aminobwana
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Is There A Market For Used A330/B777 By 2017-19?

Tue Jul 10, 2007 8:31 pm

The Thread title is a compressed form (due to the max. lenght available) of the question:
"If an airline orders today a new A330 or B777, for delivery 2010-11 or beyond, would it get a reasonable price if re-sold in 2017-19 after only 7 to 9 years of use ??"

Due to the long delivery times of the B787 and the late appearance of the A350XWB, airlines are ordering A330s and B777s to cover the gap until said B787/A350s become available.

Assuming as facts that:
- Boeing and Airbus will adjust their production so to be able to supply the market needs of B787/A350 latest by 2019
- that the B787/A350s operation costs by 2017 will be at least 20% lower as the correspondent A330/B777
- that there are not B330/B777 available for lease at acceptable prices

it must be expected that airlines X which had bought new A330/B777 to be received 2010-11 will not be able to compete with these planes against other operating with B787/A350 by 2017-19 and therefore will offer them for sale to second level operators, possibly creating a glut and the consequent price collapse, implying a huge capital loss for X after a too short period of use.

The question to be answered is: Does it make sense to buy at this stage such aircrafts or should airlines waiting for B787/A350 continue to operate the aircrafts they own presently, as long as not too old, or purchase at low prices (again not too old) used aircrafts as B744, B777, A330/A340, accepting if applicable in turn somewhat higher operating costs as for new A330/B777, but so avoiding the captioned huge capital loss ??

aminobwana

[Edited 2007-07-10 13:37:12]
 
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SEPilot
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RE: Is There A Market For Used A330/B777 By 2017/18?

Tue Jul 10, 2007 8:44 pm

It is indeed an interesting question, similar to what faced airlines in the 60's with the relatively new DC-6's, DC-7's, and Connies that were suddenly no longer viable. Since it is an industry-wide problem (and less severe than in the 60's, as most passengers will not discriminate so much against the older planes) it will sort itself out. If I were an airline exec I certainly would be nervous about ordering new aluminum planes now for delivery 4 or 5 years from now, as those planes will be the ones hit hardest by the decline in value. The airlines that jumped on the bandwagon first will be the ones in the best shape; but it will probably also go by market. Since the US airlines have so far not ordered many CFRP planes (as far as I know only NW and US have, and not many) I don't think any of them will suffer at the expense of the other domestic carriers, although those competing with foreign airlines, especially in the Pacific might lose out to them. Certainly the price of aluminum airliners is going to tumble as the CFRP planes becomes more widely available.
The problem with making things foolproof is that fools are so doggone ingenious...Dan Keebler
 
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RE: Is There A Market For Used A330/B777 By 2017-19?

Tue Jul 10, 2007 8:49 pm

Quoting SEPilot (Reply 1):
It is indeed an interesting question, similar to what faced airlines in the 60's with the relatively new DC-6's, DC-7's, and Connies that were suddenly no longer viable.

But the difference between jets and props is much greater than the difference between a 777 and a 787.

A more comparable example would be to ask the question of whether or not newish 737-300s held much value as second hand aircraft when the 737NG were introduced. I believe they did.
 
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RE: Is There A Market For Used A330/B777 By 2017-19?

Tue Jul 10, 2007 8:55 pm

I expect that a roaring trade will be done converting these into cargo planes but there will be a large glut of these planes onto the market then yes so prices may be depressed.
 
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RE: Is There A Market For Used A330/B777 By 2017-19?

Tue Jul 10, 2007 8:57 pm

Quoting EI321 (Reply 2):
But the difference between jets and props is much greater than the difference between a 777 and a 787.

You are of course correct; I did say so but not clearly. But I believe it will be greater than the difference between the 737 Classics and the 737NG's; it will fall somewhere between the two. It will not manifest itself immediately; it will only really happen when 787's and A350's start appearing on the used market. What is the comparative value now of a late 737 Classic compared to the equivalent early 737NG now? That would be a better comparison; but the difference between a 787 and an A330 in, say 2020, will be a lot greater.
The problem with making things foolproof is that fools are so doggone ingenious...Dan Keebler
 
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RE: Is There A Market For Used A330/B777 By 2017-19?

Tue Jul 10, 2007 9:53 pm

Quoting Scouseflyer (Reply 3):
I expect that a roaring trade will be done converting these into cargo planes but there will be a large glut of these planes onto the market then yes so prices may be depressed.

I have to second that statement. The market for cargo conversion aircraft will be growing continuously in the future decade. Have a look at the current workhorses of the air cargo companies and their average fleet age. The passenger aircrafts you mentioned in your first post will definately see a "second" life as freight dogs. Let alone the conversion programmes for the smaller single aisle aircraft, e.g. A320/B737 series.
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Stitch
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RE: Is There A Market For Used A330/B777 By 2017-19?

Tue Jul 10, 2007 10:01 pm

Quoting Aminobwana (Thread starter):
"If an airline orders today a new A330 or B777, for delivery 2010-11 or beyond, would it get a reasonable price if re-sold in 2017-19 after only 7 to 9 years of use ??"

Probably, since the 787 and A350 lines will be busy filling orders and airlines that operate the type already and need expansion will certainly be able to use them.

For example, a 777-200ER delivered in 1998 for $130 million has a value of $81 million in 2005 - still worth 62%. In 2010, it will be worth $68 million - still over half. I do not have A330 figures, but I expect it is close. In 2020 it will be worth $36 million and ready for conversion into a freighter.
 
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RE: Is There A Market For Used A330/B777 By 2017-19?

Tue Jul 10, 2007 10:03 pm

Quoting Aminobwana (Thread starter):
The question to be answered is: Does it make sense to buy at this stage such aircrafts or should airlines waiting for B787/A350 continue to operate the aircrafts they own presently, as long as not too old, or purchase at low prices (again not too old) used aircrafts as B744, B777, A330/A340, accepting if applicable in turn somewhat higher operating costs as for new A330/B777, but so avoiding the captioned huge capital loss ??

I think if I were an airline exec I would carefully consider what my needs would be between now and 2015, and try my best to fill them with what I have now and what I could acquire reasonably on the used market, and if I thought I needed any new planes for the interim order them NOW rather than later. The problem is that many carriers are in such poor financial shape that they can't do much except survive.
The problem with making things foolproof is that fools are so doggone ingenious...Dan Keebler
 
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moo
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RE: Is There A Market For Used A330/B777 By 2017-19?

Tue Jul 10, 2007 10:10 pm

If the cost of purchasing a second (or third) hand A330 or B777 and operating it for X number of years is less than the cost of purchasing a brand new replacement (A350 or B787) and operating it for X number of years, then yes, there will always be a market.

There are many airlines out there that cannot afford new aircraft, but happily (and profitably) operate older second hand aircraft for years because it fits into their plans to do so. Not every airline plans to own an aircraft they purchase for its entire lifetime.
 
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RE: Is There A Market For Used A330/B777 By 2017-19?

Tue Jul 10, 2007 10:20 pm

Quoting Moo (Reply 8):
There are many airlines out there that cannot afford new aircraft, but happily (and profitably) operate older second hand aircraft for years because it fits into their plans to do so. Not every airline plans to own an aircraft they purchase for its entire lifetime.

This begs the question. What is at issue is are the values of aircraft bought today going to be depressed excessively by the emergence of CFRP airplanes. I believe that they will be; of course there will always be a market for used planes, but the question is at what price? If the new generation of airliners lowers operating costs by 20%, which I believe they will, it will have a significant effect on fares, which will lower what everyone can charge. This will make old generation aircraft less desirable, and hence less valuable. As I said earlier, the full effect won't start being felt until the new generation planes start hitting the second hand market. Then the older planes values will fall sharply.
The problem with making things foolproof is that fools are so doggone ingenious...Dan Keebler
 
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RE: Is There A Market For Used A330/B777 By 2017-19?

Tue Jul 10, 2007 10:22 pm

Quoting EI321 (Reply 2):
But the difference between jets and props is much greater than the difference between a 777 and a 787.

In terms of passenger perception, that's certainly true. In terms of operating economics, the difference is vast. The airlines realize this, which is why the first eight years of 787 production is booked before first flight.
 
aminobwana
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RE: Is There A Market For Used A330/B777 By 2017-19?

Tue Jul 10, 2007 10:25 pm

Quoting Stitch (Reply 6):
For example, a 777-200ER delivered in 1998 for $130 million has a value of $81 million in 2005 - still worth 62%. In 2010, it will be worth $68 million - still over half. I do not have A330 figures, but I expect it is close. In 2020 it will be worth $36 million and ready for conversion into a freighter.

I do not think that this can be extrapolated to the present situation. The 777-200ER was still a state-of-the-art aircraft in 2005 ( nothing more advanced was available) !!!
But any B777 bought today will be obsolete in 2017-19, compared with the B787 !

Quoting Marquis (Reply 5):
I have to second that statement. The market for cargo conversion aircraft will be growing continuously in the future decade. Have a look at the current workhorses of the air cargo companies and their average fleet age. The passenger aircrafts you mentioned in your first post will definately see a "second" life as freight dogs.

No doubt. But of course, the conversion is expensive and the cost will be deduced from the second hand value. It would be interesting to know how much such a conversion costs (example: B767) ???

aminobwana
 
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moo
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RE: Is There A Market For Used A330/B777 By 2017-19?

Tue Jul 10, 2007 10:42 pm

Quoting SEPilot (Reply 9):
This begs the question. What is at issue is are the values of aircraft bought today going to be depressed excessively by the emergence of CFRP airplanes. I believe that they will be; of course there will always be a market for used planes, but the question is at what price? If the new generation of airliners lowers operating costs by 20%, which I believe they will, it will have a significant effect on fares, which will lower what everyone can charge. This will make old generation aircraft less desirable, and hence less valuable. As I said earlier, the full effect won't start being felt until the new generation planes start hitting the second hand market. Then the older planes values will fall sharply.

I dont think they will to the extent that it is detrimental to purchases made now - the second hand market is really, at the moment, driven by airlines that simply cannot afford to buy certain types of aircraft new, same as the leasing market, or go by the a business plan that involves operating second hand for a short period. From my experience in other markets, while conventional aircraft prices will certainly be depressed slightly, next generation aircraft will infact demand a premium on the market.

The biggest potential thing that will upset the second hand market is when leasing companies dump their fleets on them, and that doesnt matter if its conventional or next generation.
 
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par13del
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RE: Is There A Market For Used A330/B777 By 2017-19?

Tue Jul 10, 2007 10:50 pm

Modern a/c are always more efficient, when we look at air fares, have they really fallen because of more efficient a/c or more competition? If the modern CFRP a/c lower operating cost by 20%, do we really believe that those carriers will lower fares by any corresponding margin??, I don't think so. They may simple use the profits to offer more amenities and may even increase fares as a result. Leasing companies will bear the brunt to determine how the market shakes out, 5-10-15 year old a/c of the modern era can be efficient and effective within whatever parameters the carriers want to use to justify their use. Look at fleets today, the A330 killed the B767 but the B767 still flies, the B787 killed the A330 but its still sold, ditto the A350 and the B777, yes thats the a.net talking but the point remains, even though the B-777 has outsold the A340 recently, no one has sent the A340's to the desert, carriers just re-work their routes and bingo, the a/c pays for itself.

Leasing companies will have to decide whether they want to scrap a/c of place them with carriers at prices / cost which make them cost effective, besides, how many CRFP planes will be around in the next 10-15 years? Can a carrier look at its market and say wait a few years while we get new a/c, how exactly would they "hide" this market from those who have the a/c to take advantage of it with all the Open Skies agreements now on the books?
 
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RE: Is There A Market For Used A330/B777 By 2017-19?

Tue Jul 10, 2007 10:56 pm

Quoting Moo (Reply 12):
The biggest potential thing that will upset the second hand market is when leasing companies dump their fleets on them, and that doesnt matter if its conventional or next generation.

The simple reality is that as the new generation of airliners becomes numerous the resale values of the old generation will suffer. The fact that the new planes should be 20% cheaper to operate and will last longer is the reason. When this will happen is debatable; the fact that it will is not. The magnitude is also in debate; both will depend largely on the ability of Boeing and Airbus to produce the new planes. The goal for fleet managers is to try and position themselves so as to benefit from this shift rather than be victimized by it.
The problem with making things foolproof is that fools are so doggone ingenious...Dan Keebler
 
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moo
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RE: Is There A Market For Used A330/B777 By 2017-19?

Tue Jul 10, 2007 11:02 pm

Quoting SEPilot (Reply 14):
The simple reality is that as the new generation of airliners becomes numerous the resale values of the old generation will suffer. The fact that the new planes should be 20% cheaper to operate and will last longer is the reason. When this will happen is debatable; the fact that it will is not. The magnitude is also in debate; both will depend largely on the ability of Boeing and Airbus to produce the new planes. The goal for fleet managers is to try and position themselves so as to benefit from this shift rather than be victimized by it.

The problem is is that it really isnt a 'simple reality' - you have to take into account the market growth over the next 10 - 12 years, and the duration that airlines keep their new aircraft among a billion other variables.

With the added bonus of lower MX costs for the 787, and lower fatigue potential, chances are that airlines receiving their 787s now (next 3 - 5 years) won't be disposing of them by the end of the next decade anyway - in all probability the 787 will probably remain in fleet service longer than previous generations.

So it all depends on the *number* of aircraft being disposed of on the second hand market, if its a low number then its not going to affect market prices for the A330/B777 in any big way.

If the question had pushed the timeframe out another 5 - 10 years, then I would agree that the market prices would not be good at all, but a decade from now? No, not really.
 
aminobwana
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RE: Is There A Market For Used A330/B777 By 2017-19?

Tue Jul 10, 2007 11:06 pm

The reference to present examples simply do not apply here.

We have no case where a today model substituted the precedent one with operation costs 20% smaller.

This makes the problem really difficult

aminobwana
 
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RE: Is There A Market For Used A330/B777 By 2017-19?

Tue Jul 10, 2007 11:08 pm

Quoting Moo (Reply 15):
If the question had pushed the timeframe out another 5 - 10 years, then I would agree that the market prices would not be good at all, but a decade from now? No, not really.

I agree with you there. I really don't expect values of planes bought today to suffer much before 2020, and probably not before 2025. The real effect is going to be that the airlines that get 787's and A350's early are going to be in much better shape than those that don't.
The problem with making things foolproof is that fools are so doggone ingenious...Dan Keebler
 
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RE: Is There A Market For Used A330/B777 By 2017-19?

Tue Jul 10, 2007 11:43 pm

I think you can compare it with the situation 15 years ago as the first A340s ,A330s and 777s started to replace Dc10s and L1011s. These new planes used less fuel than its predecessors (like the 787 and A350 do in comparison to the A340 and 777) and had a 2 man except of a 3 man cockpit, required less maintenance etc...
So many airlines that were phasing out their Dc10s had no problem selling them to smaller airlines that were using even older aircraft and could not afford shiny new MD 11s, A340s or 777s other Dc10s were converted to freighters and found a new home, too.
The first company is already working on a A340 freighter convertion and it is likely the A330 and 777 will follow to replace the Dc10Fs that before replaced the Dc8 and 707F.....I don' t see any problem finding a new home for a A330 or 777 in 2019 not everybody can afford a new aircraft and a well maintained LH A330 or SQ 777 will be gladly taken by many airlines.
It will forever be a McDonnell Douglas MD 80 , Boeing MD 80 sounds so wrong
 
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Stitch
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RE: Is There A Market For Used A330/B777 By 2017-19?

Tue Jul 10, 2007 11:46 pm

Quoting Aminobwana (Reply 11):
I do not think that this can be extrapolated to the present situation. The 777-200ER was still a state-of-the-art aircraft in 2005 ( nothing more advanced was available) !!! But any B777 bought today will be obsolete in 2017-19, compared with the B787 !

One would think the company that calculates those values for the years after the 787 and A350 enters service would take that fact into account when calculating those values, wouldn't one?
 
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moo
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RE: Is There A Market For Used A330/B777 By 2017-19?

Wed Jul 11, 2007 12:01 am

Quoting Aminobwana (Reply 11):
I do not think that this can be extrapolated to the present situation. The 777-200ER was still a state-of-the-art aircraft in 2005 ( nothing more advanced was available) !!!
But any B777 bought today will be obsolete in 2017-19, compared with the B787 !

The thing is, that doesn't matter if there isnt anything to replace the B777 family - the B787 is not a replacement, and the A350 doesn't compete with the entire B777 range.

So it doesn't matter if in 10 years the B777 is technically obsolete compared to other aircraft if theres nothing actually replacing it, assuming that airlines will still want an aircraft in the B777 capacity ranges in 10 years (and I think thats a very safe assumption to make).

In short, the presences of the B787, while being a generation ahead in terms of technology, does not put the B777 out to pasture.
 
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RE: Is There A Market For Used A330/B777 By 2017-19?

Wed Jul 11, 2007 12:22 am

Quoting Moo (Reply 20):
So it doesn't matter if in 10 years the B777 is technically obsolete compared to other aircraft if theres nothing actually replacing it, assuming that airlines will still want an aircraft in the B777 capacity ranges in 10 years (and I think thats a very safe assumption to make).

If a slightly smaller plane offers a 20% better CASM it will quickly quell the desire for the larger plane.
The problem with making things foolproof is that fools are so doggone ingenious...Dan Keebler
 
zvezda
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RE: Is There A Market For Used A330/B777 By 2017-19?

Wed Jul 11, 2007 1:00 am

Quoting SEPilot (Reply 21):
If a slightly smaller plane offers a 20% better CASM it will quickly quell the desire for the larger plane.

If the smaller plane has sufficient range and the same CASM, it will quickly quell the desire for the larger plane.
 
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moo
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RE: Is There A Market For Used A330/B777 By 2017-19?

Wed Jul 11, 2007 1:03 am

Quoting Zvezda (Reply 22):
If the smaller plane has sufficient range and the same CASM, it will quickly quell the desire for the larger plane.

If the smaller plane has sufficient range, the same or better CASM, is readily available and there is available capacity at each airport for more frequency, it will quickly quell the desire for the larger plane.
 
zvezda
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RE: Is There A Market For Used A330/B777 By 2017-1

Wed Jul 11, 2007 1:09 am

Quoting Moo (Reply 23):
If the smaller plane has sufficient range, the same or better CASM, is readily available and there is available capacity at each airport for more frequency, it will quickly quell the desire for the larger plane.

If the smaller plane has sufficient range, the same or better CASM, is readily available, and there is available capacity at each airport for more frequency, it will immediately eliminate all desire for the larger plane.
 
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moo
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RE: Is There A Market For Used A330/B777 By 2017-19?

Wed Jul 11, 2007 1:14 am

Quoting Zvezda (Reply 24):
If the smaller plane has sufficient range, the same or better CASM, is readily available, and there is available capacity at each airport for more frequency, it will immediately eliminate all desire for the larger plane.

If the smaller plane has sufficient range, the same or better CASM, is readily available, and there is available capacity at each airport for more frequency, it will immediately eliminate all desire for the larger plane, predict the winning lottery numbers, save the world from global warming, look after the kids and walk the dog.
 
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Stitch
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RE: Is There A Market For Used A330/B777 By 2017-19?

Wed Jul 11, 2007 1:15 am

How about we just shorten it to "For a given mission, if one plane works, and the other doesn't, the former will eliminate all desire for the latter?" Big grin
 
LipeGIG
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RE: Is There A Market For Used A330/B777 By 2017-19?

Wed Jul 11, 2007 1:16 am

There's a huge number of airlines using 767 and M11, planes that could be replaced. Also 777 production is still in place which means the market will see in 2017 some A332/772 with less than 10 years of life, very interesting for several airlines. IMO market will remain good for used A330/772 even in 2020.

Boeing and Airbus will be not able to replace the entire fleet with 787 / A350 at current demand levels, so 777 and A330 will remain an important role for the market like the 763 is today.

Felipe
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aminobwana
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RE: Is There A Market For Used A330/B777 By 2017-19?

Wed Jul 11, 2007 1:17 am

Quoting Moo (Reply 23):
If the smaller plane has sufficient range, the same or better CASM, is readily available and there is available capacity at each airport for more frequency, it will quickly quell the desire for the larger plane.

There is the mistaken perception that because the A380 will substituted in some cases by two(2) B787 flights, these would mean more airport congestion.
In a example LHR - SINGAPORE this is probably true

But not for GLASGOW (or Dublin, Manchester, Birmigham, etc.etc) - SINGAPORE
* The passengers from the Briish cities woudld fly first to LHR and use arrival gates there, to board the A380,
* Whilst with the B787 would be able to fly ias example Glasgow-Singapore non stop, not congestioning LHR !!

aminobwana
 
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moo
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RE: Is There A Market For Used A330/B777 By 2017-19?

Wed Jul 11, 2007 1:26 am

Quoting Aminobwana (Reply 28):

There is the mistaken perception that because the A380 will substituted in some cases by two(2) B787 flights, these would mean more airport congestion.

Its not a mistaken perception because, as you go on to say, some airports are slot restricted and some aren't - its not a blanket statement applicable in all circumstances, but it is applicable in some circumstances and it should be taken into account when these things are discussed.

If you suddenly dropped all VLAs from the equation (A380, B747, B773 and to a lesser extent B772, A346), and replaced them with a greater frequency of smaller aircraft, you will end up potentially having more airports being slot restricted, or at least congested to a greater extent, so yes it is most certainly a valid perception.
 
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RE: Is There A Market For Used A330/B777 By 2017-19?

Wed Jul 11, 2007 2:00 am

Quoting SEPilot (Reply 14):
The fact that the new planes should be 20% cheaper to operate and will last longer is the reason

IMO this will mean that these models will be SO much longer arriving at the 'freighter conversion point', that demand for 'old' technology airframes may well continue to be strong (especially if overall demand continues to grow..)

Regards
 
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RE: Is There A Market For Used A330/B777 By 2017-1

Wed Jul 11, 2007 2:04 am

Quoting Astuteman (Reply 30):

IMO this will mean that these models will be SO much longer arriving at the 'freighter conversion point', that demand for 'old' technology airframes may well continue to be strong (especially if overall demand continues to grow..)

 bigthumbsup 
Excellent point; especially as production will not meet demand for a long time.
The problem with making things foolproof is that fools are so doggone ingenious...Dan Keebler
 
bmacleod
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RE: Is There A Market For Used A330/B777 By 2017-19?

Wed Jul 11, 2007 3:12 am

Quoting LipeGIG (Reply 27):
There's a huge number of airlines using 767 and M11, planes that could be replaced.

Last time I checked, only a few airlines were operating passenger MD11s, Finnair KLM being among them. Finnair will likely go to the A330, KLM the 777.

[Edited 2007-07-10 20:13:15]
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RE: Is There A Market For Used A330/B777 By 2017-19?

Wed Jul 11, 2007 3:20 am

Quoting Aminobwana (Reply 28):
There is the mistaken perception that because the A380 will substituted in some cases by two(2) B787 flights, these would mean more airport congestion.
In a example LHR - SINGAPORE this is probably true

But not for GLASGOW (or Dublin, Manchester, Birmigham, etc.etc) - SINGAPORE

SQ have been plying SIN-MAN for over 20 years now, most of which was SIN-"Europe"-MAN with 743s to begin with the route then going to 744. It then went to 5 weekly non-stop 772 and 2 744 via ZRH; currently operating just the 5 772s a week but gonig to daily from October. THey have indicated previously they envisage 10 777 services a week "should demand be there".

EK, on the other hand, and its DXB-MAN service is the one to keep an eye on as it has constantly seen increases in aircraft size on the route and is currently double daily 773. It was once mooted that EK would be bringing A380s to MAN (and keeping a 2nd service!) by 2007, obviously with the A380 delays, I am anticipating that the earliest they would contemplate A380 to MAN is 2009. And it would still not impact on their BHX, GLA and NCL operations.
 
baron95
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RE: Is There A Market For Used A330/B777 By 2017-19?

Wed Jul 11, 2007 5:23 am

Given the demand for twin widebody jetliners (from used 767 to brand new 773s and A330s) for both replacement and expansion, and the fact that 787s/A350s are going to be sold-old for a decade by EIS date of each model, I can confidently predict, that abscent a major industry downturn, the values of used A330s/777s will be as good as any model in recent history.

If 763s are being refurbished by the likes of AA and DL to provide another decade of useful service with imminent arrival of the 787, I'm sure that 15 years from now AA, UA, DL will be investing on a 777 makeover to make them last another 10 years.

The 787 may have 20% lower operational costs than a 763, but the leasing or financing costs of a brand new 787 vs a 15 year old 763 are probably 250% higher. So 767s and 777s and A330s will remain attractive for years to come.

If NW can come to the conclusion that 40-year old DC9s (which they own and are keeping) are more cost effective than A320s (which they lease and are dropping), that should tell you something.
Killer Fleet: E190, 737-900ER, 777-300ER
 
aminobwana
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RE: Is There A Market For Used A330/B777 By 2017-19?

Wed Jul 11, 2007 6:12 am

Quoting Moo (Reply 29):
If you suddenly dropped all VLAs from the equation (A380, B747, B773 and to a lesser extent B772, A346), and replaced them with a greater frequency of smaller aircraft, you will end up potentially having more airports being slot restricted, or at least congested to a greater extent, so yes it is most certainly a valid perception.

I think you missed my point.

LHR-London-Singapore
A321 Glasgow-LHR 200 Pax 1 slot occupied in LHR
A380 LHR-Singapore 400 pax (200 transferred from Glasgow), 1 slot occupied in LHR
Total LHR: 2 slots

Glasgow-Singapore Non-stop
B787 Glasgow-Singapore (200 pax) No slot in LHR
B787 London-Singapore. 1 slot in LHR
Total LHR: 1 slot

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David_itl
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RE: Is There A Market For Used A330/B777 By 2017-19?

Wed Jul 11, 2007 6:43 am

Quoting Aminobwana (Reply 35):
A380 LHR-Singapore 400 pax (200 transferred from Glasgow), 1 slot occupied in LH

I'm sure that if you looked at the statistics, you will find only a small proportion would route GLA-LHR-SIN. The introduction of a GLA-SIN non-stop service will not mean that SQ would go to 787 on LHR-SIN as there is sufficient demand for them to warrant A380s on that service. I can't think of a MAN long-haul service being introduced having had a medium to long-term effect on the performance of the LHR/LGW service to the same destination which necessitated the use of a smaller aircraft; short-term has seen some downward movement on some routes, but passenger numbers built up again so growing the overall UK market to that destination.
 
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RE: Is There A Market For Used A330/B777 By 2017-19?

Wed Jul 11, 2007 7:13 am

Quoting Aminobwana (Reply 35):
I think you missed my point.

I didn't miss your point at all, I am just not of the opinion that point to point traffic will grow at the cost of hub traffic, which is what your point suggests.

Point to point (your Glasgow to Singapore route) will certainly grow and may require its own dedicated aircraft, but so will hub traffic in the mean time - p2p traffic is probably the biggest growing market at the moment, but there will still be a need for VLAs between the hubs, which are more often than not the major slot restricted airports in the world.

Its not an 'either or' situation, traffic will increase in both cases, and if you try and remove VLAs from the equation, you create the problem I commented on above.
 
aminobwana
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RE: Is There A Market For Used A330/B777 By 2017-19?

Wed Jul 11, 2007 7:58 am

Quoting David_itl (Reply 36):
I'm sure that if you looked at the statistics, you will find only a small proportion would route GLA-LHR-SIN. The introduction of a GLA-SIN non-stop service will not mean that SQ would go to 787 on LHR-SIN as there is sufficient demand for them to warrant A380s on that service

Of course SQ will not use a B787 if the could fill A380 with the same frequency, but this do not change the fact that SQ will occupy only one slot in LHR as long the PAX from Glasgow to Singapore fly directly.

Lets put it differently:

* Lets asume that London originated LHR - SIN are 800 pax daily, Glasgor SIN 200, total GB-SIN 1000. * SQ has A380 and B787, BA B787 and A321

all via London
BA A321 Glasgow-LHR 200 pax (1 Flight, 1 slot in LHR)
SQ A380 LHR - SIN each 400 pax = 800 pax (2 flights, 3 slots in LHR)
SQ B787 LHR - SIN 200 pax (1 flight, 1 slot in LHR) (total w/A380 = 1000)
Total: 4 slots in LHR

Glasgow-SIN non stop
BA B787 Glasgow- SIN 200 pax (1 Flight, 0 slot in LHR) (total 200 pax)
SQ A380 LHR - SIN each 400 pax (2 flights, 2 slots in LHR) (total 800 pax)

Total: 2 slots in LHR

This is a example for slots, not real figures of Pax.

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zvezda
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RE: Is There A Market For Used A330/B777 By 2017-19?

Wed Jul 11, 2007 8:14 am

Quoting Aminobwana (Reply 38):
Of course SQ will not use a B787 if the could fill A380 with the same frequency

Sorry, you're leaving out yields. If one can fill an 787, then one can also fill a WhaleJet, but the average fare will necessarily be lower in the latter case.
 
aminobwana
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RE: Is There A Market For Used A330/B777 By 2017-19?

Wed Jul 11, 2007 8:34 am

Quoting Zvezda (Reply 39):
Sorry, you're leaving out yields. If one can fill an 787, then one can also fill a WhaleJet, but the average fare will necessarily be lower in the latter case.

Why you are assuming that the average at a A380 will be lower ?? Its obviously depends of the configuration !
Anyway, my example only is applicable to slot count !

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Stitch
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RE: Is There A Market For Used A330/B777 By 2017-19?

Wed Jul 11, 2007 8:42 am

Quoting Aminobwana (Reply 40):
Why you are assuming that the average at a A380 will be lower?

It is more likely 200 people want to fly on a, say, $500 average fare then 450. To get those 450 people, you might have to charge, say, $200. So the 787 brings in $100,000 and the A380 brings in $90,000.
 
aminobwana
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RE: Is There A Market For Used A330/B777 By 2017-19?

Wed Jul 11, 2007 9:09 am

Quoting Stitch (Reply 41):
It is more likely 200 people want to fly on a, say, $500 average fare then 450. To get those 450 people, you might have to charge, say, $200. So the 787 brings in $100,000 and the A380 brings in $90,000.

I do not follow your example, but I assume you mean that to get more passengers the price must be lower.
Agreed. (nevertheless, unless the price gets much, much lower, the No. of pax will vary little) But please consider that my example referred to slots only. I simply consider the No. of pax LHR-SIN a given, independently of the plane type used.

My point is obvious: any passenger flying non-stop from Glasgow reduce slots needed in london

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Stitch
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RE: Is There A Market For Used A330/B777 By 2017-19?

Wed Jul 11, 2007 11:03 am

Quoting Aminobwana (Reply 42):
My point is obvious: any passenger flying non-stop from Glasgow reduce slots needed in london

Only if enough passengers who flew from Glasgow to Singapore via London-Heathrow is sufficient to negate the need for that Glasgow to London-Heathrow flight in the first place.

Chances are very good of that of the, say, 150 passengers (assuming a BA A320) on that flight between GLA and LHR, not all 150 are going on to SIN. Probably not even a plurality of them when you consider those going to JFK. Or LAX. Then subtract the number going to CPT. BCN. MXP. FCO. NRT. HKG. SYD. Etc. Etc.

I'd bet the chances of BA still operating that GLS-LHR A320 (or perhaps now, A319) flight to be close to 100% even if SQ launched direct GLA-SIN service with an A319CJ or an A388.