benjaminedelman From United States of America, joined Apr 2013, 4 posts, RR: 0 Posted (7 months 4 weeks 1 day 18 hours ago) and read 2163 times:
I recently filed several formal complaints with DOT on matters pertaining to fuel surcharges. Complaints are linked here. I'd be happy to discuss this generally, but I'm most interested in feedback from Airliners.net gurus on the question of cargo capacity, specifically for certain BA transatlantic flights. Confirming BA's cargo capacity will help estimate BA's fuel surcharge revenue and hence BA's compliance with applicable DOT requirements.
BA's web site states that its 777-200 IGW aircraft (BA's most common 777 subfleet) can carry up to 39,700 lbs of cargo. I'm trying to figure out whether passenger baggage is included in that 39,700 lb figure. My interpretation of that "cargo" figure was that BA has already deducted anticipated passenger baggage. But in a recent submission to DOT (p.9), BA suggested otherwise -- deducting 9,062 kg for passenger baggage.
If passengers bring the usual amount of checked baggage (and I've seen various estimates on industry and regulator sites), how much cargo capacity can BA reasonably expect to sell for freight?
I realize that cargo capacity is route-specific due to fuel requirements. I've been using BOS-LHR as a baseline for analysis. I know BA operates a mix of 777-200 types. If there's reason to think BA uses one type rather than another on this route, or that the IGW type is otherwise not the right one to use for estimation purposes here, I'd be interested in folks' thinking on that.
I've also been looking at 747 service LHR-LAX. (There's no special rationale for these routes or aircraft -- just wanted to present a mix of directions, aircraft, and segment lengths.)
In its Answer, BA stated as follows: "[T]he ... cargo capacity of BA’s 777 is 20,184 kg. Taking into account the 9,062 kg set aside for passenger baggage, there is a billable cargo capacity of only 11,122 kg." This seems low to me, relative to what other carriers, Boeing, BA's own web site, etc. say about freight capacity -- but I look forward to thoughts from people here.
9MMPQ From Netherlands, joined Nov 2011, 283 posts, RR: 0 Reply 1, posted (7 months 4 weeks 1 day 10 hours ago) and read 2030 times:
Shall i open the proverbial can of worms ?
First of all, i think BA have given a detailed and good response in their submission to the DOT as linked by yourself. While it does make for rather amusing reading in the process it also does shred any case and its basis that you have brought forward. I can only seriously recommend that you take and learn from it.
Quoting benjaminedelman (Thread starter): Confirming BA's cargo capacity will help estimate BA's fuel surcharge revenue and hence BA's compliance with applicable DOT requirements.
And without historical loadfactors on the one sector (BOS-LHR) you are looking into it's pretty useless unless you've already assumed that it's 100%, which you already seem to have done anyway judging by BA's response to the DOT.
Quoting benjaminedelman (Thread starter): BA's web site states that its 777-200 IGW aircraft (BA's most common 777 subfleet) can carry up to 39,700 lbs of cargo.
Including passenger baggage that is quite a fair average estimate. It can be more on shorter sectors, it can be less on longer sectors. But have you really used an archived webpage from 2003 to base your theory on and present it to the DOT ? No wonder BA mentions the fact you have used incorrect seating density information. Me thinks you would have wanted to make sure you had the last/most recent information, especially as the seatplan can be simply gotten straight from their (current) website.
Bottomline, i think you have a lot of homework to do and are focusing so much on finding a fixed figure for your fuel surcharge that you have completely missed the fact that everything you are or should be using is subject to a great number of variables.
I believe in coincidences. Coincidences happen every day. But I don't trust coincidences.
benjaminedelman From United States of America, joined Apr 2013, 4 posts, RR: 0 Reply 2, posted (7 months 4 weeks 1 day 6 hours ago) and read 1989 times:
9mmpq, thanks for taking the time to reply. I hesitate to get into the merits of the core of my complaint. But suffice it to say, I'm comfortable with the approach I took and I believe I have provided a meritorious complaint on which the DOT will take appropriate action.
Very briefly on the specific areas you asked about:
As to load factors on BOS-LHR: My complaint made an appropriate adjustment to surcharge revenue based on BA's current stated load factors for passengers and cargo. The DOT's requirements do not call for perfection, just a "reasonable estimate", which I did. The better data is within BA's possession, and BA could provide it if it cares to do so.
As to my use of an archived web page: BA's current site omits data about both fuel consumption and cargo capacity. Example. Hence my considered decision to use BA's historical statements. You will notice that BA's formal Answer also relied on historic information, specifically BA's 2007 Fact Book.
No doubt there are many variables. But I come here, to talk to civil aviation experts, exactly to get a second opinion. For example, is anyone surprised that BA claims just 11,122 kg of freight capacity on BOS-LHR 777 service, when AA previously told DOT that its 777-200's could transport a full load (100% pax and bags) HND-LAX (5487 miles, 68% further) along with 19,286 kg of freight? (See AA's Exhibit AA-118, page 13.) Are AA's aircraft truly that much more powerful and that much more capacious? 73% more freight on a 68% longer route? Is this difference attributable to engines, MTOW, something else?
And is it typical and reasonable for BA's statements, in both its web site and its fact book, to quote "cargo" inclusive of passenger bags, such that actual salable freight capacity is roughly half as much? Is that consistent with standard practice among passenger carriers that also transport cargo? I found quite a few examples of carriers quoting cargo capacity net of passenger bags (and some statements from BA, elsewhere, that BA quotes its "cargo" capacity net of passenger bags).
BAW217 From United Kingdom, joined Jun 2007, 121 posts, RR: 0 Reply 3, posted (7 months 4 weeks 23 hours ago) and read 1906 times:
I hope I can help.
I have dispatched many a flight and have day to day experience in the sale of Jet A1.
You may have the same type of aircraft in this case a 777, however aircraft can have an artificially lowered maximum takeoff weight, and this reduces costs such as airport/landing and navigational fees all of which are based on the maximum takeoff weight of the aircraft. Artificially lowering this weight can save airlines hundreds of thousands of dollars/pounds per aircraft each year, whilst they are operated profitably.
According to the United Kingdom Civil Aviation Authority British Airways has 5 different maximum takeoff weights on the -200 fleet. I have broken it down below:
G-VIIA/B/C/E/F/G/H/J/K/L/M/N/S/U/V/W/X/Y & G-RAES
Boeing lists the MTOW of the 777-200ER as 297550kg.
As you can see the majority of BA’s 777s have an artificially lowered maximum takeoff weight of 267619kg. This factor alone already shows you why BA has a much lower availability of cargo room. BA also have GE90-85Bs on these 777s, not GE90-94Bs which produce 18000lbs less thrust per engine than the GE90-94B (76000lb vs 94000lb), this will reduce aircraft performance, thus lower the maximum available payload.
Out of G-VIID/T/O/P/R only one of those aircraft operates from Heathrow, which is G-VIID, the others are in a leisure configuration based at Gatwick which carry 54 more passengers than the other GE90 powered 777s. G-ZZZA/B/C are original -200 aircraft (GE90-76B powered) which has a much smaller centre fuel tank and a maximum takeoff weight according to Boeing of 247200kg
Of the G-YMM* fleet (RR Trent 895 powered) ten of them (G-YMMA through G-YMMF and G-YMMR/S/T/U) are in a 3 class configuration with 275 seats, with two based at Gatwick with the other eight at Heathrow. The remaining aircraft are in a four class configuration with 219 seats. These aircraft have the normal Max Takeoff weight as these aircraft tend to operate the longer range flights such as Shanghai (When not operated by the 300ER), Johannesburg (Seasonal), Tokyo Haneda and Seoul.
I have also looked at your initial maths in regards to the calculation of how much the fuel costs and how much is used.
In your example of LHR-BOS and a flight time of 6hrs 20mins you have estimated that it would need 48108 litres (6.33 x 7600). Converting that into US Gallons by the factor of 3.7854, that equals 12709USG (Rounded up) then into Metric Tonnes via the factor of 331USG per Metric Tonne, that is 38.4T. After running a flight plan today on a maximum available payload, up to the 267619kg maximum takeoff weight, maximum zero fuel weight of 195000kg and maximum landing weight of 208700kg (both listed by Boeing) the flight today would be 6hrs 40mins and require just shy of 50000kg of trip fuel alone, plus contingency fuel, diversion fuel, reserve fuel and taxi fuel that totals just over 58000kg of fuel required for the trip (72672 litres). Obviously the amount of fuel varies day to day, flight to flight, so it is extremely difficult to work out figures in regards to surcharge income vs fuel cost. One thing is for sure, BA are not paying $0.766 a litre, I can say that with certainty. What they are paying depends on how well they have hedged.
Having read BA’s response, and if I am honest with you it seems a very fair and honest response.
benjaminedelman From United States of America, joined Apr 2013, 4 posts, RR: 0 Reply 4, posted (7 months 4 weeks 20 hours ago) and read 1872 times:
Thank you, BAW217. I particularly appreciate your explanation of how BA's configuration decisions yield lower freight capacities and why this might nonetheless be a rational decision.
I noticed your statement that "One thing is for sure, BA are not paying $0.766 a litre, I can say that with certainty. What they are paying depends on how well they have hedged." I didn't understand whether you intended to indicate that you believe BA is paying more, BA is paying less, or just that the price is hard to predict. Can you clarify?
Quote: "When a cost component is described as a fuel surcharge, for example, that amount must actually reflect a reasonable estimate of the per-passenger fuel costs incurred by the carrier above some baseline calculated based on such factors as the length of the trip, varying costs of fuel, and number of flight segments involved."
Do you think BA has met this requirement? You mention the factors that might cause variation from day to day, which is well-taken. Is your conclusion that in this context, BA cannot be expected to comply with this "reasonable estimate" rule? That BA's fuel surcharges are, in any event, a reasonable estimate of fuel expense above a baseline? Something else?
In my view, I've made a pretty good showing that BA's fuel surcharges are not a reasonable estimate of per-passenger fuel costs above a baseline. Even with reduced freight capacity and hence reduced freight surcharge revenue, BOS-LHR fuel surcharge revenue appears to exceed total fuel expense -- not to mention increase in fuel expense above a baseline. I'll have full details of my calculation in my Reply to be filed this week.
9MMPQ From Netherlands, joined Nov 2011, 283 posts, RR: 0 Reply 5, posted (7 months 4 weeks 3 hours ago) and read 1817 times:
Quoting benjaminedelman (Reply 2): And is it typical and reasonable for BA's statements, in both its web site and its fact book, to quote "cargo" inclusive of passenger bags, such that actual salable freight capacity is roughly half as much?
I don't consider such figures anywhere near firm, if anything i consider it a ballpark figure which can greatly vary depending on the sector lengths an aircraft is deployed on. Also BAW217s excellent explanation on the differing ZFWs is another reason and now shows how BA gets to this figure.
Quoting benjaminedelman (Reply 4): I noticed your statement that "One thing is for sure, BA are not paying $0.766 a litre, I can say that with certainty. What they are paying depends on how well they have hedged." I didn't understand whether you intended to indicate that you believe BA is paying more, BA is paying less, or just that the price is hard to predict. Can you clarify?
Near impossible to say without actually seeing their negotiated contracts. But to add something intresting to the mix, a few years ago my company had hedged while the general expectation was that fuel prices would only continue to rise. Had that been the case it would have mitigated the impact of rising fuel costs. Unfortunately due to economic conditions fuel prices dropped somewhat but because they already hedged they were stuck on what now had become a higher fuel price compared to current market rates. Hedging can protect a company from rising prices for a while but if the market drops a bit it could well come back to bite you. Don't ask me for specific figures as i don't have them but the fact the company was impacted in this way was highlighted in financial presentations at the time.
Quoting benjaminedelman (Reply 4): Do you think BA has met this requirement? You mention the factors that might cause variation from day to day, which is well-taken. Is your conclusion that in this context, BA cannot be expected to comply with this "reasonable estimate" rule? That BA's fuel surcharges are, in any event, a reasonable estimate of fuel expense above a baseline?
I think BA in their response have given a reasonable explanation with substantial backing information & i think the DOT is also well aware of how many variables come into play. I would say your personal definition of "reasonable estimate" may well be hinging on things you see as much more fixed while they are more variable and on dated or incomplete information used, at least that seems to be the logical conclusion from what we have gathered from your initial approach & BA's response.
With all this i honestly rather struggle to see a reason for the DOT to proceed futher on this and i think this will turn out to be a waste of not just your time. If you still think you can present a viable case with eveything you have been told so far then by all means proceed but you may wish to prepare for a disappointment.
But at least you did get some insights into BAs cargo capacity.
I believe in coincidences. Coincidences happen every day. But I don't trust coincidences.