ATA767
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ATA To Get DC-10's-RUMOR

Thu Apr 06, 2006 8:44 am

ATA to get DC-10's (maybe ex NW 30's). I am not sure that is so smart but I guess those 763's are not easy to come by.

[Edited 2006-04-06 01:45:51]
 
FlagshipAZ
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RE: ATA To Get DC-10's-RUMOR

Thu Apr 06, 2006 8:53 am

Just a rumor, that's all. if anything ATA wants a 5th Dash 500 Tristar to replace its sole Dash 100 Tristar. No DC-10s again, and the 763...like you said, hard to come by. Regards.
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flydreamliner
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RE: ATA To Get DC-10's-RUMOR

Thu Apr 06, 2006 9:02 am

Give the 763's another 5 years, I think the market will start to see them get more available, as AC and Qantas start replacing their fleets with 787 and USAir replaces theirs with A350s.

I don't see why they'd buy a DC-10. One model of obsolete tri-jet is enough, don't you think. They've got tristar, I'm not sure why they'd want DC-10 too....
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474218
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RE: ATA To Get DC-10's-RUMOR

Thu Apr 06, 2006 9:03 am

Quoting FlagshipAZ (Reply 1):
Just a rumor, that's all. if anything ATA wants a 5th Dash 500 Tristar to replace its sole Dash 100 Tristar.

TZ already has a 5th L-1011-500, N160AT s/n 1217, an ex-RJ is in storage (I think in Roswell).
 
md90fan
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RE: ATA To Get DC-10's-RUMOR

Thu Apr 06, 2006 9:28 am

Quoting FlyDreamliner (Reply 2):
USAir replaces theirs with A350s.

Not to be a smart ass but out of the 767 family US only operates 762's (and A333)  Smile
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optionscle
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RE: ATA To Get DC-10's-RUMOR

Thu Apr 06, 2006 9:53 am

I'd like to hear an opinion from someone who knows more on this topic than I do, but I don't see this as a very good move. First of all, would ATA be buying or leasing these aircraft? I just can't grasp the financial justification for paying lease rates for maintinence intensive, inefficient aircraft. This is especially true in the climate of today's oil market. Anyone care to comment?
 
Vortex
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RE: ATA To Get DC-10's-RUMOR

Thu Apr 06, 2006 10:34 am

Denison confirmed they were in talks with NW regarding 10 DC-10s. They would replace the L-10s and add some more birds. All for the military.
 
ltbewr
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RE: ATA To Get DC-10's-RUMOR

Thu Apr 06, 2006 11:32 am

I love it that ATA seems to be the home of the 3-holers. I am quite sure those NW DC-10 have a lot of hours (and cycles), but were well mainatined and still would have a lot of life. Would they be retained as pax only or split with some going to freight conversions? Also, would there be a few other interested in those NW DC-10's as freighters (FedEx, UPS, others?)
 
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fxramper
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RE: ATA To Get DC-10's-RUMOR

Thu Apr 06, 2006 11:37 am

Quoting LTBEWR (Reply 7):
would there be a few other interested in those NW DC-10's as freighters (FedEx, UPS, others?)

Heck yeah, were are gonna fight for them!  box 
 
B757capt
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RE: ATA To Get DC-10's-RUMOR

Thu Apr 06, 2006 12:39 pm

What would this do to the training for the whole airline, ground crews, pilots, the SOP.. This could be a costly move and last time I checked ATA didn't have a lot of money.
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MajorNelson
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RE: ATA To Get DC-10's-RUMOR

Thu Apr 06, 2006 12:43 pm

Interesting decision. Maybe the DC10s are for that new blockbuster LGA-HOU route since it's already doing so well.

Someone in another related thread said that all the idiotic decision makers had left the airline. Hmmmm...

Maybe someone should tell the new brains of ATA that they already had DC10s before. And one burned up at ORD - bad omen, maybe.
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474218
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RE: ATA To Get DC-10's-RUMOR

Thu Apr 06, 2006 12:58 pm

Quoting MajorNelson (Reply 10):
Maybe someone should tell the new brains of ATA that they already had DC10s before. And one burned up at ORD - bad omen, maybe.

They only had one (1) DC-10 and it burned. With the insurance settlement they bought their first L-1011. I can't see them getting rid of the L-1011's after they just ran them through C-Checks at Gamco, but airlines are not known for doing things that make sense.
 
WesternA318
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RE: ATA To Get DC-10's-RUMOR

Thu Apr 06, 2006 2:11 pm

Quoting Vortex (Reply 6):
Denison confirmed they were in talks with NW regarding 10 DC-10s.

10 of them? *whistle* Well, the good thing is, like WjCandee said, lower costs due to more available spares, MX lines, and whatnot out there.

Quoting MajorNelson (Reply 10):
And one burned up at ORD - bad omen, maybe.

LOL, that was their only DC-10, and it was becasue a cleaner left something on in the cabin?
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Max Q
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RE: ATA To Get DC-10's-RUMOR

Thu Apr 06, 2006 2:20 pm

Good luck to ATA with a practical decision.
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NYCTZ
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RE: ATA To Get DC-10's-RUMOR

Thu Apr 06, 2006 4:41 pm

Actually I believe we had 2 DC-10s. A DC-10-10, and a DC-10-40. From what I've been told the fire started in the cargo pit.
 
blsbls99
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RE: ATA To Get DC-10's-RUMOR

Thu Apr 06, 2006 5:22 pm

If ATA goes through with the DC-10 deal, could they convert them into MD-10s? Is that conversion still available? And if so, would it be favorable financially?
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jetjack74
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RE: ATA To Get DC-10's-RUMOR

Thu Apr 06, 2006 6:40 pm

Quoting NYCTZ (Reply 16):
Actually I believe we had 2 DC-10s. A DC-10-10, and a DC-10-40. From what I've been told the fire started in the cargo pit

The DC10-40 was written off at ORD in 1982 when it caught fire during an overnight maintnence check
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RE: ATA To Get DC-10's-RUMOR

Thu Apr 06, 2006 10:49 pm


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474218
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RE: ATA To Get DC-10's-RUMOR

Thu Apr 06, 2006 11:24 pm

Quoting NYCTZ (Reply 16):
From what I've been told the fire started in the cargo pit.

Oxygen generator went off in a spare seat in the cargo compartment.
 
warreng24
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RE: ATA To Get DC-10's-RUMOR

Fri Apr 07, 2006 5:34 am

What about all those L1011-250's that DL has sitting around?

I know they lack the range of the Dash 500's, but wouldn't it be nicer to have the fleet commonality?

Plus aren't some parts interchangable? I think both the Dash 500 and Dash 250 use the same RB211's?
 
socal
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RE: ATA To Get DC-10's-RUMOR

Fri Apr 07, 2006 5:37 am

How was this rumor started?
It would be good to see DC-10's in ATA livery
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dutchjet
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RE: ATA To Get DC-10's-RUMOR

Fri Apr 07, 2006 7:29 am

I just dont see ATA acquiring DC10s at this point in time - replacingone 30 year old type with another 30 year old type? I just does not make sense, especially when considering the 3 person cockpit and the very high price of fuel. The 763ER is the right aircraft for the ATA mission....I realize that good examples of the type are hard to come by on the second hand market at the moment, but there are possibilities in the coming years. So much depends on what happens at DL, GulfAir is looking at renewing its 763 fleet, etc etc.

Early on, ATA said what they would really prefer is RR powered 763ERs....meaning aircraft from BA or the BA birds now with Qantas (there is also a Chinese carrier with a few RR 763ERs)......with QF having signed up the 787, in the medium term future, their 763 fleet should become available, but is the timing something that ATA could live with?

I am surprised that ATA does not order new builds in connection with a leasing company.....Boeing is still happily accepting orders for the 767 (LAN ordered a good number last week) and the ATA charter/military business is a good one, regardless of the future of ATA's scheduled system, the charter/military biz will remain and produce good money to pay for leases for new aircraft.
 
wjcandee
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RE: ATA To Get DC-10's-RUMOR

Fri Apr 07, 2006 12:04 pm

Quoting Dutchjet (Reply 27):
I am surprised that ATA does not order new builds

This wouldn't be a reasonable thing to do given that aircraft dedicated to charter service generally have a substantially-lower utilization rate than do aircraft in scheduled service, making the capital cost issue very important. Those used 767 aircraft that they decided NOT to take would have cost them LESS in capital cost than new build aircraft that you mention.
 
ChiGB1973
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RE: ATA To Get DC-10's-RUMOR

Fri Apr 07, 2006 12:38 pm

Some Thoughts about Military Flying and DC-10's
From Doug Frankwich, MEC Safety & Health Chair

From the Editor: ATA has been looking at the possibility of leasing several DC-10's. Nothing has of yet been finalized.

Here are some thoughts from airliner.net chat page that make good points.

(1) As said, the 767-300 is the aircraft that ATA probably should want. It gets reimbursed at a higher per-mile rate than a DC10 or MD11. It has the right number of seats and good range. It's the same type rating as the 757-200 and 757-300, so the pilots just need differences training. It's reliable. Etc. It's also unavailable to ATA at a decent price, although NAO just picked up one more and has another coming later this year.

(2) The 767's will be coming available as the 787's come on line at certain carriers. However, if fuel prices stay up, they'll also be in demand as freighters. A 767-200 burns slightly less fuel than a 727, has one fewer engine and one fewer cockpit member than a 727, has an enormous amount more capacity, and thus makes a very desirable freighter if it can be had at an appropriate price. The freighter conversion demand will keep used 767's in demand for a long time.

(3) Omni presently does a very nice military business with DC10's. Reliability is likely an issue for them, but they get it done. So anybody who says that it's an inappropriate aircraft for military (which is what ATA wants to use it for) is really off base. Is it optimal? No. But it's also an airframe that is widely available, widely-known, has lots of parts available for it and places around the world that know how to maintain it. Is it superior in all these regards to the L1011? Heck, yes. (Is it a superior aircraft to the L1011? No. But, like the Betamax, the superior design can nevertheless, through atrophy, be simply impractical.)

(4) If ATA can run a decent military charter business using non-optimal 757-300's and challenging-to-keep-flying L1011's, the DC10's will be an improvement.

(5) The comment about the military paying for fuel isn't quite right. It's not an ACMI lease, where the client actually does pay for the fuel directly. In fact, if you run a more fuel-efficient aircraft than the next guy, you save money under the military system. You get paid a uniform rate based upon the class of aircraft. MD11, DC10, L1011 are all reimbursed at the same per-seat-mile rate, although they each are calculated to have a different fixed number of seats. The 767-300 and 767-200 are in the same class of aircraft for the military, and are reimbursed at a higher per-seat-mile rate than the DC10 class. What the military does give you a hedge against is an increase in the price of fuel. They recalculate on a regular basis what the average price per gallon is, and redo their per-seat-mile rate based upon that change in fuel price. So if fuel goes up, you will get a higher per-seat-mile payment, but it's the same whether you are using the more-fuel-efficient or less-fuel-efficient aircraft. So, your basic cost inputs are capital (lease) cost, crew cost, maintenance cost, and fuel cost. A 767 will have lower crew, maint and fuel cost, but a higher capital cost. A DC10 will have higher crew (one more), maint (another engine) and fuel cost, but a lower capital cost. Bottom line is that these aircraft have no significant demand outside of certain charter and some limited freight applications after NW removes them from service, so their capital cost may be way low, and that may help offset the higher other costs. Also, if you're looking at keeping them for 5 years or so, the low capital cost makes them desirable in that they don't cost you much money when they're sitting around waiting for business. The bad part, however, is that they have very limited demand in charter applications outside of military, so when the military doesn't need them they will likely be mostly sitting around.

So there you have it. Those are the factors that ATA faced, and rather than pass up the opportunity for additional military business, rather than face having to D-check two more L1011s in a year or so, rather than rely on a fleet of only 4 widebodies, they now will have a pool from which they can draw to reestablish themselves as a formidable military carrier. If they decide to go for it
 
wjcandee
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RE: ATA To Get DC-10's-RUMOR

Fri Apr 07, 2006 1:05 pm

Quoting ChiGB1973 (Reply 33):
Here are some thoughts from airliner.net chat page that make good points.

Dang! How flattered am I?

Humbly,

Bill
 
wjcandee
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RE: ATA To Get DC-10's-RUMOR

Fri Apr 07, 2006 1:54 pm

Hey, for what it's worth, Omni's calculated cost per seat mile, flying the DC10, is the lowest of all carriers and types used in the large-aircraft cost calculation by the AMC. You can look at the cost per aircraft mile and how it's calculated at: http://fs1.fbo.gov/EPSData/USAF/Syno...R-0001/RevisedFY06FinalWebRate.pdf


CARRIER TYPE Cents per seat mile
American Airlines B-777-200ER 12.849
American Trans Air L-1011 12.531
Omni Air Int'l DC-10-30/40 9.812
United Airlines B-747-400 12.235
World Airways MD-11 10.145

The breakdown of the components of these costs is at that link: ATA L1011 is on p.25, the Omni DC10 is on p.26 and the World MD11 is on p. 28. What jumps out is that Omni's fuel cost and maintenance on the DC10 is a little higher than ATA's on the L1011, and their crew cost is a smidge lower: ATA ends up being about a buck per revenue aircraft mile lower than Omni on those factors. ATA's insurance cost is crazy-low, by a factor of ten, compared to anyone else. Omni's capital cost for the DC10 is about 2 bucks per revenue aircraft mile and ATA's is about 3 for the L1011. World's is about 4 for the MD11. What makes the biggest difference in the rate, however, is Omni's passenger service cost, which is a THIRD of ATA and World, like $2.75 versus $7. This category includes flight attendant wages and food, among other things. Apparently Omni's costs originally didn't include upgraded food, so that may be part of it, but I suspect that f/a salary accounts for a big part of the difference. Take that factor out and Omni's cost per plane-mile would be about the same for its DC10 as ATA for its L1011, but with a paid cabin load 30 passengers (10 percent) higher than ATA's L1011. So...bottom line is the numbers are interesting, but the switch to the DC10 might provide about a ten percent revenue boost per flight with somewhat-comparable costs, depending upon ATA's implementation of the type. On the capital cost side, the lower capital cost for Omni's DC10s as compared to ATA's L1011s yields about a 3-4 percent reduction in total cost per aircraft mile.

Also, to compare the 767-300, DL's costs for that aircraft are on p. 30 and NOA's costs are on p. 31. Look at the difference in the cost for "fuel, oil and aircraft supplies" among the different aircraft: ATA/L1011=$8.46 per revenue/paid aircraft mile; Omni DC10=$8.73; World/MD11=$7.94; Delta/763=$5.46; NorthAmerican/763=$5.45. That $3 per mile saved on fuel can defray some capital cost, but, of course, it's a variable cost that you don't incur when the aircraft isn't flying, as opposed to a fixed cost that you do. The MD11 has about a ten percent lower fuel cost, but a twenty-percent-higher paid cabin load -- so you get twenty percent more revenue than an L1011 (ten percent more than a DC10), yet you actually have a lower fuel cost. The 763 gets reimbursed for 20 percent fewer seats than the L1011 (240 rather than 300), but at a sixteen-percent higher per-seat-mile rate. $29.67 per aircraft-mile (plus other fees) for 767 versus $32.18 per aircraft-mile for L1011. This against an estimated cost of $30.41 per aircraft mile for ATA's L1011 (all inclusive) or $23.71 per aircraft-mile (all-inclusive) for NOA's 767. So...at least using the AMC's numbers you can see a substantially-higher profit per paid aircraft-mile for the 763 (like $6 for the NAA 763 versus $1.70 for the ATA L1011).

Hope that's interesting.

[Edited 2006-04-07 07:22:22]
 
747400F
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RE: ATA To Get DC-10's-RUMOR

Fri Apr 07, 2006 4:01 pm

If DC10's make good economic sense to fly on military contracts, and NW has some DC10's spare, why does NW not enter the military chartermarket with these birds? They will not have crewconvertion cost, they allready have all the nessasary spares even at a convienient stopoverplace for flight to the Middle East (AMS)
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wjcandee
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RE: ATA To Get DC-10's-RUMOR

Fri Apr 07, 2006 8:50 pm

Quoting 747400F (Reply 26):
If DC10's make good economic sense to fly on military contracts, and NW has some DC10's spare, why does NW not enter the military chartermarket with these birds? They will not have crewconvertion cost, they allready have all the nessasary spares even at a convienient stopoverplace for flight to the Middle East (AMS)

The military reimburses at a fixed rate per seat-mile, in like 3 categories of long-range aircraft type (large/medium/small). This rate is calculated by using the old Civil Aeronautics Board cost determination methodology across the major and minor airlines and applying a slight markup. The high-cost carriers wouldn't make much money from flying at that rate. The low-cost charter carriers can make very good money flying at that rate. (As an aside, NW actually makes money from participating in the Civil Reserve Air Fleet program under which World, Omni, North American and ATA fly long-range international missions. By promising to make aircraft available in an emergency, committing specific airframes by tail number if called up (the list of which is available at http://www.dot.gov/ost/oet/craf/index.html -- look at the 2nd spreadsheet for any month), each participating airline gets the right to a proportional percentage of the overall long-range military pie. They then transfer these rights to a "team" of carriers onto which they sign for a year. ATA, World, Omni or North American does all the passenger flying for that team, makes money from it because their actual costs are much lower than the military reimbursement rate, and then those carriers pay commissions back to the team for the right to do the flying, which is then allocated among the team members. This way, an airline like NW cashes in its *rights* to do the military flying that it is entitled to do because of its participation in the program, without doing the actual flying, and companies like World make money from doing the flying. Everyone wins, especially the military. "Not really," you might say. "That's a very inefficient program." Wrong. The program allows the military to avail itself of an infinitely-adjustable amount of passenger lift on very short notice, without having to maintain a fleet of aircraft. It has literally hundreds of commercial airliners at its beck and call if needed, for which it pays ZERO capital or crew cost when not in use, and which it will almost never need to use. These guys can't even order a friggin' desperately-needed tanker, while the Italian Air Force has bought and is flying the 767 tanker. Pathetic. Imagine if they had to buy and staff a fleet of organic passenger lift airliners. It would take twenty years and be ten times as expensive as it should be. This way, everyone wins. Indeed, when things are a little stretched at the charter carriers, some of the commercial carriers like NW step up and do a few missions so everything can run smoothly for the military. They may make a little money from doing this, because they use aircraft and/or crews that aren't absolutely needed on routes, and so make a little money around the margins. It's the kind of program that politicians would love to meddle with and screw up, by claiming it's a "waste" or isn't "fair", but it actually works very well.
 
747400F
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RE: ATA To Get DC-10's-RUMOR

Fri Apr 07, 2006 10:58 pm

Thanks for good explanation!
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MX757
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RE: ATA To Get DC-10's-RUMOR

Fri Apr 07, 2006 11:28 pm

Quoting Wjcandee (Reply 22):
This wouldn't be a reasonable thing to do given that aircraft dedicated to charter service generally have a substantially-lower utilization rate than do aircraft in scheduled service, making the capital cost issue very important. Those used 767 aircraft that they decided NOT to take would have cost them LESS in capital cost than new build aircraft that you mention.

Not bad for an "arm chair CEO". Wink

You hit the nail right on the head.

Note: I would quote you some more but that would take up alot of bandwidth!
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nitrohelper
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RE: ATA To Get DC-10's-RUMOR

Sat Apr 08, 2006 12:18 am

Quoting Wjcandee (Reply 27):
Wjcandee

thank you for an excellent reply  thumbsup 
 
malaysia
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RE: ATA To Get DC-10's-RUMOR

Sat Apr 08, 2006 12:25 am

If they were on sale for 1$ to ATA, they might consider them.
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Clipper002
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RE: ATA To Get DC-10's-RUMOR

Sat Apr 08, 2006 8:48 am

Bill,
As usual, a great thread on AMC contracts. One thing I think you missed might be entitlement. Once ATA has used all of its' entitlement, they must wait until each and every other team exhausts theirs before they can utilize the additional equipment. This can be a very expensive item, having planes and crews sitting around waiting for the business to come in. As for NW, they absoultley HATE flying for AMC and will do anything in their power to avoid it. This has been the case for quite a few years now.

Thanks for your informative posts and please stay in contact.

Rgds,
Ed
Ed
 
wjcandee
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RE: ATA To Get DC-10's-RUMOR

Sat Apr 08, 2006 2:47 pm

Quoting Clipper002 (Reply 32):
One thing I think you missed might be entitlement.

Thanks, Ed. Good point, of course. ATA couldn't just buy 10 aircraft and hope to use them. Here was what I was thinking: (1) as their business plan seems to call for expanding their military business, they might try to rework their team a bit to expand entitlements, perhaps by paying a higher commission if it got them more business, maybe bring UPS back into the fold or whatever. I had assumed that they would have figured out a way to increase entitlement if they were going to bring on a substantial number of additional jets; (2) Replacement versus expansion. ATA was running 5 L1011s last year and parked one recently, so the first 5 DC10s could be just straight replacements, assuming that they were willing to park the 2 L1011s that they just D-checked. At a minimum, they'll need 3 new jets by 2Q07 to replace the L1011s that need to be D-checked at that time plus the one they parked because D-checking it would have been futile as they were basically out of the older -22B engines with time on them and there was noplace to get overhauls done on those engines. Moreover, although they get away with running those 753s on military charter, they aren't optimal, usually bulking out with gear or weighting out at the stage lengths that they would like to fly, at the higher per-person weight that the military uses. Those 4 753s might (and I admit it's just a "might"), if their ATA's WN codeshare continues to increase their Hawaii business, for example, find a more profitable niche on their highest-volume sked routes or in commercial charter applications, or they might end up being most profitably re-leased to NW or CO, who would love to have some more 753s, particularly given the customer acceptance that those airlines have experienced with those aircraft, and the fact that they sip fuel like it was a tiny cup of expresso. (I flew a CO 753 two weeks ago, and was pleasantly surprised by how comfortable it was, how much power it had [was almost as much of a rocket as a 752], and how quickly it loaded and unloaded, which was what Condor had always said about it but which I wouldn't have fully believed if I hadn't experienced it.)

Beyond that, it occurred to me that ATA may not be flying all of its entitlements. As I understand it, AMC makes an effort on a monthly basis to balance missions against entitlements, but if someone can't fly their full allocation of entitlements in a given month, the entitlement doesn't carry over; the counter is reset for the next month. Given the substantial reduction in the ATA fleet at various points, and the fact that some of the larger network carriers were from time to time helping out on military charters, it seemed to me like maybe there was room for one, two or even more additional aircraft over at ATA even at their present entitlement level. So...if you figure that they're getting maybe 7-9 aircraft, five could be straight replacements of L1011s, a couple might be used to free up two 753s, and two could be for new business. That would be 9. If they left the 753s or two L1011s in the loop, but expanded the fleet by two airframes, that would total seven. Just a thought.

You are of course right that NW is a bad example to use as they don't do much of that business -- UA (744) or AA (777) are far more regularly seen. However, the poster with the question had referenced NW, and I therefore used them in my example. But again you are of course absolutely right, as usual.

All the best (and thanks),

Bill
 
bennett123
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RE: ATA To Get DC-10's-RUMOR

Sat Apr 08, 2006 7:03 pm

How feasible would it be to uprate 22B engines to 524's or simply replace them with 524's.
 
wjcandee
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RE: ATA To Get DC-10's-RUMOR

Sun Apr 09, 2006 1:23 am

Quoting Bennett123 (Reply 34):
How feasible would it be to uprate 22B engines to 524's or simply replace them with 524's.

Apparently, among other things, this would require manufacturer cooperation and/or support, which it no longer provides. Assuming that any manufacturer will do anything for the right amoung of money, the amount of money would be too much.
 
lijnden
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RE: ATA To Get DC-10's-RUMOR

Sun Apr 09, 2006 3:07 am

I love the DC-10, but with most passenger airframes that are still flying having reached > 100000 hours / > 30000 cycles and with the last DC-10 build about 20 years ago, one must really wonder if buying DC-10's is the solution!

I also wonder about the figures mentioned in reply 25. It is clear that the only advantage of these old birds are the lesser amounts in write-offs/depreciation costs against the newer planes. Northwest and also Continental did this trick 10-15 years ago when fuel was still cheap and DC-10's were dumped everywhere in favour of T7's and MD-11's.

Maybe it is not the DC-10 but the MD-11 they want to buy! The MD-11 is basically an advanced DC-10 for many people. And they want 10 of them...
Maybe the KLM MD-11's are leaving sooner (KLM just ordered extra T7's and A330's!) than we think or maybe some ex Thai and Varig planes.
Be kind to animals! Next trip: ORF-ORD-NRT-IAH-ORF
 
wjcandee
Posts: 5123
Joined: Mon Jun 05, 2000 12:50 am

RE: ATA To Get DC-10's-RUMOR

Sun Apr 09, 2006 4:32 am

Quoting Lijnden (Reply 36):
Maybe it is not the DC-10 but the MD-11 they want to buy

The MD11 is in high demand for freighter conversions. As a practical matter, a sufficient fleet of them won't be available to ATA at an appropriate price. As you can see from the costs I cited, it's about $2 per mile more in cap cost than (i.e. double) the DC10, to those airlines that are able to have them (like World). Its extra capacity is not (as) needed anymore for military flights, which used to favor larger a/c (747, MD11, etc.). Its fuel cost is definitely lower than the DC10, for more capacity, but, again, you get into that realm where depending upon usage it may be worth spending more on fuel when the thing is being used rather than taking the risk that you'll have to pay more in cap cost when it's not. Different way of grouping troops for movement on many missions means no need for the extra capacity. The MD11 has even less utility for commercial passenger charter. Bottom line is that any decent used MD11 is going to go to UPS or FedEx for freighter conversion, unless someone is so desperate for it that they outbid those deep-pocketed carriers. World is even converting one of its passenger birds into a freighter for it to lease out to other carriers. Shows you where the money is with the MD11: carrying boxes.
 
wjcandee
Posts: 5123
Joined: Mon Jun 05, 2000 12:50 am

RE: ATA To Get DC-10's-RUMOR

Sun Apr 09, 2006 4:44 am

Quoting Lijnden (Reply 36):
I also wonder about the figures mentioned in reply 25.

Hey, man, I gave you the link to the Department of Defense, which audited and adjusted the figures provided by the airlines before publishing them. Nevertheless, you're welcome to "wonder" away. It's a free country.

Quoting Lijnden (Reply 36):
It is clear that the only advantage of these old birds are the lesser amounts in write-offs/depreciation costs against the newer planes.

Uhhh...it isn't so much the "writeoffs" as it is the actual cash expense that gets paid either to the lender or the lessor, depending upon how the aircraft is acquired (hence the inverse relationship between rental cost and depreciation on the financial sheets). So...the advantage of "these older birds" is that you have a lower monthly payment on them -- a payment that you have to make regardless of whether the thing is flying or sitting.

As I mentioned, the economics of charter operation are such that the aircraft doesn't get flown for as many hours per day as it would in airline operation. That has to be balanced against the ownership cost of the airframe. Expenses like fuel, crew and maintenance are largely dependent upon how much you fly the thing, so if it isn't flying much you aren't paying for fuel, crew or maintenance, but you're still making that monthly payment on the thing. Depending upon how much the thing will be flown on average, it can actually be cheaper per actual hour of operation to fly a less-fuel-efficient, 3-person-crew, 3-engine aircraft than a brand-spankin-new 2-engine, 2-crew fuel sipper. Or it can be at least comparable, with lower risk.
 
Clipper002
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RE: ATA To Get DC-10's-RUMOR

Sun Apr 09, 2006 5:02 am

Bill,
Quite a scenario. Seems a bit ambitious to me, but in the wacky world of aviation, "one never knows, now do one?" It'll be interesting to see how this pans out in the future. Not to upset the apple cart, BUT and that's a BIG BUT, if things keep stumbling along in Iraq like they currently are, I for one don't see this huge military buildup staying in place much beyond mid '07. If this scenario does come true then World and anyone else (ATA) who is counting heavily on AMC for their revenue will be in a world (no pun intended) of hurt. Now bear in mind this is coming from someone who exercised his first stock options at $1.10 per share.

I agree whole heartily agree with you on the MD-11 issue. As a pax aircraft they have become a dinosaur, while they still have a great market carrying freight. BUT, again, there's that word, the Asian cargo market has always been very cyclical in the past. Right now we are in the peak of the peaks. If there is a sudden drop off as has been demonstrated in the past, then the MD-11 will be virtually useless all around. Having said that, I know of nothing that would foresee an end to the huge exports out of the Asian theatre to the rest of the world.

Thoroughly enjoy your posts and thanks for the plug on CO. My oldest boy flies 73's for them. Quite a come down from the Polar 74-400's he was on for the past 3 years.

Rgds,
Ed
Ed
 
andrewuber
Posts: 2142
Joined: Tue Jul 22, 2003 10:45 am

RE: ATA To Get DC-10's-RUMOR

Sun Apr 09, 2006 5:13 am

Quoting FlyDreamliner (Reply 2):
Give the 763's another 5 years,

Not if DL goes tits up next week. There will be quite an influx of aircraft on the market. I know for a fact a few carriers are hovering over DL like vultures, just waiting to pick it apart. It would be a feast for all.
I'd rather shoot BAD_MOTIVE
 
Clipper002
Posts: 659
Joined: Wed Aug 11, 2004 4:24 am

RE: ATA To Get DC-10's-RUMOR

Sun Apr 09, 2006 9:21 am

Andrew,
Sorry, but that's not how it works when an airline in BK goes TU. Every possible transaction has to be approved by the courts. Each a/c has to be retrofitted with the engines that it originally was delivered with. All of this takes quite a bit of time, especialy when most of your mechanics are furloughed. It's not just a simple process of reassigning the assets to someone else. Now that's assuming that DL does go TU which I seriously doubt in the first place.

Rgds,
Ed
Ed
 
wjcandee
Posts: 5123
Joined: Mon Jun 05, 2000 12:50 am

RE: ATA To Get DC-10's-RUMOR

Sun Apr 09, 2006 1:22 pm

Quoting Clipper002 (Reply 39):
Thoroughly enjoy your posts and thanks for the plug on CO. My oldest boy flies 73's for them. Quite a come down from the Polar 74-400's he was on for the past 3 years.

Thanks for your nice words, too. I know that your son will have a wonderful career at CO. What you said about the Polar job certainly made it sound like he had a lot of fun and went to a lot of intriguing international destinations. And "boxes don't bitch", which is always nice. But being hired by an airline like CO has to be something to be very proud of, so congratulations to him. I take it that GroundStop is still at that Florida-based carrier that I like. Hope the retirement still finds you well, and thanks again!

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