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Joined: Thu May 25, 2006 10:19 am

Decision Factors On Airline Slection Of Aircraft

Tue Jun 06, 2006 5:21 am

I originally posted this on the Finnair/A350 Decision Thread, but I guess it should probably be a separate thread. (apologies)

Quoting PM (Reply 4):
A comment like this makes me wonder just how big the gap between the A350 and 787 really is. It's obviously a serious enough issue for most airlines to have preferred the Boeing, for ILFC et al to have criticised the A350 publicly, and for Airbus to admit they got it wrong and must think again. And yet, are we given to understand that the management and Board of Finnair (and of TAM, TAP and others) knowingly bought a hugely inferior product? I suspect there's stuff going on here we still know nothing about.

It is amazing to me that many here at seem to think that best or superior product capabilities are the ONLY or the DOMINANT factor in airlines' aircraft selection.

Does any one here always buys the best house, car or HDTV in the market? Does any business always buys the best computer or truck in the market? Of course not. PRICE is a HUGE factor. Delivery time and support terms are critical factors. PAST EXPERIENCE and PERSONAL RELATIONSHIPS and PREFERENCES of the decision makers are OFTEN dominant factors.

The same in this industry. Some airliners will never buy Airbus other will never buy boeing. Some have strong afinity or preferences for one or the other, and will only buy from the other OEM in very specific cases. Other airlines have a policy to split orders and never to be locked in to a single vendor.

For example, it is very possible (or may not be) that by keeping the "same"A330 fuselage, Airbus was able to offer the original A350 to US and Finnair at a price that would offset the 787 better fuel efficiencies over the useful life of the product.

I think what US and Finnair are saying is "We got a great deal with the original A350, and if Airbus wants to make it bigger, better and give it to us at the original price, and maybe compensate us for the later EIS date, we'd take it." Who wouldn't? Sounds like the deal just got better.

Now the leasing companies may have a completely different set of decision criteria than Finnair and US. For them, residual aircraft value, ability to switch engines, modular interiors, may have more weight and they came to a different conclusion.

So if we are going to second guess airlines selection of aircraft, lets include price, past history, etc in addition to aircraft design/superiority to the discussion.

Which would you rather have a Mercedes SLK 350 for US$40K or a Mercedes SL550 for US$100K? They are both hard-top two seat convertible from the same manufacturer. Still some customers prefer one, some the other. Some time the decision comes down to which one has the best incentive and lease rate, sometimes it comes down to insurance price, sometimes to which one you can afford.

Which would you rather buy a Cessna 172SP for US$140K or a Cirrus SR20 for US$180K? They are both 4-palce, fixed gear single engine aircraft. Some customers prefer one, some the other?

Why should it be different with large aircraft. There is a LOT in play in these decisions. Technical specs is just ONE factor.


[Edited 2006-06-05 22:23:52]
Killer Fleet: E190, 737-900ER, 777-300ER

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