OS does have 777s it inherited from Lauda, so technically the LH Group has 777s, between OS and the AeroLogic freighters, but not LH the airline itself

Does anyone know what will happen with Austrian's long-haul fleet? Will they keep the 767-300 and 777-200 or will they slowly switch to Airbuses?
Also, does someone know what Austrian intends to do with their Boeing 737's? It seems odd to have them in a mostly Airbus made fleet?


User currently offlineLH422 From Germany, joined Sep 2010, 402 posts, RR: 0
Reply 20, posted (3 years 8 months 4 days 20 hours ago) and read 4637 times:

Quoting Shmertspionem (Reply 16):
they've had touch screens on the 346s at least on the India route for about 2-3 years now????

I believe flyglobal was talking about the B744s. So far only one LH B744 (D-ABVK) has AVOD. All other LH long haul planes (A333, A343, A346, A388) already have AVOD.


User currently offlinejoost From Netherlands, joined Apr 2005, 3167 posts, RR: 4
Reply 21, posted (3 years 8 months 4 days ago) and read 4137 times:

Quoting fraapproach (Thread starter):
I am seriously wondering about the wisdom behind LHs fleet policy as they tend to accumulate a substantial amount of relatively unsexy assets like the A 340-600, the 747-8

Thoughout's Lufthansa's history, they have always been a front-runner in ordering new, unproven aircraft types, only existing in the brochures.

They have been among the first airlines to operate the 707-320, the 727, 737 (launch customer), 747-100, 747-200, 747-400, A320, A340-300 (launch customer), A340-600 and A380. In the near future, they're launch customer for the 747-8i and the C-series.

Being front-runner is risky. It can be very beneficial, but it can also happen that at hindsight, another aircraft were the better choice. But it can also happen that the aircraft turns out te be the best-in-class, and when that happens, you're lucky.

The 340-600 has indeed turned out to be less desireable than the 777-300ER. The 340-600 is not a bad aircraft, though, and AFAIK, the 346 has been able to meet it's target specifications. (unlike the MD-11, who didn't meet it's specs at first delivery). The 346, for example, has been able to deliver lower seat mile costs than the (larger) 744. And originally, the specs for the 77W and 346 were pretty close. However, the 77W has turned out to be better than specified, and that's what has made it the winner in the 350-seat / 7,000nm category.

Add to that, that the 346 was 2 years earlier on the market than the 77W. The 77W was delayed a few times, and was first delivered to AF in 2004. LH received their first 346 in 2002.

Additionally, LH already had a 25-some strong fleet of A343s, as well as a significant fleet of A333s, so commonality was beneficial to them.

For the resale value: indeed, it might not be very high - but that's actually a pretty good reason to keep them flying.

For the 747-8i: for now, it might not be a sales success. But Boeing might still surprise us. I'm sure many airlines are very interested to find out how LH's 748 will compare to their 388s. It's a bit of a gamble, that's true - but now when the 748's CASM will indeed come very close to the A388, it might work very well for LH.

Quoting fraapproach (Thread starter):
and the recent announcement to invest into the FRA based 737 classics.

They're not that old. And AFAIK, the investment is to replace the current seats with the new recaro slimline seats, adding capacity. That's an investment with a very quick return-on-investment.

Added to that, the 737-fleet is flying many short runs, like FRA-HAM or FRA-TXL. When flying these routes, the amount of flight hours / day is rather limited, as the aircraft are much of their time on the tarmac. It's a nice way to use these older aircraft; the A320-fleet can then be used for longer routes, where fuel burn is more important.


User currently offlineSteman From Germany, joined Aug 2000, 1381 posts, RR: 7
Reply 22, posted (3 years 8 months 3 days 23 hours ago) and read 4015 times:

If I´m not wrong LH was also launch customer for the Dornier 728Jet, having ordered about 60 before the whole project got cancelled.
The A330-300 arrived a few years after the A340-600 and were probably meant as a replacement for the intercontinental A310/A300 so they were not a factor in deciding for the A346.

Once I´ve read that, among the factors influencing the choice of model for LH, there is the aspect of LH Technik.
For example, the A319s and A320s are all CFM56 powered but the A321s have IAE V2500.
It looks like a nonsense from a mx and training point of view but this way LH Technik acquired first hand experience on yet another type of engine, experience that it is selling well to other operators

Ciao

Stefano


User currently offlinecolumba From Germany, joined Dec 2004, 7062 posts, RR: 4
Reply 23, posted (3 years 8 months 3 days 21 hours ago) and read 3848 times:

Quoting flyglobal (Reply 14):
First: To bridge the gap for the C-series to come,

That is what I believe as well

Quoting flyglobal (Reply 14):
For the 777:
I think as they are happy with the A340, LH would consider the 777 in case Boeing will upgrade them to 777NG.
The 777 will be probably 1st choice for a renewed LH Cargo fleet if they dicide to buy MD-11 sucessors. I would guess a combination of 777F and A330F's will follow MD_11 F's
LH Cargo recently announced that they are interested in either additional MD11Fs (doubtful that they will get some as I don´t believe they are any available), 747-400Fs or 777Fs.
If LH Cargo is going for the cheapest solution 747-400Ms from LH mainline might be an solution (if LH can spare any 747s right now). Best longterm solution would be the 777F.

As of a potential compensation for the 747-8I delay why not 747-8Fs as well or even more interesting a good deal on 787-9s or -10s ( the -10 is one version LH as stated interest in several times).

Quoting ju068 (Reply 19):
Does anyone know what will happen with Austrian's long-haul fleet? Will they keep the 767-300 and 777-200 or will they slowly switch to Airbuses?

Not for the time being. Wolfgang Mayrhuber also said one time that adding more 777s is an option. OS longhaul fleet will not see a giant make over with A330s just to be replaced with A350s or 787s 5 years later.

Quoting joost (Reply 21):
They have been among the first airlines to operate the 707-320, the 727, 737 (launch customer), 747-100, 747-200, 747-400, A320, A340-300 (launch customer), A340-600 and A380. In the near future, they're launch customer for the 747-8i and the C-series.

Add the Fairchild Dornier 728 to that list  

[Edited 2010-12-27 08:06:52]


It will forever be a McDonnell Douglas MD 80 , Boeing MD 80 sounds so wrong
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