NorCalSF
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Air Canada Fleet Renewal Update

Thu Apr 14, 2005 5:44 pm

fyi from today's Wall Street Journal:

"Mr. Milton said Air Canada already has "attractive proposals" from both Boeing and Airbus and the competition between the manufacturers is "coming down to the final stages."

The new aircraft would replace 45 Boeing 767s over several years. If Boeing wins the bidding, Air Canada would also replace 20 Airbus wide-body aircraft. The airline also expects to gradually expand its total fleet, so a win for Boeing could mean orders for more than 65 planes, while an Airbus win would be for more than 45 jets. Mr. Milton said the airline may initially place firm orders for half of the aircraft, with the rest under option.

A centerpiece of the order would involve either the Boeing 787 Dreamliner, which won't be available for delivery until 2008, or the planned Airbus A350, slated to be ready in 2010. Meanwhile, if Air Canada chooses Boeing it will begin taking delivery of Boeing 777s next year, Mr. Milton said. If Airbus is chosen, it would begin delivering A330s next year, followed by A340s and later the A350, he said.

Mr. Milton stressed that the cost of the program would be spread out over many years. Also, the net cost to Air Canada will be significantly less than the amount of the order, because the carrier will be shedding aircraft that still have substantial value, he added."
 
captaingomes
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RE: Air Canada Fleet Renewal Update

Thu Apr 14, 2005 7:37 pm

This is one press release that I just can't wait to read. Milton is also correct, the 767's are very highly sought after, and I'm sure the A330's will easily find homes too.
"it's kind of like an Airbus, it's an engineering marvel, but there's no sense of passion" -- J. Clarkson re: Coxster
 
dalecary
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RE: Air Canada Fleet Renewal Update

Thu Apr 14, 2005 10:08 pm

Quoting Captaingomes (Reply 1):
Mr. Milton stressed that the cost of the program would be spread out over many years. Also, the net cost to Air Canada will be significantly less than the amount of the order, because the carrier will be shedding aircraft that still have substantial value, he added."

333s,343s and 345s would seem to have substantially more value and would be more sought after(read Indian market) than AC's 762/763 fleet.
Sebring has been right all along; I've been trying to argue the 787/340 split order case, but this article makes it clear that this contest is a winner take all. I can only surmise the 787 is the favourite over the 350 at AC(as it seems to be at most carriers), so an AC 777/787 order may very well be imminent. If this occurs, it really shows just how aggressive Boeing have become(because price will be very important here) and will really show the technical advantages of the 772LR/773ER/787 over the 345/346/350.
Still, it hasn't been officially announced, but a Boeing win here will be a huge blow to Airbus.
 
NYC777
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RE: Air Canada Fleet Renewal Update

Thu Apr 14, 2005 10:15 pm

Any word on when the announcement will be made?
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NorCalSF
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RE: Air Canada Fleet Renewal Update

Thu Apr 14, 2005 10:21 pm

Milton was quoted in the WSJ article that the announcement would be made in June. But it could also obviously be sooner.
 
aseem
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RE: Air Canada Fleet Renewal Update

Thu Apr 14, 2005 10:29 pm

if the order goes in favour of Boeing, then will they replace their newly acquired A345? And what about the A346 they've ordered.

IMHO! the order seems to be in favour of Boeing as very little is known about A350, which is also slated for delivery 2 years later than B787.

rgds
Aseem
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dalecary
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RE: Air Canada Fleet Renewal Update

Thu Apr 14, 2005 10:40 pm

Quoting Aseem (Reply 5):
if the order goes in favour of Boeing, then will they replace their newly acquired A345? And what about the A346 they've ordered.

Yep, if Boeing win this order, the AC WB fleet will be made up of 772LR/773ER and 787. As Milton points out, this will take quite a few years,which helps to spread the financial burden.
Of course, if Airbus wins, the 767 fleet gets replaced with 330/350. The order would be for 345/346HGW and 350.

Quoting Aseem (Reply 5):

IMHO! the order seems to be in favour of Boeing as very little is known about A350, which is also slated for delivery 2 years later than B787.

This is clearly the way I read it. The 350 better get itself officially launched and defined in a hurry if Airbus wants to be in the running in these key campaigns. Airbus has Leahy on their side, and he could still pull a near miracle, but his magic does seem to be fading a bit lately.
 
DeltaWings
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RE: Air Canada Fleet Renewal Update

Thu Apr 14, 2005 10:43 pm

If they go for the 777/787 deal, could we see an order for the 773 to replace the A346s? If so, AC would be the first airline in north america, which would have ordered the 773.


~DeltaWings
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AC320
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RE: Air Canada Fleet Renewal Update

Thu Apr 14, 2005 10:58 pm

I think it's a bit early to say who's going to win, I'm quite sure it can still go either way and will definitely go down to the wire. Either choice looks like it could be a win-win choice for AC considering the bidding war the airline seems to have started. Some points/questions:

1) The article mentions 2008 for the 787, but considering the number of orders Boeing secured ahead of Air Canada, any idea when the airline might actually start to take deliveries?

2) We haven't heard much about the A350, but then we aren't a large airline with potentially billions to invest in an aircraft program. With the 787 design becoming more and more concrete, I recall a user mentioning in another thread that Airbus might have more flexibility in offering design incentives tailored to AC's needs, in exchange for a large order and boost of confidence in the program. That would sure make one hell of an advertising campaign for AC: "Introducing Air Canada's new A350 service, tailor-made by Airbus to serve the needs of our passengers". AC might be able to pull some derivative of the A350 down to a better 767 replacements. Possible?

3) With Airbus licking its wounds after Korean and NW they might go and pull out all the stops regarding incentives to order regarding parts, maintenance, training, performance guarantees, discounts on future narrow body orders on existing lines or even future next-generation narrow body aircraft.

A 787 order would establish it as the clear winner and then some, and be Boeing's biggest coup in ages, while an A350 order would cement the relationship between AC and Airbus and breathe new life into the program. I think each manufacture still has a few cards to play, and while I can't say I'm confident who might get it, it's going to be one hell of a show!
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N79969
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RE: Air Canada Fleet Renewal Update

Thu Apr 14, 2005 11:08 pm

I certainly hope that they do go with Boeing. I think the 787 sale will be easier to make than 777. The 787 has something approaching estimated performance specs while the A350's specs are still in the realm of aspirational goals.

On the other hand, Air Canada already has A340s so adding to an existing fleet is a low-risk proposition for Air Canada. I have not kept up with what has gone on at Air Canada recent times.

Not that long ago, they were in very, very poor shape and now they are ordering new jets. Glad to hear it but would like to know what occured while my attention was elsewhere.
 
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yyz717
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RE: Air Canada Fleet Renewal Update

Thu Apr 14, 2005 11:16 pm

I'm not so sure the 333's will be highly sought after. They will only be attractive to existing RR 330 customers, or perhaps non-330 operators.

AC does not need to replace the 763 any time soon. The 763 remains in production and is not an inefficient aircraft. AC should consider retaining the 763 fleet for 10+ years to maximize the ROI. Moreover, AC has only just emerged from bankruptcy and has yet to report a profit (much to the disappointment of airline analysts) even with a partially depreciated 763 fleet, hence AC's ability to make a profit with a more expensive fleet of 787/350 aircraft is questionable.

AC should focus on generating a profit from its existing fleet before embarking on a large widebody order, however much Milton loves a press conference.
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bmacleod
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RE: Air Canada Fleet Renewal Update

Thu Apr 14, 2005 11:32 pm

I've heard rumors that AC's 340-500 are not performing to AC's expectations. Is this true?

It has been at least 15 years since AC last ordered from Boeing and this hopeful order would end this "drought".  pray 
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milan320
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RE: Air Canada Fleet Renewal Update

Thu Apr 14, 2005 11:38 pm

Quoting AC320 (Reply 8):
With Airbus licking its wounds after Korean and NW they might go and pull out all the stops regarding incentives to order regarding parts, maintenance, training, performance guarantees, discounts on future narrow body orders on existing lines or even future next-generation narrow body aircraft.

Add to that fact that Airbus could make AC and A350 launch customer - which has additional advantages.

/Milan320
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N79969
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RE: Air Canada Fleet Renewal Update

Thu Apr 14, 2005 11:46 pm

I think RR powered A330s would hold their own in the aftermarket. Maybe a company like Cathay Pacific or a Middle Eastern airline or even Lufthansa that is looking to add capacity at relatively low cost would be interested. Cathay picked up a few PW powered 744...
 
yul332LX
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RE: Air Canada Fleet Renewal Update

Thu Apr 14, 2005 11:54 pm

Quoting AC320 (Reply 8):
We haven't heard much about the A350, but then we aren't a large airline with potentially billions to invest in an aircraft program. With the 787 design becoming more and more concrete, I recall a user mentioning in another thread that Airbus might have more flexibility in offering design incentives tailored to AC's needs, in exchange for a large order and boost of confidence in the program. That would sure make one hell of an advertising campaign for AC: "Introducing Air Canada's new A350 service, tailor-made by Airbus to serve the needs of our passengers".

Yeah, I brought it up a couple of time. If AC selects Airbus' A350, it will be considered as one of the main factor methinks.
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yyz717
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RE: Air Canada Fleet Renewal Update

Fri Apr 15, 2005 12:13 am

Quoting N79969 (Reply 13):
I think RR powered A330s would hold their own in the aftermarket. Maybe a company like Cathay Pacific or a Middle Eastern airline or even Lufthansa that is looking to add capacity at relatively low cost would be interested. Cathay picked up a few PW powered 744...

CX & LH only buy new widebodies. I hardly see either CX or LH wanting to add used 333's. I just don't see 8 used RR 333's being of much use to any airline(s) any time quickly.

The used PW 744's for CX are for cargo conversion.
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sebring
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RE: Air Canada Fleet Renewal Update

Fri Apr 15, 2005 12:23 am


2) We haven't heard much about the A350, but then we aren't a large airline with potentially billions to invest in an aircraft program. With the 787 design becoming more and more concrete, I recall a user mentioning in another thread that Airbus might have more flexibility in offering design incentives tailored to AC's needs, in exchange for a large order and boost of confidence in the program. That would sure make one hell of an advertising campaign for AC: "Introducing Air Canada's new A350 service, tailor-made by Airbus to serve the needs of our passengers". AC might be able to pull some derivative of the A350 down to a better 767 replacements. Possible?

3) With Airbus licking its wounds after Korean and NW they might go and pull out all the stops regarding incentives to order regarding parts, maintenance, training, performance guarantees, discounts on future narrow body orders on existing lines or even future next-generation narrow body aircraft.




Actually, AC is a large airline, and it does have billions to spend (over several years, mind you). While not a freespender like EK, AC has clout, and it is well-positionned right now to use it. For example, if AC and LH buy 350s, it would supercharge what appears to be a moribund program. It would short-circuit Boeing attempt to short-circuit the 350.

So yes, it is possible that Airbus can make changes to suit its launch customers. The problem is, AC would want to err on making the lower capacity end of the plane's potential productive, while other potential customers like EK want a high capacity stretch. Still, Airbus must be getting desperate, and never underestimate their ability to throw a "Hail Mary pass". That's why this competition has become drawn out. It's camel trading time, and the heat is on bother vendors. Boeing can probably taste this deal, and they know that if a major Airbus customer defects, it will be a huge win that will figure into the thinking of other potential customers. It's becoming the bid neither offerer can afford to lose. Which is why AC is licking its chops.

I'm not so sure the 333's will be highly sought after. They will only be attractive to existing RR 330 customers, or perhaps non-330 operators.

You can't find an available used 333 on the planet. AC is very happy with these planes and they can be easily repositionned with other carriers. These are five-year-old planes, and well maintained by AC! They could be placed in a day.

AC should consider retaining the 763 fleet for 10+ years to maximize the ROI. Moreover, AC has only just emerged from bankruptcy and has yet to report a profit (much to the disappointment of airline analysts) even with a partially depreciated 763 fleet, hence AC's ability to make a profit with a more expensive fleet of 787/350 aircraft is questionable.


Some of AC's 763s are new, and won't be retiring any time soon. Then again, low-cycle, GE-powered 763s are in hot demand. However, since AC wouldn't get a 787 or 350 until 2010, and would begin by replacing much older 762s and 763s, those newer planes should be flying for AC for a decade.

AC should focus on generating a profit from its existing fleet before embarking on a large widebody order, however much Milton loves a press conference.


Blah, blah, blah.... AC needs more aircraft because it is positionning to be a primarily international carrier. That's the business plan that the creditors accepted. The Canadian government is negotiating new route opportunities to the fastest growing markets in the world - China and India. Air Canada doesn't have the planes to exploit these new opportunities, and it needs larger aircraft to better utilize its LHR, FRA and NRT slots, hence the interest in the 773-300ER or A346HGW.

Secondly, Air Canada, post restructuring, is virtually debt free, with only aircraft leases on its long-term debt. About half the lease value is in planes that would be off-loaded through this acquisition program. So the actual cost of the new aircraft would be mitigated by selling off the existing fleet and/or having lessors sublet to other carriers.

Thirdly, AC just completed a C$792 million sale of equity, and its stock price has almost doubled since emerging from bankruptcy protection last Sept 30. It has over C$2.2 billion in the bank, and AC will push that to as much as C$3.3 billion when it sells part of Aeroplan, probably in this calender quarter. This is clearly a good time to take on more aircraft, particularly since the deliveries will be staggered over a decade or more.

You don't wait in this business for perfect conditions to buy the aircraft you need or you will find yourself waiting 2-3 years for deliveries because every one of your competitors will be in the queue before you. And then they will be first to inaugurate the new routes you want to develop.

Also, most of AC's widebody fleet need interior upgrades to be competitive with those carriers offering amenties like in-seat video. It's much cheaper to do that with a new plane at the factory than it is to withdraw aircraft from service and put them through maintenance for a week or more. If AC goes for a new large widebody fleet, it will be saving a hundred million dollars or more that it currently plans to spend upgrading those 20 large Airbus planes.

Finally, Air Canada's ability to enhance its profitability is tied to its ability to grow. Yes, it can make money at currect capacity levels with the current fleet. However, many of the labor advantages it negotiated during its restructuring carry "kickers" that act as incentives to expand. For example, much of the growth labor, including all of the seasonal hiring it needs at airports to operate a lot more peak capacity, can now be done at particularly advantage pay rates. In the passenger agent contract, all new regular hiring for some time will be part time and temporary employees on a B scale, but over and above that, when vacations are granted to regular employees, they can be replaced by "vacation relievers" on a C scale. So if a regular employee is off on vacation, instead of having to replace them with another full-time A scale employee to do mundate chores like push a wheelchair or drive a cart or guide people to the right line (greeters), they can get a student in for several weeks on a C scale.

So if AC grows capacity, the result will be a lowering of unit costs, making all flying that much cheaper and increasing margins on profitable flying.
 
milan320
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RE: Air Canada Fleet Renewal Update

Fri Apr 15, 2005 12:27 am

Quoting YUL332LX (Reply 14):
Yeah, I brought it up a couple of time. If AC selects Airbus' A350, it will be considered as one of the main factor methinks.

As much as I hope that AC orders the A350, I think if AC order Boeing it might also reek of political pressuring in one form or another. I recall reading numerous times that Milton is pushing Ottawa and the Minister of Transport for the "Open Skies Agreement" between Canada and US to be validated (whereby AC could serve the US market with point-to-point service between US cities thereby bypassing ACs hubs in Canada). For the Americans to agree to something like this, I'm sure a Boeing order would help.

/Milan320
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PM
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RE: Air Canada Fleet Renewal Update

Fri Apr 15, 2005 12:36 am

Quoting Yyz717 (Reply 15):
I just don't see 8 used RR 333's being of much use to any airline(s) any time quickly.

At the end of 2004 Garuda were looking for three used 333s and expressly asked for RR versions. These eight planes wouldn't be hard to place.

What I find interesting is that the AC order for Airbus (if it goes that way) includes further 333s alongside the 350s. I'd been wondering if the 350 might completely supplant the 330 in sales. Seems not.
 
yul332LX
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RE: Air Canada Fleet Renewal Update

Fri Apr 15, 2005 12:42 am

Quoting NorCalSF (Reply 4):
Milton was quoted in the WSJ article that the announcement would be made in June. But it could also obviously be sooner.

June = Paris Air Show.

Makes sense.
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N60659
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RE: Air Canada Fleet Renewal Update

Fri Apr 15, 2005 12:52 am

Quoting Aseem (Reply 5):
IMHO! the order seems to be in favour of Boeing as very little is known about A350, which is also slated for delivery 2 years later than B787.



Quoting AC320 (Reply 8):
1) The article mentions 2008 for the 787, but considering the number of orders Boeing secured ahead of Air Canada, any idea when the airline might actually start to take deliveries?

Delivery slots for the 787 are already filled through 2009. If AC is one of the first carriers to order the A350, it would be available to them around 2010, the same time the earliest 787 delivery slot opens up.

Quoting N79969 (Reply 13):
I think RR powered A330s would hold their own in the aftermarket. Maybe a company like Cathay Pacific or a Middle Eastern airline

Here's a scenario. Boeing is in discussion with EK to provide 789s. However delivery slots are not available until 2012 (as currently being mentioned). Could Boeing take ACs RR powered A330s and place them with EK until the 789s become available?
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krisyyz
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RE: Air Canada Fleet Renewal Update

Fri Apr 15, 2005 12:53 am

Milton has said on numerous occasions that AC dose not particularly like the A343's. I've also seen A345s at the maintenance area at YYZ a lot, when it should be in the air.

Air Canada Technical services also just landed a huge Boeing 757/767 maintenance deal from United. Which will add to AC technical expertise in Boeing aircraft.

I think that the big question is who will give AC more financial support. Boeing has offered to buy AC's wide body Airbus fleet, which would add a lot of incentive towards a Boeing order. Also crew training, maintenance training and numerous other factors that come along with a new type will have to be added to an Boeing order. Having said that, I still think we will see B777 in AC's colours.

Krisyyz
 
zvezda
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RE: Air Canada Fleet Renewal Update

Fri Apr 15, 2005 12:56 am

Quoting N79969 (Reply 9):
Not that long ago, they were in very, very poor shape and now they are ordering new jets. Glad to hear it but would like to know what occured while my attention was elsewhere.

One of the factors is that passengers now need a visa just to transit the US. About 2/3 of the passengers who used to fly between Europe/Asia and Central/South America on US carriers now fly on AC. This is one seldom mentioned reason why the US legacy carriers are in such bad financial situations. The US gummint could easily bring back this business to the US by repealing their silly rules, but what's more important to bureaucrats? An extra million pax/year for US carriers or additional bureaucratic power?
 
boeingbus
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RE: Air Canada Fleet Renewal Update

Fri Apr 15, 2005 12:57 am

Quoting Milan320 (Reply 12):
Add to that fact that Airbus could make AC and A350 launch customer - which has additional advantages.

and additional disadvantages... we all know the sacrifices some airlines (Virgin, Singapore, SAA, Thai.. etc..) have gone through getting a newly designed Airbus plane. Sorry, but the truth hurts... Airbus has had a poor record launching new planes. Hence, one of the many reason why Virgin delayed the A380 plans.
Airbus or Boeing - it's all good to me!
 
United Airline
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RE: Air Canada Fleet Renewal Update

Fri Apr 15, 2005 12:59 am

Maybe some B 747 Advanced too? They were interested in a few second hand B 747-400s right?
 
mrcomet
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RE: Air Canada Fleet Renewal Update

Fri Apr 15, 2005 1:24 am

I would say Airbus has the advantage only because Boeing would have to buy the A330s. This means they probably have to dump them off reasonably cheap (I can't imagine Boeing working hard to sell or place an Airbus) as the A330s won't be so new when they actually are replaced. This whole transaction is a big disadvantage for Boeing. Airbus just needs to add 45 planes.

The fact that the A350 doesn't exist and might not exist is a problem for Airbus. The 787 really knocked a hole in the middle of the lineup.
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yyz717
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RE: Air Canada Fleet Renewal Update

Fri Apr 15, 2005 1:28 am

Quoting Sebring (Reply 16):
Boeing can probably taste this deal, and they know that if a major Airbus customer defects, it will be a huge win that will figure into the thinking of other potential customers.

I agree on this point. Airbus must be worried.

Quoting Sebring (Reply 16):
AC should focus on generating a profit from its existing fleet before embarking on a large widebody order, however much Milton loves a press conference.


Blah, blah, blah.... AC needs more aircraft because it is positionning to be a primarily international carrier. That's the business plan that the creditors accepted.

Blah blah blah yourself. The ONLY business plan that the creditors accepted was one that shows profit. This does not require massive international expansion. AC failed to report a profit in its most recent quarter (even with a large fleet of partially depreciated 763's). So much for the "business plan" to date. As for "positioning to be a primarily international carrier", the recent order for 30 CRJ's and 60 ERJ's would seem to belie that. Sounds like a domestic/transborder strategy to me.

Quoting Sebring (Reply 16):
it needs larger aircraft to better utilize its LHR, FRA and NRT slots, hence the interest in the 773-300ER or A346HGW.

AC does not need larger aircraft to serve these markets. It just needs profit. If the loads are 100%, raise the fares. It's not a market share game.

Quoting Sebring (Reply 16):
Secondly, Air Canada, post restructuring, is virtually debt free, with only aircraft leases on its long-term debt. About half the lease value is in planes that would be off-loaded through this acquisition program.

And yet, AC remains unprofitable. With a new fleet of 787's, debt load will increase as will interest/lease payments.

Quoting Sebring (Reply 16):
You don't wait in this business for perfect conditions to buy the aircraft you need or you will find yourself waiting 2-3 years for deliveries because every one of your competitors will be in the queue before you.

No, but you do wait until you can expand profitably. AC remains unprofitable.

Quoting Sebring (Reply 16):
Also, most of AC's widebody fleet need interior upgrades to be competitive with those carriers offering amenties like in-seat video. It's much cheaper to do that with a new plane at the factory than it is to withdraw aircraft from service and put them through maintenance for a week or more.

Not true. It is far more cost effective to refurbish your existing fleet if it can be flown efficiently for another 5-10 years.

Quoting Sebring (Reply 16):
Finally, Air Canada's ability to enhance its profitability is tied to its ability to grow.

No, AC's ability to enhance its profitability is tied to its ability to reduce costs. Westjet is far more profitable than AC despite a revenue base only 1/4 as large. AC grew massively from the mid-90's to 2002 and yet lurched into bankruptcy. There is no co-relation in the airline industry between growth and profit if the underlying business is unprofitable or poorly managed (as is AC).

Quoting Sebring (Reply 16):
So if AC grows capacity, the result will be a lowering of unit costs, making all flying that much cheaper and increasing margins on profitable flying.

Capacity growth has not been profitable for AC in the past 10 years, so there is nothing to suggest it will be now.

Quoting Sebring (Reply 16):
You can't find an available used 333 on the planet.

Not true. There is a healthy used 332/333 market with aircraft regularly spending some time in storage. The 3-engine option on the 330 makes each available RR, PW or GE aircraft harder to place since compatibility is less likely for each existing 330 customer. The ex-SSV 333's are currently available for lease, for instance.
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accargo
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RE: Air Canada Fleet Renewal Update

Fri Apr 15, 2005 1:29 am

Quoting KrisYYZ (Reply 21):
Milton has said on numerous occasions that AC dose not particularly like the A343's. I've also seen A345s at the maintenance area at YYZ a lot, when it should be in the air.

Air Canada Technical services also just landed a huge Boeing 757/767 maintenance deal from United. Which will add to AC technical expertise in Boeing aircraft.

I think that the big question is who will give AC more financial support. Boeing has offered to buy AC's wide body Airbus fleet, which would add a lot of incentive towards a Boeing order. Also crew training, maintenance training and numerous other factors that come along with a new type will have to be added to an Boeing order. Having said that, I still think we will see B777 in AC's colours.

The A340-500's have not been spending inordinate amounts of time in Mtce. The on-time dep. #'s for this acft type are within 2% of target.

The deal AC Tech Ops secured was with Delta, not United, and it was secured BECAUSE AC already has the technical expertise to do the job.

As has been stated quite frequently, the order will go to whomever gives AC the best deal. AC is in the drivers seat as both A and B need this big order (each for different reason). Pretty well every predication you see on airliners is just someones wishful thinking. I highly doubt that anyone outside of those involved in the actual negots knows what's on offer from each manufacturer.

All that being said, I'd like to see a B-777 in AC colours, or also a A340-600HGW too.
 Smile
 
sebring
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RE: Air Canada Fleet Renewal Update

Fri Apr 15, 2005 1:35 am

Air Canada Technical services also just landed a huge Boeing 757/767 maintenance deal from United. Which will add to AC technical expertise in Boeing aircraft.

ACTS also has a new priviledged relationship with Airbus as a worldwide preferred maintenance provider.


Maybe some B 747 Advanced too? They were interested in a few second hand B 747-400s right?

Not in a million years. Too big.
 
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yyz717
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RE: Air Canada Fleet Renewal Update

Fri Apr 15, 2005 1:45 am

Quoting Accargo (Reply 27):
As has been stated quite frequently, the order will go to whomever gives AC the best deal. AC is in the drivers seat as both A and B need this big order (each for different reason). Pretty well every predication you see on airliners is just someones wishful thinking. I highly doubt that anyone outside of those involved in the actual negots knows what's on offer from each manufacturer.

Well hopefully in addition to A or B, there is a 3rd "do nothing" option. AC seems to be caught in an orgy of new aicraft ordering but there is no underpinning profit within the airline to pay for all these aircraft.

Quoting Accargo (Reply 27):
All that being said, I'd like to see a B-777 in AC colours, or also a A340-600HGW too.

I would also. Although a 346 in mint green might be hard to stomach though.
I dumped at the gybe mark in strong winds when I looked up at a Porter Q400 on finals. Can't stop spotting.
 
jacobin777
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RE: Air Canada Fleet Renewal Update

Fri Apr 15, 2005 1:52 am

For some reason, I see Airbus getting this order (just a hunch, and I hope I'm wrong), but it seems Boeing has been too much on a roll...the tide does turn eventually..and as mentioned above, the A350 could have lots of input from AC...

that being said, 777's on an AC frame would look really, really nice.. Big grin

ok.....doesn't AC have nonstop flights to India which are ETOPS restricted? If they do, how would the 777's or 787's deal with them?
"Up the Irons!"
 
Cruiser
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RE: Air Canada Fleet Renewal Update

Fri Apr 15, 2005 2:15 am

Quoting N60659 (Reply 20):
Delivery slots for the 787 are already filled through 2009. If AC is one of the first carriers to order the A350, it would be available to them around 2010, the same time the earliest 787 delivery slot opens up.

Boeing has stated publicly (a while back) that they had a number of airlines putting down deposits just so that they could reserve slots. I don't know this for sure, but I would assume that AC might have done this way back just in case they go ahead with the 787/777 proposal.
Leahy on Per Seat Costs: "Have you seen the B-2 fly-by at almost US$1bn a copy? It has only 2 seats!"
 
milan320
Posts: 818
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RE: Air Canada Fleet Renewal Update

Fri Apr 15, 2005 2:34 am

Quoting BoeingBus (Reply 23):
and additional disadvantages... we all know the sacrifices some airlines (Virgin, Singapore, SAA, Thai.. etc..) have gone through getting a newly designed Airbus plane. Sorry, but the truth hurts... Airbus has had a poor record launching new planes. Hence, one of the many reason why Virgin delayed the A380 plans.

I guess I wasn't clear enough, when I meant "advantages" I meant price advantages, etc.
/Milan320
I accept bribes ... :-)
 
AC320
Posts: 2809
Joined: Fri Jan 05, 2001 11:29 pm

RE: Air Canada Fleet Renewal Update

Fri Apr 15, 2005 2:40 am

Quoting BoeingBus (Reply 23):
Hence, one of the many reason why Virgin delayed the A380 plans.

I don't recall Airbus being specifically mentioned in Virgin's statements about delays, all I heard was specific airports would not be 100% ready, nor could Virgin receive the cabin designs it wanted right away. I don't see that being in Airbus' direct control. Could you clarify? I might not have read all the relevant news
fuddle duddle
 
boeingbus
Posts: 1509
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RE: Air Canada Fleet Renewal Update

Fri Apr 15, 2005 2:41 am

Quoting Milan320 (Reply 32):
I meant price advantages

Airbus and Boeing are going to fight this one out. From reading numerous articles Boeing is no longer taking anything for granted so they are both going to be aggressive with pricing and it will be a good flight.

But I must say, that Airbus is finding it tough to compete with the performance and maintenance guarantees. Boeing is handing this to airlines free of charge and Airbus may not be able to compete in this area. Advantage: Boeing.

Airbus is going to have to sell those suckers with very little profits, if any at all.
Airbus or Boeing - it's all good to me!
 
sebring
Posts: 1320
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RE: Air Canada Fleet Renewal Update

Fri Apr 15, 2005 2:47 am

To yyz717:


Blah blah blah yourself. The ONLY business plan that the creditors accepted was one that shows profit. This does not require massive international expansion. AC failed to report a profit in its most recent quarter (even with a large fleet of partially depreciated 763's). So much for the "business plan" to date. As for "positioning to be a primarily international carrier", the recent order for 30 CRJ's and 60 ERJ's would seem to belie that. Sounds like a domestic/transborder strategy to me.


Refer to the short form prospectus, dated July 12, 2004. You will find it on Sedar.com or AC's website. This is what the creditors voted on.

Turn to page 53.

It reads as follows:

"The second component of the new business plan focuses on the redesign of the Air Canada network. This multi-faceted plan includes increased international flying to new international destinations, and altered aircraft utilization. Air Canada plans to maintain frequency on key domestic and transborder markets, while reducing its capacity on in these markets through the use of smaller regional jet aircraft. These smaller aircraft with lower trip costs are expected to enable Air Canada to compete more effectively with lower cost carriers."

AC does not need larger aircraft to serve these markets (FRA, LHR, NRT). It just needs profit. If the loads are 100%, raise the fares. It's not a market share game.


A larger plane lowers the cost, since as you undoubtedly know, AC is flying a number of multi-frequency routes that could be combined. It would be much more cost effective, for example, to combine a pair of YUL-LHR frequencies or YYC-LHR frequencies, currently 400 seats in the summer, and offer 320 seats on a single 346-300HGW. Then you would get both unit cost and unit revenue benefits.
 
N60659
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RE: Air Canada Fleet Renewal Update

Fri Apr 15, 2005 3:16 am

Quoting Cruiser (Reply 31):
Boeing has stated publicly (a while back) that they had a number of airlines putting down deposits just so that they could reserve slots. I don't know this for sure, but I would assume that AC might have done this way back just in case they go ahead with the 787/777 proposal.

Good point. My statement was a refererence that was made several times:

The first two years of production slots for the 787 already are filled with orders for the 787-8 model, the spokeswoman said.

The entire article can be found here.
Currently, Boeing has confirmed commitments for 64 orders (not including the recent KE order of 10 airframes). Of these 30 are for the 783 which (according to the article) will not be delivered to NH prior to 2010. My assumption was that the remaining 34 airframes would fill the time period between 2008 and 2009. You could be right though and my statement could be construed more as a worst case. Thanks for the comment.
Nec Dextrorsum Nec Sinistrorsum
 
AC_B777
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RE: Air Canada Fleet Renewal Update

Fri Apr 15, 2005 5:07 am

If Boeing won the contract, then yes, they would be responsible to dispose of the A333, A343, A345's, not AC. It would not be AC's problem as to how or what Boeing did with these a/c.
I have heard numberous times actually that Boeing is the largest single owner of Airbus equipment. As to what Boeing does with these Airbus planes, I have no idea.
In life, some days you are the bug..... some days you are the windshield!
 
starrion
Posts: 972
Joined: Sat Jul 19, 2003 1:19 pm

RE: Air Canada Fleet Renewal Update

Fri Apr 15, 2005 5:32 am

Quoting N60659 (Reply 36):
Currently, Boeing has confirmed commitments for 64 orders (not including the recent KE order of 10 airframes). Of these 30 are for the 783 which (according to the article) will not be delivered to NH prior to 2010. My assumption was that the remaining 34 airframes would fill the time period between 2008 and 2009. You could be right though and my statement could be construed more as a worst case. Thanks for the comment.

As I understand it the delivery slots are reserved based on the deposits. Boeing has said they have more than 250 of those. They do have 203 announced commitments. They have indicated that it will take them 3 days to do final assembly, so I think it will be far more than 34 frames in 18 months.
Knowledge Replaces Fear
 
LifelinerOne
Posts: 1497
Joined: Tue Nov 25, 2003 10:30 pm

RE: Air Canada Fleet Renewal Update

Fri Apr 15, 2005 5:36 am

Quoting BoeingBus (Reply 23):
Hence, one of the many reason why Virgin delayed the A380 plans.

Rubbish, Virgin delayed delivery of their A380's because their new interiors wouldn't be ready in time. They needed more time to invent an exciting interior.

Cheers!
Only Those Who Sleep Don't Make Mistakes
 
milan320
Posts: 818
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RE: Air Canada Fleet Renewal Update

Fri Apr 15, 2005 5:44 am

Quoting AC_B777 (Reply 37):
I have heard numberous times actually that Boeing is the largest single owner of Airbus equipment. As to what Boeing does with these Airbus planes, I have no idea.

How's that work legally anyway? Isn't there proprietary and confidential information (in terms of software, etc.) that Boeing could use to their advantage and Airbus too if they buy Boeing planes? Just a thought.
/Milan320
I accept bribes ... :-)
 
Cruiser
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RE: Air Canada Fleet Renewal Update

Fri Apr 15, 2005 5:48 am

Quoting Starrion (Reply 38):
As I understand it the delivery slots are reserved based on the deposits. Boeing has said they have more than 250 of those. They do have 203 announced commitments. They have indicated that it will take them 3 days to do final assembly, so I think it will be far more than 34 frames in 18 months.

However, it is impossible for us to know just how many slots there are. How many planes can they work on at one time? I would guess a few because Everett has one massive assembly plant. As well, are the employees going to be working weekends with their recent 'efficiencies' they have announced? It is impossible to guess how many will be assembled in each year! If I were a betting man, I wouldn't bet anything on the number of slots simply because I have no clue!
Leahy on Per Seat Costs: "Have you seen the B-2 fly-by at almost US$1bn a copy? It has only 2 seats!"
 
Alitalia744
Posts: 3777
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RE: Air Canada Fleet Renewal Update

Fri Apr 15, 2005 6:01 am

Quoting LifelinerOne (Reply 39):
Rubbish, Virgin delayed delivery of their A380's because their new interiors wouldn't be ready in time. They needed more time to invent an exciting interior.

Cheers!

if you believe that, I've got some pot of golds to sell you too.
Some see lines, others see between the lines.
 
LifelinerOne
Posts: 1497
Joined: Tue Nov 25, 2003 10:30 pm

RE: Air Canada Fleet Renewal Update

Fri Apr 15, 2005 6:19 am

Quoting Alitalia744 (Reply 42):
if you believe that, I've got some pot of golds to sell you too.

Maybe because I know some of the work on the Virgin cabins is being done right here at a company in The Netherlands?

Cheers!
Only Those Who Sleep Don't Make Mistakes
 
airfrnt
Posts: 2002
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RE: Air Canada Fleet Renewal Update

Fri Apr 15, 2005 6:28 am

Quoting LifelinerOne (Reply 39):

Rubbish, Virgin delayed delivery of their A380's because their new interiors wouldn't be ready in time. They needed more time to invent an exciting interior.

If you believe that I have a bridge on the Seine I would like to sell you.

My gut reaction is that this sales campaign will be make or break for the A350. Boeing has a huge setup here. They can pick up these A33X's and lend them to Northwest put winglets on the 762s and sell a few high end 777s for one nice little sales job that gives Airbus a black eye.

Airbus on the other hand not only has to sell AC the A350, they have to convince AC that the A350 will be a successfully plane, not at all like the A330s that they are currently having problems with. They also have to convince AC that if AC is a launch customer that they will nail down enough other customers that the plane really will take flight, and they have to get winglets on the 762s.

For Leahy to nail his 100 order goal he has to lock this deal down. Airbus is very very good when backed in a corner.
 
yul332LX
Posts: 798
Joined: Sat Feb 07, 2004 5:15 am

RE: Air Canada Fleet Renewal Update

Fri Apr 15, 2005 6:29 am

Quoting Alitalia744 (Reply 42):
Quoting LifelinerOne (Reply 39):
Rubbish, Virgin delayed delivery of their A380's because their new interiors wouldn't be ready in time. They needed more time to invent an exciting interior.

Cheers!

if you believe that, I've got some pot of golds to sell you too.

Lifeliner's right. It was confirmed again last week in AW. Under the current design freeze plan, airlines must confirm to Airbus the cabin configuration 24 months before start of assembly of the A380.

It was impossible for VS to respect this two years rule with the delays encountered by VS's main cabin supplier.
E volavo, volavo felice più in alto del sole, e ancora più su mentre il mondo pian piano spariva lontano laggiù ...
 
Dimsum
Posts: 90
Joined: Fri Jan 14, 2005 8:44 am

RE: Air Canada Fleet Renewal Update

Fri Apr 15, 2005 7:11 am

Quoting Milan320 (Reply 40):
How's that work legally anyway? Isn't there proprietary and confidential information (in terms of software, etc.) that Boeing could use to their advantage and Airbus too if they buy Boeing planes?

Yea, that's a good point that I've been wondering since day one. I'm an electrical engineer so, personally, I think that the proper safeguards have been placed in the software and hardware such that reverse engineering is near impossible (unless you're willing to dedicate most of your company's efforts to do it). If this can't be done, why cant Toyota go and steal the traction system from a Volvo or BMW, right? Same with small electronics like cellular phones. Besides, if Airbus DID develop a breakthrough system or software, they would patent it.

Anyways, back to the topic of the forum, I really don't know where AC will be getting the money to pay for this. Don't they also have to pay for the EMB170s that are coming in?

Despite all of this, I would really like to see some 772ERs at YVR. I think they would look good in the mint green.
 
CPDC10-30
Posts: 4681
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RE: Air Canada Fleet Renewal Update

Fri Apr 15, 2005 8:04 am

they have to convince AC that the A350 will be a successfully plane, not at all like the A330s that they are currently having problems with

Everything I've heard from AC is that they are very happy with their A330-300s on the transatlantic routes. Don't forget that this is AC's highest pax capacity aircraft at the moment (when in the summer config).

If AC does indeed complete a deal wth Boeing, I doubt that there would be more than four 777-200LRs in the mix - it is just way too much airplane for most of ACs routes (and is pricey). The 777-200ER can do everything the A340-300 can, but with more payload (on current routes such as YYZ-DEL and the upcoming YYZ-ICN).

Its would be hard to imagine this situation just a couple years ago, but it looks almost like an impossible deal for Boeing to miss if they are being flexible taking back AC's Airbus widebodies. There is so little information available on the A350 that you can't help but wonder if Airbus is digging their own grave by placing all the attention on the A380.
 
yul332LX
Posts: 798
Joined: Sat Feb 07, 2004 5:15 am

RE: Air Canada Fleet Renewal Update

Fri Apr 15, 2005 8:17 am

Quoting Dimsum (Reply 46):
Yea, that's a good point that I've been wondering since day one. I'm an electrical engineer so, personally, I think that the proper safeguards have been placed in the software and hardware such that reverse engineering is near impossible (unless you're willing to dedicate most of your company's efforts to do it). If this can't be done, why cant Toyota go and steal the traction system from a Volvo or BMW, right? Same with small electronics like cellular phones. Besides, if Airbus DID develop a breakthrough system or software, they would patent it.

Careful there... most of the 787 is actually designed by Boeing with... a French software, CATIA.

Add to that the fact that over 70% of the construction of the 787 is outsourced and you will see that Boeing can hardly control or patent all improvements or new systems. Boeing certainly tries to patent as much as it can, but it's very difficult to restrict your subcontractors from providing Airbus with a specific service/patent, especially when these subcontractors financed themselves most of the R&D related to their newly-patented part.

The same can be said about Airbus obviously.
E volavo, volavo felice più in alto del sole, e ancora più su mentre il mondo pian piano spariva lontano laggiù ...
 
PacificWestern
Posts: 517
Joined: Sun Aug 01, 2004 3:30 am

RE: Air Canada Fleet Renewal Update

Fri Apr 15, 2005 8:57 am

Perhaps former Prime Minister Brian Mulroney could be called in to help solidify a deal with Airbus?  innocent 

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