I would like to try to answer your question re: cost of operation 747 v. 777-200.
The short answer is yes and no. It depends on what version of 747 to which you are referring. Let's say for argument sake, you are comparing the -400 vs the 777-200ER.
Let's also look at the biggest variable cost (other than crew costs), fuel.
Assume fuel=$1.50/US gal for Jet A.
Max fuel capacity=747-400 57285gal
Pax Capacity= 747-400 416 pax (3 cabin)
Pax Capacity= 777-200ER-301 pax
Max range full payload - 747-400 7236 mi
777-200ER 7736 mi
: Let's try to get to fuel unit costs: Assume 7000 mi flight max payload
747-400: Gas: 57285gal x 6.84lbs/g = 391829lbs. (JetA)
777-2ER: Gas: 45220gal x 6.84lbs/g = 309305lbs. (Jet A)
l - weight
747- 391829/416 pax=941.9 speed m0.85-567
772- 309305/301 pax=1027.59 speed m.084-561
seat cost/mi: 1102.93/7000 = 0.158 (744)
seat cost/mi: 1201.86/7000 = 0.176 (772)
Note: This is fuel cost per seat mile at 100% load factor.
Now: factor in gal/hr at gross weight:
747-875000 MTOW Fuel/hr-4695.5g/h 186.4lb/fuel hr
772-656000 MTOW Fuel/hr=3616.6g/h 181.4lb/fuel hr
The key difference is the fuel burn. The fuel burn per lb on the 777 is less than the 747, giving it slightly better range. Therefore, with a full fuel load, it will have more gas left at 7000 miles than the 747. When you factor that in, the 777 is less costly to use.
Now, put revenue into the picture:
However, the extra 100 seats on the 747 make a huge difference. The maximum distance for the 747 is 7200 miles and the 777 only 7700+. This means that you can carry 100 pax more on the same 7000 route than the 777. Assuming that revenue is the same across the three carriers:
F-6500 x 12
C-4500 x 39
Y-1000 x 365
Total revenue at 100% - 618600/7000/416-0.212 rasm
F-6500 x 12
C-4500 x 39
Y-1000 x 258
Total revenue at 100% - 512100/7000/309-0.237 rasm
Over the same distance, the 777 generates higher rasm (unit revenue) due to the higher percentage of premium v. economy seats.
Over the same distance, the 777s casm (cost) are higher so the margin for this aircraft over 7000 mi is: 0.061/asm vs. 0.054/asm for the 747. However, since the 747 can carry 100 more passengers, the aircraft will generate more revenue for the airline than the 777 over the same distance. In margin percentages,
So which airplane is more cost efficient? Over the same long haul distance, if we take only fuel into account, the 777 is slightly behind the 747-400. However, if you factor in crew costs (more crew required on the 747-400 than on the 777, then the 777 becomes slightly more cost effective.
If we look at the margin (profit) based on fuel only, then the difference is very small. 777-25.7% margin 747-25.4% margin. While 0.3 of a point is a lot, it is not that much considering that you are carrying an extra 100 pax doing it. In this case, the revenue value outweights the margin because the margin difference is so small.
However, what I have shown you is a very significant oversimplication of the cost calculation. A number of other factors: Routes, fuel costs, crew costs catering and maintenance costs, especially at out stations will weigh heavily on what aircraft is used for a specific route. Remember, airplanes are fitted to the routes they fly and the size and dynamics of those markets. Not the other way around.
In closing, a purest would say that the 777 is more cost efficient than the 747. They would be right. However, given the multitude of factors that enter into a route/aircraft benefit analysis, the market will ultimately decide the aircraft needed. To get a full picture, you would need to discuss with an airline operations analyst, what factors drive the operational costs of a specificf route. Then you will know what aircraft is right sized (maximizing cost efficiencies) for a particular market.
One last point: Operating costs are always a percentage of revenue. So unit cost based on the number of people actually flown on a given leg will determine the actual unit costs for a given city pair. Calculations:
unit cost = ((flight cost per hour x hours flown) / actual pax flown)/miles).
unit revenue=(pax$F)+(pax$C)+(pax$Y)/total pax flown)/miles.
$ unit margin/flight= unit revenue-unit cost (in asm)
% margin/flight=$ margin/$ revenue (in asm)
Break even LF
= (flight cost per hour x hours flown)/miles) = (pax flown x average fare)/mile.
Example: 100 seats per flight. Flight distance: 500 miles. Average fare per seat: $80.00 Flight cost: $10000/hr (crew, fuel, meals, fees, airport costs etc.) Flight time: 1 hour at 500mi/h
$10000 cost/500/100 seats= 0.20casm
$8000 rev max/500/100 seats= 0.16rasm
$10000 cost = (0.20casm)
$13500 revenue (0.27casm) = 74% BLF
I hope this answers your question.
All the best,
: Source data: BCAC Statistics from www.boeing.com
NB2: These calculations are ROUGH. They are designed to give you a sense of how these figures are arrived at. Do not use them for any calculations. The assumptions would be very incorrect.
David L. Lamb, fmr Area Mgr Alitalia SFO 1998-2002, fmr Regional Analyst SFO-UAL 1992-1998