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B767 Replacement Economic Analysis  
User currently offlineLAXDESI From United States of America, joined May 2005, 5085 posts, RR: 48
Posted (4 years 9 months 3 weeks 4 days 2 hours ago) and read 3845 times:

Given that about 1,000 B767s have been sold, it seems appropriate to explore the business case for its replacement. Let me start by looking at a 763ER replacement—I will call it 763ERS. I will assume it to be similarly designed as the B787—all new CFRP design with GenX engines.

Here are the actual and estimated specs. for 763ER and 763ERS:

763ER 763ERS
OEW 198,440 190,000 lbs.
MTOW 412,000 400,000 lbs.
MZFW 295,000 290,000
MSP 96,560 100,000
Wing 156 feet (wing size not changed)
Range 6,100 7,600 nm
The 763ERS can carry its MSP of 100,000 lbs. to 4,700 nm.

CABIN DIMENSIONS
Length 141 141 feet
Width 15.5 15.5 feet
Area 2,186 sq. feet (208 sq. meter)
Seats: About 40Y seats less than an A332 in 2 class configuration.

The assumed efficiency improvements of 763ERS over 763ER are as follows:
Aero.gains of 10%(note that spiroid winglets are expected to reduce fuel burn by 10%)
New GenX engine with 10% lower fuel burn
MTOW reduction of 3%.
Interactive gains of 2%
Total fuel burn reduction 25%

For a 4,000 nm trip:
763ERS burns 12,767 gallons, carries 62,410 lbs. Cargo
A332 burns 16,823 gallons, carries 65,110 lbs. Cargo

763ERS burns 4.056 gallons less, saving about $16,000 per trip.
A332 may earn about $14,000(40Y seats X 70% LF X $500) in additional seat revenues.

The net advantage to 763ERS is about $2,000 per trip—about $1 million annually. New built B763ERS is likely to be cheaper than new built A332; this is an additional advantage of 763ERS over A332.

If Boeing can develop the 763ERS for a total cost of $4 billion, and make about $15 million per unit, then the nominal B.E.P. is about 270 units, and DCF B.E.P. is about 400 units.

I do not expect either A or B to seriously consider a 763ER replacement--at least not for the next five years. Its more likely that the largest 737/A320 single aisle replacement will fill the market for a thin/4,000nm route with about 70% seat capacity of an A332.

14 replies: All unread, jump to last
 
User currently offlineLAXDESI From United States of America, joined May 2005, 5085 posts, RR: 48
Reply 1, posted (4 years 9 months 3 weeks 3 days 22 hours ago) and read 3808 times:

In this post, I will repeat the analysis for 764ER replacement. Note below the actual and estimated specs. for 764ER and 764ERS:

764ER 764ERS
OEW 227,400 215,000 lbs.
MTOW 450,000 435,000 lbs.
MZFW 330,000 320,000
MSP 102,600 105,000
Wing 171 feet (wing size not changed)
Range 5,625 7,000 nm
The 764ERS can carry its MSP of 100,000 lbs. to 4,450 nm.

CABIN DIMENSIONS
Length 153 153 feet
Width 15.5 15.5 feet
Area 2,377 sq. feet (226 sq. meter)
Seats: About 10Y seats less than an A332 in 2 class configuration.

The assumed efficiency improvements of 764ERS over 764ER are as follows:
Aero.gains of 10%(note that spiroid winglets are expected to reduce fuel burn by 10%)
New GenX engine with 10% lower fuel burn
MTOW reduction of 3%.
Interactive gains of 2%
Total fuel burn reduction 25%

For a 4,000 nm trip:
764ERS burns 14,046 gallons, carries 61,110 lbs. Cargo
A332 burns 16,823 gallons, carries 65,110 lbs. Cargo

7634RS burns 2,777 gallons less, saving about $11,000 per trip.
A332 may earn about $3,500(10Y seats X 70% LF X $500) in additional seat revenues.
A332 may earn about $2,000 in additional cargo revenue.

The net advantage to 764ERS is about $8,250 per trip--about $3 million annually.

User currently offlineOyKIE From Norway, joined Jan 2006, 2575 posts, RR: 4
Reply 2, posted (4 years 9 months 3 weeks 3 days 12 hours ago) and read 3762 times:

This is a very interesting post! Thank you for taking the time! Would it be possible to make the same numbers on the 767-200ER compared to a possible 767-200ERS as well?


Dream no small dream; it lacks magic. Dream large, then go make that dream real - Donald Douglas
User currently offlineLAXDESI From United States of America, joined May 2005, 5085 posts, RR: 48
Reply 3, posted (4 years 9 months 3 weeks 2 days 2 hours ago) and read 3698 times:



Quoting OyKIE (Reply 2):
This is a very interesting post! Thank you for taking the time! Would it be possible to make the same numbers on the 767-200ER compared to a possible 767-200ERS as well?

Without listing all the numbers, for a 4,000 nm trip

B762ER will burn 9,071 gallons, carry 37,000 lbs. cargo
B762ERS will burn 7,307 gallons, carry 41,000lbs. cargo

762ERS will save about $7,000 in fuel costs--about $4 million annually over B762ER.

User currently offlineRICARIZA From Colombia, joined Apr 2005, 2356 posts, RR: 29
Reply 4, posted (4 years 9 months 3 weeks 1 day 22 hours ago) and read 3667 times:

I just made a thread which I think is related to this one. I want to know what is the difference in fuel consumption between an old 762/763 and a new A-332... (Assumption: same range)


I miss ACES, I am proud of AVIANCA & I am loyal to AMERICAN
User currently offlineaerohottie From Australia, joined Mar 2004, 735 posts, RR: 3
Reply 5, posted (2 years 5 months 5 days 22 hours ago) and read 2556 times:

LAXDESI - what would the range of a 762ERS be?


What?
User currently offlinetdscanuck From Canada, joined Jan 2006, 12709 posts, RR: 80
Reply 6, posted (2 years 5 months 5 days 15 hours ago) and read 2405 times:

Quoting LAXDESI (Thread starter):
763ER 763ERS
OEW 198,440 190,000 lbs.
MTOW 412,000 400,000 lbs.
MZFW 295,000 290,000
MSP 96,560 100,000
Wing 156 feet (wing size not changed)
Range 6,100 7,600 nm

The key comparison is the 763ERS against the 787-8...that's the one that has to come out a winner for the concept to be at all economically viable. And you need to factor in the additional revenue potential of higher utility of the 787-8 (even though it is being "underrun" for the 763ERS mission).

Quoting LAXDESI (Thread starter):
The assumed efficiency improvements of 763ERS over 763ER are as follows:
Aero.gains of 10%(note that spiroid winglets are expected to reduce fuel burn by 10%)

If you're assuming a cleansheet but restricting the wingspan, you won't get 10% aerodynamic gain, especially with spiroid winglets at the range you're shooting for.

Quoting LAXDESI (Thread starter):
If Boeing can develop the 763ERS for a total cost of $4 billion

You can't do a cleansheet design for $4 billion. If that's your starting position, the concept is dead-on-arrival from an economic perspective.

Tom.

User currently offlinestitch From United States of America, joined Jul 2005, 26699 posts, RR: 83
Reply 7, posted (2 years 5 months 5 days 2 hours ago) and read 2255 times:
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We should note this thread started two years ago and was just resurrected the other day. So it might be best to put it back to sleep.  

User currently offlineLAXDESI From United States of America, joined May 2005, 5085 posts, RR: 48
Reply 8, posted (2 years 5 months 4 days 12 hours ago) and read 2149 times:

Quoting tdscanuck (Reply 6):
If you're assuming a cleansheet but restricting the wingspan, you won't get 10% aerodynamic gain, especially with spiroid winglets at the range you're shooting for.

It may need larger wing to acheive the 10% gain, leading to higher weight and reduced fuel burn efficiency.

Quoting tdscanuck (Reply 6):
The key comparison is the 763ERS against the 787-8...that's the one that has to come out a winner for the concept to be at all economically viable. And you need to factor in the additional revenue potential of higher utility of the 787-8 (even though it is being "underrun" for the 763ERS mission).

I am not going to run new numbers as a clean sheet design will probably cost close to $10 billion, and not the $4 billion that I estimated two years ago.


As I said in the OP of this thread two years ago:

Quoting LAXDESI (Thread starter):
I do not expect either A or B to seriously consider a 763ER replacement--at least not for the next five years. Its more likely that the largest 737/A320 single aisle replacement will fill the market for a thin/4,000nm route with about 70% seat capacity of an A332.


User currently offlinemandala499 From Indonesia, joined Aug 2001, 6180 posts, RR: 74
Reply 9, posted (2 years 5 months 4 days 11 hours ago) and read 2138 times:

OK... Some silly calculations...
4000NM sector + 500NM alternate scenario... 250pax @95kg (pax + bags).

763:
OEW: 90100kg
PLD: 23750kg
ZFW: 113850kg

ALTN: 5400kg
W@Dv: 119250kg
HOLD: 4019kg
LW@D: 123269kg
TRIP: 42500kg
RESV: 2125kg
T+RS: 44625
MSFU: 54055kg
TOWT: 167894kg
MTOW: 185500kg

SPARE LIMITED BY:
MTOW: 17606kg
MZFW: 16750kg

787-8
OEW: 110000kg
PLD: 23750kg
ZFW: 133750kg

ALTN: 5353kg
W@DV: 139102kg
HOLD: 1919kg
LW@D: 141021kg
TRIP: 36225kg
RESV: 1811kg
T+RS: 38036kg
MSFU: 45307kg
TOWT: 179057kg
MTOW: 228000kg

SPARE LIMITED BY:
MTOW: 48943kg
MZFW: UNKNOWN

So... whilst the 787-8 is a "beefier" plane in terms of capability...
To do the same mission (stated above) it will only burn (TRIP) 36225kg whilst the 763(PW) burns 42500kg... a nice 15% difference in fuel burn!

Do we need a dedicated 763ERS????
Answer: A BIIIIIG NOOOOOOOO!!!!!!

Quoting tdscanuck (Reply 6):
And you need to factor in the additional revenue potential of higher utility of the 787-8 (even though it is being "underrun" for the 763ERS mission).

Indeed! At the comparison above, the underload for the 763 is 17606kg while for the 788 is a whopping 48943kg!

Quoting tdscanuck (Reply 6):
You can't do a cleansheet design for $4 billion. If that's your starting position, the concept is dead-on-arrival from an economic perspective.

The data concurrs! (excluding Nav and Landing charges). It's just NOT worth spending the 4bn USD thrown in... not even worth it if it only needs 1bn USD to develop the type.

Better off getting a 788 and reduce the paper MTOW by 20-30 tons!

Mandala499


When losing situational awareness, pray Cumulus Granitus isn't nearby !
User currently offlineLAXDESI From United States of America, joined May 2005, 5085 posts, RR: 48
Reply 10, posted (2 years 5 months 4 days 4 hours ago) and read 2081 times:

Quoting mandala499 (Reply 9):
To do the same mission (stated above) it will only burn (TRIP) 36225kg whilst the 763(PW) burns 42500kg... a nice 15% difference in fuel burn!

Thanks for the numbers.

Is the 763 with winglets in your comparison? Assuming it is not, and further assuming a 20% improvement for an all new 763(with new wings), you should be able to get the fuel burn of the 763ERS below the level of 788 for a 4,000nm mission. However, $10 billion is too much money for an all new 763 with a limited market from Boeing's perspective.

Assuming one could get 10% lower fuel burn for a 763NG with CF-6NG engine, your numbers suggest that 788 would still burn less fuel burn than the 763NG by about 2,000kg. At these numbers, and given a difference of $30 million in acquisition cost, 767NG may be preferable from some operator's perspective. However, it is not clear if Boeing could expect sales of 300-400 units to spend resources on 763NG.

User currently offlinemandala499 From Indonesia, joined Aug 2001, 6180 posts, RR: 74
Reply 11, posted (2 years 5 months 4 days 3 hours ago) and read 2060 times:

From the Aviation Partners site, it shows that the winglets provide about 5% (PW... for GE it's 5.3%) of fuel savings on the 763ER on a 4000NM sector. It reduces the 7878 fuel advantage down to 4150kgs... but... it still translates to burning 11% more fuel.
At 90 cents a liter it translates to $4850 per 4000NM sector.

The additional purchase cost of a 787 is 30 million. Spread that over 60000hrs and it's only an additional $500 per hour.

But I tend to think the price difference is about 20 million USD which translate to $333 USD an hour.

So 333 - 500 USD an hour means 285 to 428kgs of fuel an hour.

The 787 does the 4000NM in 8H28. So it translates to $2820 to $3624 per 4000NM trip... that in turn translates to the equivalent of 2412kgs - 3100kgs of fuel per trip.

So yes... the 767-300ER with winglets need only save another 1050kgs per 4000NM trip to make it cheaper than the 7878 on that 4000NM@250pax trip... or basically shave off another 1.3% to 4.3% of fuel burn assuming it keeps a 20 - 30 million cheaper price than the 787-8 and that the route will never need to carry more than 250 pax.

It's just too thin to justify a re-engined 767 in my opinion... especially when we factor in:

Quoting LAXDESI (Reply 10):
However, it is not clear if Boeing could expect sales of 300-400 units to spend resources on 763NG.

If I am in the position of an airline that's not a current 767 operator, I'd go for the 787-8 unless the re-engined can be ready tomorrow... and that's not counting the "extra" hassle for having a separate sets of containers just for the 767s. If I am a current 767 operator then the decision will have to be stick with it or jump ship altogether to the 787. If I am an airline who's already ordering the 787-8... I'm not going to look into the 767NG at all unless it can prove a 10-20% net savings from the current 767s.

The growth potential and greater flexibility offered by the 787-8 worth thousands of bucks an hour at a mere additional cost of $333 - $500 USD per flight hour is enough for me.

Mandala499


When losing situational awareness, pray Cumulus Granitus isn't nearby !
User currently offlineLAXDESI From United States of America, joined May 2005, 5085 posts, RR: 48
Reply 12, posted (2 years 5 months 4 days ago) and read 2025 times:

Quoting mandala499 (Reply 11):
So yes... the 767-300ER with winglets need only save another 1050kgs per 4000NM trip to make it cheaper than the 7878 on that 4000NM@250pax trip... or basically shave off another 1.3% to 4.3% of fuel burn assuming it keeps a 20 - 30 million cheaper price than the 787-8 and that the route will never need to carry more than 250 pax.

It's just too thin to justify a re-engined 767 in my opinion...

Thanks for the analysis.

So on paper, a 767NG with 10% lower fuel burn than the current 767 may be cheaper to operate than 788 on sub 4,000 nm thin routes. Looks like unless operators step up with a firm order of 100-150 767NG, it is unlikely to entice Boeing to spend resources on it.

User currently offlineLAXDESI From United States of America, joined May 2005, 5085 posts, RR: 48
Reply 13, posted (2 years 5 months 3 days 23 hours ago) and read 2011 times:

Quoting aerohottie (Reply 5):
LAXDESI - what would the range of a 762ERS be?

I would expect the design range, based on assumptions outlined in OP, to be around 8,100nm-- which would be nice for some long and very thin routes. I doubt there are many routes like that.

User currently offlineOyKIE From Norway, joined Jan 2006, 2575 posts, RR: 4
Reply 14, posted (2 years 5 months 3 days 6 hours ago) and read 1934 times:

Quoting LAXDESI (Reply 12):
So on paper, a 767NG with 10% lower fuel burn than the current 767 may be cheaper to operate than 788 on sub 4,000 nm thin routes. Looks like unless operators step up with a firm order of 100-150 767NG, it is unlikely to entice Boeing to spend resources on it.

When ANA canceled the 787-3 it was stated that the 767-300ER with winglets could do routes up to 3000Nm at almost the same operating cost as the 787-3. So on segments shorter than 3000N, the 767 lower weight still counts.  


Dream no small dream; it lacks magic. Dream large, then go make that dream real - Donald Douglas
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