Turbojet
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AC's Used 345 Source And Related Impact On A&B

Mon Jun 20, 2005 8:18 am

Well.. It looks like we won't see another AC "surprised" re-order drama any time soon. If AC were to reorder the cancelled deal, it is too obvious the management is playing some sort of game.

Let's say AC now has to secure some used A340-500. Where will they come from? SQ? Or maybe the three from CX with new pilots to fly them.

Maybe this cancellation isn't so bad for B. With AC's financial situation, B might've already figured out too low the likelihood of such a big order to be actually materialized. So B plays along. It might be B's strategy to purge SQ or CX's A340 and then sell 777ER/LR to them.

As far as AC goes, there are not many used A340-500 free for sale now. So the price to get them won't be cheap. SQ and ILFC (CX) can dump them with good price. I think in the long run, AC will be hurt by their A340 fleet due to multiple engines and lower residual value (less airlines interests). They should replace A340 with twin-engine metals from either A or B ASAP.
 
yul332LX
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RE: AC's Used 345 Source And Related Impact On A&B

Mon Jun 20, 2005 8:29 am

Quoting Turbojet (Thread starter):
Or maybe the three from CX with new pilots to fly them.

Those are A346s.  Wink
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AC787
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RE: AC's Used 345 Source And Related Impact On A&B

Mon Jun 20, 2005 8:29 am

Quoting Turbojet (Thread starter):
Maybe this cancellation isn't so bad for B. With AC's financial situation

AC is in very good financial situation and many legacy carriers in the US would love to be able to recreate what AC did when it was restructuring. Not only do they not have much debt, but they are modernising there narrowbody fleet, installing IFE in all there planes, and simplifying there fares as well as reducing there cost structure. I just hope something can be worked out and this deal can come back on track.

Quoting Turbojet (Thread starter):
So B plays along. It might be B's strategy to purge SQ or CX's A340 and then sell 777ER/LR to them.

How's Boeing playing along? They've just released a press release, what would u expect them to do? I'm sure there VERY dissapointed with this cancellation. If you've been looking on the boeing 787 page you'd notice the order they'd been giving the most attention too was the AC one, if you look even today, the AC order is the main one they show on the 787 page. I'm sure the folks at boeing are shaking there heads on this sunday night.

Quoting Turbojet (Thread starter):
They should replace A340 with twin-engine metals from either A or B ASAP.

Can't replace the 340's in the fleet from Airbus, the 340 is what they would suggest. They might add some 340-600's but the other variants would stay. As for replacing them with Boeings, well that would mean the deal coming back through... That would be my hope
 
Rj111
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RE: AC's Used 345 Source And Related Impact On A&B

Mon Jun 20, 2005 8:31 am

Well, CX don't even have A345's. And they've got quite a long contract with RR on Trent 500 maintenance for their A346's.

Quoting Turbojet (Thread starter):
As far as AC goes, there are not many used A340-500 free for sale now. So the price to get them won't be cheap. SQ and ILFC (CX) can dump them with good price. I think in the long run, AC will be hurt by their A340 fleet due to multiple engines and lower residual value (less airlines interests). They should replace A340 with twin-engine metals from either A or B ASAP.

See i always thought they should just stick with the A340/A330. It (A340) might not be as good as the 777 but it ain't the worst thing in the world. There are many airline operating it profitably, and the hassle of switching the entire fleet from A to B i predicted to be too great.
 
fallingeese
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RE: AC's Used 345 Source And Related Impact On A&B

Mon Jun 20, 2005 8:36 am

It has nothing to do with the cost of transfering to a Boeing longhaul fleet. It was due to the pilots rejecting the conditions of training on the new aircraft and how they would be paid for it.
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Turbojet
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RE: AC's Used 345 Source And Related Impact On A&B

Mon Jun 20, 2005 8:41 am

Quoting YUL332LX (Reply 1):

I was wondering if AC could get CX's 346 and hire new pilots to fly them. 346 would have the same issue with the union pilots flying larger planes.
 
AC787
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RE: AC's Used 345 Source And Related Impact On A&B

Mon Jun 20, 2005 8:47 am

Quoting Turbojet (Reply 5):
I was wondering if AC could get CX's 346 and hire new pilots to fly them

Unions tend to not react well when the company hires new ppl to get around things they dislike  Wink
 
AF-A319
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RE: AC's Used 345 Source And Related Impact On A&B

Mon Jun 20, 2005 8:50 am

The cancellation of the AC's Boeing order may have a positive impact on the residual value of the A340-500 and of the -600 to a lesser extent. And that's a good pice of news for all A340NG current and future operators. (and for Airbus as well obviously!)

As for Boeing, I can't wait to see which customer(s) willl take over AC's early 777 delivery slots.
 
AC787
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RE: AC's Used 345 Source And Related Impact On A&B

Mon Jun 20, 2005 8:52 am

Quoting AF-A319 (Reply 7):
As for Boeing, I can't wait to see which customer(s) willl take over AC's early 777 delivery slots.

Hopefully its Air Canada  Smile
 
jacobin777
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RE: AC's Used 345 Source And Related Impact On A&B

Mon Jun 20, 2005 9:13 am

maybe AI will take the earlier deliver slots now...or possibly EK or QR....
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boeingbus
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RE: AC's Used 345 Source And Related Impact On A&B

Mon Jun 20, 2005 9:18 am

This news article is suggesting that AC will opt for used 777...

http://www.businessweek.com/ap/finan...KO00.htm?campaign_id=apn_home_down

"Brewer said the company will look to the used market to find three 777s it needs for the planned Asian service."

This just maybe the silver living to this bad news for Boeing as they are going to become a 777 operator in the future and not A340.

Cheers
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AC777LR
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RE: AC's Used 345 Source And Related Impact On A&B

Mon Jun 20, 2005 10:01 am

Quoting BoeingBus (Reply 10):
"Brewer said the company will look to the used market to find three 777s it needs for the planned Asian service."

I think that he said that he would look for planes from the used market that would fill in for the three 777s that where to come next year.
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yyz717
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RE: AC's Used 345 Source And Related Impact On A&B

Mon Jun 20, 2005 1:16 pm

3 used 777's? with the same commonality that AC wants for its future orders? good luck to AC on that one. used GE 772's are hard to find.

I still think the AC 777/787 order will proceed as planned.
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ac7e7
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RE: AC's Used 345 Source And Related Impact On A&B

Mon Jun 20, 2005 1:47 pm

Quoting Yyz717 (Reply 12):
I still think the AC 777/787 order will proceed as planned.

Even though I am disappointed, I agree with you on this one. The order will probably go through anyway. AC wants these Boeing aircraft. They will just re-order the same delivery slots. I think this cancellation really affects the 777 and not the 787s. The 787 can be reordered in the future anyway, but the 777s are needed next year. There are plenty of UA 777 in the desert right now. Granted they are -200s but they may fill some of the capacity gap in the short term.
 
blsbls99
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RE: AC's Used 345 Source And Related Impact On A&B

Mon Jun 20, 2005 1:54 pm

So, help me understand...if AC gets used 777s, how does that change the pilot's training and pay that they just voted on??
Also, aren't all of the ex-United 777s that were stored in the desert taken up by other carriers (Varig and Air India)???
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PM
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RE: AC's Used 345 Source And Related Impact On A&B

Mon Jun 20, 2005 3:12 pm

Quoting Yyz717 (Reply 12):
3 used 777's? with the same commonality that AC wants for its future orders? good luck to AC on that one. used GE 772's are hard to find.

They actually said they want three 'used' 777-300ERs next year. Who might lease them a few? AF? EK? It's a necessarily small list!

Anyway, used GE 777s are no harder to find than PW and certainly easier to acquire than RR. Varig's GE planes come and go, BA has disposed of two GE 777s and Aeroflot's two were on the market recently. I can't think of any RR examples changing hands yet.
 
Scorpio
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RE: AC's Used 345 Source And Related Impact On A&B

Mon Jun 20, 2005 6:28 pm

Quoting PM (Reply 15):
They actually said they want three 'used' 777-300ERs next year.

I'm sorry, but where did they say that? From what I read, they said they needed 3 planes to fill in for the three 777s that were normally to be delivered next year. 3 planes. Not 3 777s, and certainly not -300ERs.
 
A350
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RE: AC's Used 345 Source And Related Impact On A&B

Mon Jun 20, 2005 8:16 pm

I think if they don't re-order its probably bad for AC simply because it seems that AC got a once-in-a-lifetime deal and they will never get it again. 46 B787 options for just a few orders, that's sweet.

A350
 
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RE: AC's Used 345 Source And Related Impact On A&B

Mon Jun 20, 2005 8:53 pm

Quoting Scorpio (Reply 16):
I'm sorry, but where did they say that? From what I read, they said they needed 3 planes to fill in for the three 777s that were normally to be delivered next year. 3 planes. Not 3 777s, and certainly not -300ERs

Quite right. My mistake. I read the statement in a hurry and got it wrong. What I read was:

we will seek to find alternative aircraft (of types covered by the current collective agreement) in the used market for the three 777-300ER aircraft contemplated for 2006 delivery under this order (two for Q2/06 and a third during Q4/06). We will adjust our plans and it is anticipated that the company will continue to grow on an unaltered basis.

I must admit, it seemed strange - and improbable - that they'd find used 773ERs next year. Thanks for making me go back and read it more carefully. ashamed 

OK, so what'll they get? More A330s? The three A346s they delayed?
 
beechnut
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RE: AC's Used 345 Source And Related Impact On A&B

Mon Jun 20, 2005 8:54 pm

I have a suspicion the order is not dead yet. Air Canada is simply calling the pilot's bluff. AC really needs to sort out the mess in its widebody fleet. The 767s are a mish-mash of -200s, AC ordered -333s (both series with P&W engines) plus GE-powered ex-CP -375s and a batch of used aircraft. The 747 fleet (now gone) was a similar mess with P&W powered AC combis and GE powered ex-CP -475s.

The A345 is not really economical and its only claim to fame is its ultra long range. I doubt AC would want to add more of these to the fleet. Perhaps they could revive the A346 order but I doubt it. They'd have a mix of A340-300s of different variants and range, plus 500s and 600s. Then there are the A330s as well. The Boeing order was to replace all of this with two major sub-types, the 777 and 787, with much better commonality.

They also want to start cargo service with dedicated aircraft and the 777 freighters were part of this plan. The freighters were also part of a pilots agreement that AC could subcontract the cargo service for a couple of years until it received its own dedicated aircraft. Watch the negotiations begin: AC will say to the pilots "screw you, we won't buy our own cargo fleet now, we'll simply continue subcontracting". Unfortunately labour relations is a major weak spot in AC and there is still much animosity between labour and management from the merger with CP.

Meanwhile the A340s will continue to slog along at M0.82 with tech stops along the way on the long-haul runs, and the A345s will continue to accrue downtime and operating expenses.

Beech.
 
keesje
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RE: AC's Used 345 Source And Related Impact On A&B

Mon Jun 20, 2005 9:15 pm

Boeing had offered to buy all AC Airbusses.

3 346's at order would be cancelled..
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Planesmart
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RE: AC's Used 345 Source And Related Impact On A&B

Mon Jun 20, 2005 9:40 pm

Quoting AC787 (Reply 2):
If you've been looking on the boeing 787 page you'd notice the order they'd been giving the most attention too was the AC one, if you look even today, the AC order is the main one they show on the 787 page. I'm sure the folks at boeing are shaking there heads on this sunday night.

According to many on a.net, B orders are firm contracts, with non-refundable deposits. Only firm orders appear on the B web site. SEC definition of an order is far tougher than that accepted in Europe.

How can this B order be cancelled? Well, just like A so-called orders, SEC or not, the vast majority are options / intentions.

If the 787 doesn't meet performance targets, is late or ends up more expensive, B will be in exactly the same hard place as A finds itself at present with A38 customers finalising contracts, who are firmly in the drivers seat.
 
Rj111
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RE: AC's Used 345 Source And Related Impact On A&B

Mon Jun 20, 2005 11:34 pm

Quoting Beechnut (Reply 19):
They'd have a mix of A340-300s of different variants and range, plus 500s and 600s. Then there are the A330s as well.

Hardly an issue. The A340 and A330 have above 90% commonality, they're basically the same plane. The A345/6 less but still a significant amount. A333, A345 and A346 have Trents, A343 and A32S both have CFM56's.
 
AC787
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RE: AC's Used 345 Source And Related Impact On A&B

Tue Jun 21, 2005 12:45 am

Quoting PlaneSmart (Reply 21):

According to many on a.net, B orders are firm contracts, with non-refundable deposits. Only firm orders appear on the B web site. SEC definition of an order is far tougher than that accepted in Europe.

http://www.boeing.com/commercial/7e7/flash.html

I wasn't refrencing their orders page, I was just pointing out that the commitment they really seemed to be showing off was the AC one. Look that the 787 page I linked, its still being shown, "AC chooses 787/777's!". NW committed to the 787 after AC yet its the AC order their focusing on.
 
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lightsaber
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RE: AC's Used 345 Source And Related Impact On A&B

Tue Jun 21, 2005 12:49 am

Quoting PM (Reply 15):
Anyway, used GE 777s are no harder to find than PW and certainly easier to acquire than RR.

Unfortunately, used 777-200A's with Pratt's are easy to find right now. If one considers that AC is looking for Trans-Pacific capable airframes, than yes, there just aren't any sitting idle that I'm aware of.

Lightsaber
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beechnut
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RE: AC's Used 345 Source And Related Impact On A&B

Tue Jun 21, 2005 1:50 am

Quoting RJ111 (Reply 22):
Hardly an issue. The A340 and A330 have above 90% commonality, they're basically the same plane. The A345/6 less but still a significant amount. A333, A345 and A346 have Trents, A343 and A32S both have CFM56's.

Actually it is a big issue. Currently AC has 4 engine types in the widebody fleet (GE and PW in the 767 fleet, RR Trent, and CFM 56 in the 330/340s, and 5 types if you consider the older PWs in the 767-200 fleet as a separate type) and 1 in the narrowbody fleet (not including the RJs/ERJs), for a total of 5 engine types. In addition there are 3 basic airframe types (A32x, A330/A340 and 767).

The Boeing order would have resulted in the same number of airframe types (A32x, 777, 787), but only 2 engine types for the widebody fleet and 1 for the narrowbody fleet, for a total of 3 types. Major savings. Plus many of the 767s are getting quite elderly now, some of the -200s rank among the oldest 767s, from the early 80s.
 
gigneil
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RE: AC's Used 345 Source And Related Impact On A&B

Tue Jun 21, 2005 1:59 am

Quoting Lightsaber (Reply 24):
If one considers that AC is looking for Trans-Pacific capable airframes, than yes, there just aren't any sitting idle that I'm aware of.

It depends on your view of Trans-Pacific. AC could fly 772As to NRT and ICN from YVR no problem.

N
 
Rj111
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RE: AC's Used 345 Source And Related Impact On A&B

Tue Jun 21, 2005 2:16 am

Beechnut, i agree the 767 half of the equation is an issue. I only quoted a little bit of your argument though, about the Airbus's.

An A340/A330/A320/787 mix could also result in 3 families with a 2 engine mix. And of course avoid the hassle of changing the entire widebody fleet. Which is evidently an issue, for now.
 
whitehatter
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RE: AC's Used 345 Source And Related Impact On A&B

Tue Jun 21, 2005 4:10 am

Wasn't Air France looking to lease out a few of its ER spec 772 frames? There was some talk of them having some surplus capacity as they switch to the 773ER on busy routes.

AF could do Air Canada an ACMI type deal as there isn't any conflict of interest regarding route duplication for a few years until AC gets its pilot agreement and fleet planning reorganised. Leasing in on ACMI doesn't cause nearly as many headaches as trying to recruit around the block of pilot scope agreements.

I still get the feeling AC rushed this through and pushed their staff too hard, hence they baulked at the deal despite union agreement. Maybe it just needs time, talk and then this order placing later.
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USAF336TFS
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RE: AC's Used 345 Source And Related Impact On A&B

Tue Jun 21, 2005 4:33 am

Quoting AC787 (Reply 8):
Hopefully its Air Canada Smile

I agree with the above statements. I believe that this deal will revisited. Sounds like AC is trying to pressure the Pilots Union for more concessions. In a worst case for Boeing, those aircraft will be quickly scooped up by other airlines.
In the end, I think when AC rejuvenates this order it may not be a sweet for them as the first time, but in the end, it'll go through.

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birdbrainz
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RE: AC's Used 345 Source And Related Impact On A&B

Tue Jun 21, 2005 6:05 am

Quoting Turbojet (Thread starter):
Well.. It looks like we won't see another AC "surprised" re-order drama any time soon. If AC were to reorder the cancelled deal, it is too obvious the management is playing some sort of game.

Nobody will care. It will be all win-win, hugs and kisses if they ink the deal. Besides, the deal was contingent on the pilots all along. The story will go: "The pilots first said no, then we resolved our differences and reached a deal. All is well."

2nd observation: Mixed fleets with mixed engines is a major pain. It makes spares and logistics a nightmare.
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Sjoerd
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RE: AC's Used 345 Source And Related Impact On A&B

Tue Jun 21, 2005 6:47 am

The press releases clearly say what AC will do now : introduce 3 aircraft of a type already in their fleet next year and at some point they will start looking for a B763 replacement for 2010. The B787 is still a possibility, but the B777 is out.

Sjoerd
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krisyyz
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RE: AC's Used 345 Source And Related Impact On A&B

Tue Jun 21, 2005 7:51 am

Quoting Sjoerd (Reply 31):
The B787 is still a possibility, but the B777 is out.

The 777 was never meant as a 767 replacement just as a replacement of the Airbus wide bodies. AC also stated that it will not buy anymore A340's due fact that they have 4 engines. So what other choice is there the wide body fleet? None, so AC is stuck with the Airbuses for a few more years at least .

AC really wants to get ride of the A340's in it fleet, every time Milton speaks about the fleet he mentions his dissatisfaction of the A340's.

Krisyyz

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