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747 Short Hops,High Loads, = Profit?  
User currently offlinereadytotaxi From United Kingdom, joined Dec 2006, 3048 posts, RR: 3
Posted (5 months 4 weeks 1 day 14 hours ago) and read 2709 times:

I was asked this question by a friend and did not have the answer, could a larger aircraft,say 747, operate a short haul flight with all E seating and make a profit? Example, LGW _IBZ , under 4 hrs,no in flight service. Just a bus to all purposes. Is it a business model?


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5 replies: All unread, jump to last
 
User currently offlineLH707330 From United States of America, joined Jun 2012, 588 posts, RR: 0
Reply 1, posted (5 months 4 weeks 1 day 14 hours ago) and read 2691 times:

Judging by the fact that few such services exist, I'm inclined to say that the RASM drops off quickly and doesn't keep pace with CASM, thus making it unprofitable. There are a few exceptions, notably Hajj charters, where there's sufficient demand to warrant such trips, but in general, the marginal revenue is outpaced by the marginal cost, so it doesn't work.

User currently offlinevikkyvik From United States of America, joined Jul 2003, 9391 posts, RR: 27
Reply 2, posted (5 months 4 weeks 1 day 14 hours ago) and read 2667 times:
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Quoting LH707330 (Reply 1):
There are a few exceptions, notably Hajj charters, where there's sufficient demand to warrant such trips, but in general, the marginal revenue is outpaced by the marginal cost, so it doesn't work.

Don't forget Japan's 747-400D services.



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User currently offlineFlighty From United States of America, joined Apr 2007, 8198 posts, RR: 3
Reply 3, posted (5 months 4 weeks 1 day 10 hours ago) and read 2563 times:

Quoting LH707330 (Reply 1):
I'm inclined to say that the RASM drops off quickly and doesn't keep pace with CASM

Yes I believe so. RASM always declines with airplane size.

The 747 is built with heavy structure designed to carry heavy freight and fuel loading.

These tons of metal are wasted on such a route. Helping to explain why 2x A320 or A321 can fly the route just as cheaply as a 747. And on probably equal fuel. The 747 has no cost advantage.

The A321s make more revenue because you can stagger the flights in time. Creates a bigger "market" to sell to. An afternoon flight and evening flight for example.

2 A321s can also save cost. You can decide not to deploy the second A321 on low demand days. That flexibility is a huge cost savings versus a half empty 747.


User currently offlineStitch From United States of America, joined Jul 2005, 29656 posts, RR: 84
Reply 4, posted (5 months 4 weeks 1 day 8 hours ago) and read 2517 times:
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Quoting vikkyvik (Reply 2):
Don't forget Japan's 747-400D services.

Which are effectively no longer in operation (JL have phased out all 747-400s and NH is retiring their 747-400Ds as quickly as they can).


User currently offlineStarlionblue From Greenland, joined Feb 2004, 16908 posts, RR: 67
Reply 5, posted (5 months 4 weeks 1 day 6 hours ago) and read 2452 times:

Quoting readytotaxi (Thread starter):

I was asked this question by a friend and did not have the answer, could a larger aircraft,say 747, operate a short haul flight with all E seating and make a profit? Example, LGW _IBZ , under 4 hrs,no in flight service. Just a bus to all purposes. Is it a business model?

Come to Asia. This sort of thing has been going on for decades, though granted not in all Monkey Class config. Japan domestic services, KUL-SIN, HKG-TPE, HKG-MNL are all well served with widebodies.

Quoting Stitch (Reply 4):
Quoting vikkyvik (Reply 2):
Don't forget Japan's 747-400D services.

Which are effectively no longer in operation (JL have phased out all 747-400s and NH is retiring their 747-400Ds as quickly as they can).

The reason 744s have been replaced with 773s and 333s on these routes is the same reason 744s have been replaced with those aircraft on long haul routes. The 744 has a hard time competing nowadays. The routes have gone from Jumbo to big twin, not to narrowbodies with more frequency.

Quoting Flighty (Reply 3):
2 A321s can also save cost. You can decide not to deploy the second A321 on low demand days. That flexibility is a huge cost savings versus a half empty 747.

Granted, but at a certain point volumes become so high that you'll just use a widebody anyway.



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