par13del From Bahamas, joined Dec 2005, 5901 posts, RR: 8 Reply 4, posted (6 months 3 weeks 3 days 13 hours ago) and read 6183 times:
So we have numbers for the Boeing a/c in particular the 737-400's which BA have on the way out for a few years, do we know how many A32XX a/c are based there, if they were lowering cost, how does maintaining older a/c like the -400 work when they also have more modern a/c in their overall fleet?
We also have another thread on the dropping of the MAN-LGW route, are we on the way to more consolidation at LHR?
Bongodog1964 From United Kingdom, joined Oct 2006, 3018 posts, RR: 2 Reply 6, posted (6 months 3 weeks 3 days 13 hours ago) and read 6001 times:
I can see BA moving more 772's to LGW to increase long haul leisure flying as planes are freed up by new deliveries, however I can't see BA purchasing 2nd hand long haul aircraft. As stated earlier this would be a total departure from their normal fleet policy.
fcogafa From United Kingdom, joined May 2008, 633 posts, RR: 0 Reply 7, posted (6 months 3 weeks 3 days 12 hours ago) and read 5931 times:
But if they are in a hurry to start all these new long haul routes using the LHR slots acquired from BMI it would be understandable if they were looking for used aircraft that were available quicker than their scheduled deliveries.
VV701 From United Kingdom, joined Aug 2005, 6624 posts, RR: 17 Reply 8, posted (6 months 3 weeks 3 days 11 hours ago) and read 5703 times:
Quoting par13del (Reply 4): if they were lowering cost, how does maintaining older a/c like the -400 work when they also have more modern a/c in their overall fleet?
Low or minimal capital cost.
The Airbus list price of an A320 is US $88.3 million. The amortization cost of US $ 88.3 million at, say, 5.5 per cent per year is nearly US $ 5 million. The amortization cost of a 734 depreciated to its scrap or spares value is US $ 0.
So if we allow for a discount of, say ,around 20 per cent on the list price of an A320 we are looking at an additional annual capital cost of a new 320 being around US $ 4 million more than that of a fully written down 734. That's a hell of a lot of money to have to save through the improved fuel efficiency and the lower maintenance costs of new aircraft. Put another way, looking at an annual aircraft utilisation of 2,500 hours, an airline would need to save $1,600 per hour through fuel efficiency and lower maintenance costs for a depreciated 734 to have as high operating costs of a new 320.
This explains why many airlines including BA and the likes of AF and LH buy new aircraft and then retain them for most if not all their useful working lives. It also explains why third world start up airlines initially buy aircraft like old 734s rather than new 320s.
Aircraft cost is a major contributor to operating costs. And there would still be a significant saving in capital costs if the old 734 had not been fully depreciated. This is because it would have been bought in 1990 $s. With four per cent inflation over twenty years what costs US $ 88.3 million today would have cost a little more than $ 40 million twenty years ago. So depreciation costs would be around 45 per cent below those of a new aircraft.
All aircraft require a major D Check every five years or so. It is likely that the D Check of a five year old aircraft undergoing its first Heavy Maintenance Visit will cost less than one undergoing its third or fourth such procedure because less new parts may be needed. But a major cost element will be skilled engineering costs which are likely to be somewhere around 40,000 hours be it for a first or fourth such check.
bluesky73 From UK - England, joined Oct 2012, 137 posts, RR: 0 Reply 9, posted (6 months 3 weeks 3 days 10 hours ago) and read 5572 times:
How comes Ryanair and Easyjet manage to expand and make profit with new aircraft. I know they buy in bulk and keep aircraft for less years but clearly it works.
As much as a fully depreciated 734 can be more profitable why is BA on back foot at LGW for last 10 years - should theyhave kept more older depreciated aircraft?
Just on a fantasy, never going to happen tip- Maybe they could size up and do modern day equivalent of British Airtours or Caledonian. Sadly those wide-bodies to the med and those big package days have gone. A 777 in either livery would be cool if both brands were still around. Miss those Tristars to Alicante though...
vectismanpaul From United Kingdom, joined Apr 2012, 58 posts, RR: 0 Reply 10, posted (6 months 3 weeks 3 days 9 hours ago) and read 5501 times:
Ryanair bought most of it planes at very good prices after 9/11 when Boeing were desperate to sell aircraft. They were then able to sell them on at reasonable prices. However Boeing no longer neds to sell at low prices and the deliveries to Ryanair are also nearly complete. Ryanair is still looking for a deal with a manufacturer.
I believe and stand to be corrected that most of the Easyjet fleet is leased so initial costs may be less. Like Ryanair the deliveries to Easyjet are slowing. However I do agree that the maintenance costs may be less.
However do remember Ryanair is becoming a seasonal airline with nearly 100 aircraft out of service for the winter months.
Both British Airways and Easyjet keep most of their fleet flying all year although there is increased maintemance in the quieter periods.
British Airways tends to own aircraft and has higher costs owing to their business model that includes providing premium services.
Easyjet is sort of in between with better levels of service than Ryanair.
Don't forget most of Ryanair's expansion has been outside the UK. As its markets mature there expansion rate will slow.
Difficult to compare the three airlines really.
Also I believe the negative stories about the BA 737s can be misleading. I have travelled on them often and they appear quite fit for purpose most of the time.
VV701 From United Kingdom, joined Aug 2005, 6624 posts, RR: 17 Reply 11, posted (6 months 3 weeks 3 days 7 hours ago) and read 4642 times:
Quoting bluesky73 (Reply 9): How comes Ryanair and Easyjet manage to expand and make profit with new aircraft. I know they buy in bulk and keep aircraft for less years but clearly it works.
Confirming vectismanpaul's comments, FR got such a good deal. from Boeing that it was reported that it sold on some of their early deliveries at a higher price than it was paying Boeing for what were effectively the replacement, totally new aircraft.
Quoting bluesky73 (Reply 9): As much as a fully depreciated 734 can be more profitable why is BA on back foot at LGW for last 10 years - should theyhave kept more older depreciated aircraft?
If it had tried to operate the same services with new aircraft there might not be a BA presence at LGW today.
If they had kept older aircraft in service it would mean they would still be operating the 732 fleet that was delivered in the early 80s. Profit wise this would not have helped. It would have made things worse.
Like the 734 fleet the aircraft would have been all written down to a residual value, so there would be no cost savimg there.
Being less fuel efficient than the 734s there would be a higher fuel cost to operate the 732s.
Maintenance wise the 732 fleet would also likely cost more to keep flying. So operating aircraft pre-dating their 734 fleet would likely prove significantly more inefficient.
The balance is always fine. An example is the latest update to BA's 724 fleet. In 2010-11 they were fitted with slim-back seats in the rear (Y) cabin. These seats were lighter and allowed an additional row to be installed increasing the number of seatsfrom 147 to 153 when in an all-Y configuration (as in all domestic flights). However the centre seat on the left (?) side in the front four rows is never sold. Why? Because with 150 passengers regulations require that there be four FAs on board. Less than 150 requires only three. So not selling those seats saves on the costs and carrying the weight of one FA.
That raises the question as to why install an extra row of six seats but only use two of them? Answer: When the front of the cabin is sold as Club Europe then the centre row of all BA short haul aircraft is not sold. So with an additional row of seats behind the Club Europe cabinin the 754s the Y capacity is then 6 more than it would otherwise have been.
skipness1E From United Kingdom, joined Aug 2007, 2377 posts, RR: 0 Reply 12, posted (6 months 3 weeks 3 days 6 hours ago) and read 4565 times:
"BA could have wide-bodies available for transfer to Gatwick from Heathrow following an over-haul of its long-haul fleet that includes the arrival of 12 A380s and 24 Boeing 787-8s due for delivery starting in May.
The company will also assess the A350-1000, the biggest version of Airbus’s latest wide-body plane, and Boeing’s stretched 787-10 and re-winged 777-X, fleet manager Alexander Grant said last year. Those models are candidates for the replacement of 52 Boeing 747s -- comprising the largest jumbo fleet -- BA chief executive officer Keith Williams said Oct. 15. "
All it's saying is what we already know. There is not a single thing new here, except the slightly misleading idea that the costbase is now "very competitive". How can I put this? That's not true, it's just not as far from being competitive as it once was. LGW is back to nine based B777s which is where they were when the hub was closed and before the Texas routes moved to LHR. That's pretty good but no one is seriously saying BA are going to re-hub LGW. The new long haul aircraft will be LHR based to extract maximum value from the bmi purchase, I am not convinced there's going to be a whole lot of spare B777s freed up for Gatters.
bluesky73 From UK - England, joined Oct 2012, 137 posts, RR: 0 Reply 14, posted (6 months 3 weeks 3 days 6 hours ago) and read 4448 times:
Sorry when I said older aircraft I didn't mean 732 although to see one back at London airports would be great, although probably not legal due to noise restrictions., I was thinking other 734/733/735s that left fleet but think some of these were leased.
As some of 734s have been repainted with crest and as you say refitted with slim seats some of the 734s aren't leaving the LGW fileet any time soon.
As for the bigger birds it will be interesting to see what BA has planned.
WB556 From United Kingdom, joined Oct 2011, 29 posts, RR: 0 Reply 16, posted (6 months 3 weeks 3 days 4 hours ago) and read 3550 times:
I travel to Ibiza frequently to visit family and must say that the 734's on the most part took smart and do the job. Most people don't know the difference but I find it a nice change to take a ride on a classic 737, they won't be about for a lot longer, enjoy them while you can. My only bug bare is the lack of club lounge and priority boarding in Ibiza.
This route seems good for BA, rarely a seat free in economy and only a couple up in club. Excellent service in club too as there are often only 4 rows.
kaitak From Ireland, joined Aug 1999, 11955 posts, RR: 37 Reply 17, posted (6 months 3 weeks 3 days 4 hours ago) and read 3335 times:
I have to agree with those who say that the 734s are anything but past it; I travel on them a fair bit between JER and LGW and if I didn't actually know that they were 20+ years old, I would be surprised to hear it; they are clean, they look well and they're comfortable. Certainly, they don't look or feel their age and I find the interiors perfectly comfortable and acceptable..
That said, reality bites; a few weeks back, I went to LGW a few weeks back and I was amazed to see how dominant U2 has become at LGW. Their fleet has age on their side; BA doesn't and sooner rather than later, a time will come when BA has to make a decision. Frankly, I just don't think their heart is in it to invest in a new fleet, so if they are to hang in there, it will have to be A319s, possibly a few 320s. However, I do think that U2 will continue to grow at LGW and they will come into current BA markets.
bluesky73 From UK - England, joined Oct 2012, 137 posts, RR: 0 Reply 25, posted (6 months 3 weeks 2 days 7 hours ago) and read 1109 times:
Thanks Dano1977. So is it more economical to buy, sell then lease back aircraft?
If you buy an aircraft I would assume that you're better off keeping for good number of years unless you got a real cracking deal when buying in bulk?