Aviationhack
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Will The A380/7e7 Affect Airfares?

Tue Jan 25, 2005 6:19 am

I did a search on this subject but didn't find anything, so I apologize if it's already been discussed.

Will the A380 and B7e7 affect airfares and put carriers that don't operate either or both at a disadvantage as far as being able to drop fares, and still turn a profit?

So far as I can see the airlines that are hurting financially and cannot afford new aircraft will be in worse shape than they are now if B and A can meet the efficiency that they say their new aircraft will achieve, and the financially sound airlines that are making money get a newer, highly efficient fleet.

Please don't turn this into an A v B war, this subject has nothing to do with either manufacturer, only how new highly economical aircraft will affect fares, and airline profits.

Chris
 
karan69
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RE: Will The A380/7e7 Affect Airfares?

Tue Jan 25, 2005 6:33 am

I read somewhere that AF will reduce their fares on their A380 routes first by 15% and then latter by 25-30%.
I dont know about the B7e7 though---but it is likely that fares should reduce with the introduction of such aircrafts
 
mt99
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RE: Will The A380/7e7 Affect Airfares?

Tue Jan 25, 2005 7:01 am


A380

I doubt it, since for a particular route:

If the number of passenegers increases by the same amount of seats offered, then expect no change. And the since this is the underlying reason for such a big aircraft, it probably the most likely.

If the number of passengers is mainteined, and the capacity increased, then yes it may mean cheaper tickets. But since the A380 claims to be 15% that the B747 (that it is supposed to be replacing) it means that the A380 doesnt have to be 100% full to put it in a disadvantageous (is that even a word?) position to the B747 from a revenue point of view (assuming both lease/buy term are the same, which are probably not). Well thinking through this was more complicated than i thougth..

7E7

Probably higher fares. I mean you are paying for convinience right? Fly secondary city to secondary city, no hub.. how much more are you willing to pay?

Also, it may only cost a 50 cents to fly the 7E7 from City A to City. While a 767 may cost the airline 75 cents.. but if people are willing to pay 1.50 for the trip.. why would you give away your increased profit?

For Both

Planes may be cheap or to operate, but it all depends on how much money airlines want to make. IN the end that is what it is all about.
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Thrust
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RE: Will The A380/7e7 Affect Airfares?

Tue Jan 25, 2005 7:09 am

If anything, I can only imagine that the A380 and the 7E7 will be making airfares cheaper, since they will be the most fuel efficient airliners in the skies in a few years.
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ConcordeBoy
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RE: Will The A380/7e7 Affect Airfares?

Tue Jan 25, 2005 7:12 am

Fly secondary city to secondary city, no hub..

Doubtful, at least anytime soon.


A lot of misleading propaganda from Boeing on this as well....

....you're not going to see C-to-C routes like CLE-LYS in the foreseeable future, but instead of CLE-EWR-CDG-LYS, you might see A-to-C or C-to-A routing possibilities such as CLE-CDG-LYS or CLE-EWR-LYS, etc.
Faire du ciel le plus bel endroit de la terre c'est impossible sans Concorde!
 
atmx2000
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RE: Will The A380/7e7 Affect Airfares?

Tue Jan 25, 2005 8:49 am

Agreed, as long as the capital costs for smaller efficient long range jets are relatively high, you will only see a reduction of stops between city pairs by somewhere around one stop on average. What might occur is that the stops one goes through may lay increasingly closer to the great circle route between secondary cities, which will hopefully mean a reduction in time and fuel costs for moving a passenger between CITIES.
ConcordeBoy is a twin supremacist!! He supports quadicide!!
 
Boeing7E7
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RE: Will The A380/7e7 Affect Airfares?

Tue Jan 25, 2005 8:59 am

It depends on how airlines use them. They can stack them full of pax to drive down unit costs, or they can use a slightly lowered unit cost structure and change passenger comfort for the better. Time will tell.

Doubtful, at least anytime soon.


A lot of misleading propaganda from Boeing on this as well....

....you're not going to see C-to-C routes like CLE-LYS in the foreseeable future, but instead of CLE-EWR-CDG-LYS, you might see A-to-C or C-to-A routing possibilities such as CLE-CDG-LYS or CLE-EWR-LYS, etc.


You are so wrong Concorde I don't even know where to start. Look at Southwest, now give it some steroids. Nuff said.


[Edited 2005-01-25 01:05:26]
 
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Francoflier
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RE: Will The A380/7e7 Affect Airfares?

Tue Jan 25, 2005 10:43 am

The A380 and the 7e7 are and will be great aircrafts, but only for the airlines and the aircraft spotters...

Them being cheaper to fly per seat is why AIRLINES will buy them => more margins for THEM...

We'll keep paying the same price for our tickets I'm pretty sure, and being aboard one of those won't be much different to us as to being in any 777 or A340...

Call me pessimistic, but hey, if it helps the airlines getting back on their feet at least...
I'll do my own airline. With Blackjack. And hookers. In fact, forget the airline.
 
charlib52
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RE: Will The A380/7e7 Affect Airfares?

Tue Jan 25, 2005 10:50 am

I actually hope they don't lower fares and keep them the same (which is pretty cheap with the good fares), and use any differential to buoy their banks. I'm not a financial analyst, but I think that for the first few years of a new aircraft the expense of owning it will probably equalize any extra effciencies when compared to an older aircraft that costs them less in taxes, payments and interest, but is not as efficient. The savings come a bit later after the first few years of ops I would believe -- just an educated guess.
 
Rj111
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RE: Will The A380/7e7 Affect Airfares?

Tue Jan 25, 2005 10:56 am

You are so wrong Concorde I don't even know where to start. Look at Southwest, now give it some steroids. Nuff said.

He's right. If there was demand for CLE-LYS you bet they'd be flying it right now with a 767. Just because a 7e7 reduces operating costs doesn't mean airlines will want to reduce maximum profit.

[Edited 2005-01-25 03:03:15]