flyhi
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Monarch Cancels 787

Tue Sep 06, 2011 3:19 pm

It's official. There have been many rumours circulating about who cancelled the 787 order and today Monarch have finally confirmed that they will no longer be taking receipt of the 6 x 787's they were due to expect. Details are reported in Travelmole and Travel Weekly

Monarch have announced that they intend to concentrate their immediate efforts on progressing narrow body replacements for the fleet to enable them to expand into new UK bases and on routes not previously operated by them before. This is reported to be taking place in 2012. Fabio Mantegazza has previously mentioned also that Monarch intends to start cooperating with Air Europa through its scheduled arm.

Monarch says that further consideration will be given to developing its long haul operations in the future.
 
planesailing
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RE: Monarch Cancels 787

Tue Sep 06, 2011 3:43 pm

This is interesting. As I understood it, the 787's were also to replace the A306's. How much useful life is left in these aircraft now, Monarch are without doubt an anomoly in operating this aircraft these days. If these aren't replaced, then will the tour operators who use MON, Red Sea, Anatolian, Jewel in the Crown etc charter two aircraft to operate the same route? This is without doubt less cost effective.

Quoting Flyhi (Thread starter):
Monarch says that further consideration will be given to developing its long haul operations in the future.

It sounds like MON has firm plans to grown ZB to effectively become the business. The A330's only fly predominately to Turkey/Egypt now days with odd rotations to SFB and the Caribbean. Is there enough room in the already crowded short/medium haul market place for MON/ZB to grow?

Quoting Flyhi (Thread starter):
Monarch have announced that they intend to concentrate their immediate efforts on progressing narrow body replacements for the fleet to enable them to expand into new UK bases and on routes not previously operated by them before. This is reported to be taking place in 2012.

I take it this will be 2nd hand frames then as 2012 would be too short a time frame for anything new.

Quoting Flyhi (Thread starter):
Monarch intends to start cooperating with Air Europa through its scheduled arm.

Sounds like a mini BA/IB. Be interesting to see what they have planned. Could it eventually lead to ZB going into Skyteam?
 
Clydenairways
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RE: Monarch Cancels 787

Tue Sep 06, 2011 3:49 pm

The 787 probably had too much range for them anyway.
 
wilco737
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RE: Monarch Cancels 787

Tue Sep 06, 2011 3:53 pm

Even it was rumoured a lot about, still bad news in my opinion.

What happens with the available slots now? Are they just gone or other airlines which ordered the 787 already take them?
Or maybe a new airline will jump in and take the 6 slots?

I still hope for LH to buy them   

wilco737
  
 
SonomaFlyer
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RE: Monarch Cancels 787

Tue Sep 06, 2011 3:59 pm

IIRC aren't some/many of the frames the earlier version (overweight) types?
 
flyhi
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RE: Monarch Cancels 787

Tue Sep 06, 2011 4:16 pm

Quoting planesailing (Reply 1):
If these aren't replaced, then will the tour operators who use MON, Red Sea, Anatolian, Jewel in the Crown etc charter two aircraft to operate the same route? This is without doubt less cost effective.

The above tour operators only charter an allocation of seats on these flights and not full plane loads. The SSH route will from this winter become a scheduled route on which I understand charterers will be able to purchase a number of seats to suit their requirements. The fact that perhaps 2 narrow body aircraft may be used instead of one wide body will make little difference.

Quoting planesailing (Reply 1):
The A330's only fly predominately to Turkey/Egypt now days with odd rotations to SFB and the Caribbean. Is there enough room in the already crowded short/medium haul market place for MON/ZB to grow?

This year Monarch's A330's have flown regularly to SSH, SFB, GND & TAB, AGP, ACE, ALC, PFO and AYT, with a stint to RSW. Monarch have said they intend to fly to destinations they have not previously flown to. Whilst the short/medium market is quite overcrowded as you point out, Monarch are doing well to position themselves somewhere between the Ryanair/Easyjet model and that of a full service carrier such as BA by offering a build-your-own service. They also tend to concentrate their efforts on the destinations of holiday home destinations where people don't need a full package but just want a flight. In these cases, people can buy their flight from Monarch/Avro instead of the likes of TCX and TOM who seem to designate many of their seats to their own tour packages.

Quoting clydenairways (Reply 2):
I take it this will be 2nd hand frames then as 2012 would be too short a time frame for anything new.

In the short term, maybe. There is always the option to lease new aircraft from leasing companies once they become available as well.

Quoting planesailing (Reply 1):
Sounds like a mini BA/IB. Be interesting to see what they have planned. Could it eventually lead to ZB going into Skyteam?

This should be interesting and I would like to know the reason behind this. Is it to feed to Air Europa's hub in Madrid for onward flights to the Caribbean and South America? Might these be destinations offered by Monarch Holidays and Cosmos in the future? To what extent will cooperation exist? I doubt though that entry into any alliances is a priority for Monarch right now. We shall see
 
gilesdavies
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RE: Monarch Cancels 787

Tue Sep 06, 2011 4:31 pm

Not a huge surprise especially as the airlines shifts its business model to be a good quality low cost carrier...

Despite this market already being very crowded, the airline seems to be thriving and pulling in customers that may not opt to fly with easyJet or Ryanair. On the perception ZB offer a better service. If you read the airlines press releases, they regularly report record load factors and introducing additional frequencies to routes due to popular demand.

The charter market seems to be where the airline is struggling with, with the likes TCX and TOM dominating this market and keeping more and more of their flights with their own airline. Where before Thomas Cook and Thomson may have used Monarch on certain routes to boost capacity, and their simply isn't that need anymore.

Ironically even Monarch's sister company Cosmos is increasingly using spare seats on Thomson and Thomas Cook flights to fly their customers on package holidays. Especially to keep a presence at local airports. eg. LTN is a large base for Monarch with 5-6 aircraft based there for scheduled services, but if you look at a Cosmos brochure they either book customers on to Monarch's scheduled service or if they don't fly to that destination they are using Thomson Airways to fly their passengers. I think there is only 2-3 actual weekly charters to ZTH and PMI. Previous years back, Monarch had a large charter programme from LTN along side the previous smaller scheduled service they operated.

Monarch are big fans of their A320/A321's, could this mean, we will soon be seeing an order for A321 NEO's to replace the ageing Airbus A300-600Rs and last few remaining 757-200's, if they require nothing bigger? The A321 NEO should be able to serve the longer desintations to Egypt and the Gambia that the A320/321 struggle with, and at present is where the 757 and A300's come into their own for the airline.
 
planesailing
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RE: Monarch Cancels 787

Tue Sep 06, 2011 4:35 pm

Quoting Flyhi (Reply 5):
The above tour operators only charter an allocation of seats on these flights and not full plane loads. The SSH route will from this winter become a scheduled route on which I understand charterers will be able to purchase a number of seats to suit their requirements. The fact that perhaps 2 narrow body aircraft may be used instead of one wide body will make little difference.

From my understanding a couple of routes show only as the organising tour operator and seats are not available through Avro/Cosmos. They have chartered the aircraft rather than seat blocks. If two narrow bodies are used instead of one widebody, obviously there is then a CASM difference in operating the aircraft, which results in a higher chartering cost for the tour operator. As I say, it is only on a small number of flights.

Quoting Flyhi (Reply 5):
This year Monarch's A330's have flown regularly to SSH, SFB, GND & TAB, AGP, ACE, ALC, PFO and AYT, with a stint to RSW. Monarch have said they intend to fly to destinations they have not previously flown to. Whilst the short/medium market is quite overcrowded as you point out, Monarch are doing well to position themselves somewhere between the Ryanair/Easyjet model and that of a full service carrier such as BA by offering a build-your-own service. They also tend to concentrate their efforts on the destinations of holiday home destinations where people don't need a full package but just want a flight. In these cases, people can buy their flight from Monarch/Avro instead of the likes of TCX and TOM who seem to designate many of their seats to their own tour packages.

Whilst TOM is integrated with Thomson Holidays, a large number of TA's book seats on TOM flights for their customers by booking flight only tickets. Although the researchers do not show as TOM operating on behalf of tour operators, a certain number do still regularly book onto the flights.

Quoting Flyhi (Reply 5):
This should be interesting and I would like to know the reason behind this. Is it to feed to Air Europa's hub in Madrid for onward flights to the Caribbean and South America? Might these be destinations offered by Monarch Holidays and Cosmos in the future? To what extent will cooperation exist? I doubt though that entry into any alliances is a priority for Monarch right now. We shall see

Good point about the MAD connections, though I am still of the thought that the average holiday traveller expects a direct flight. People from the UK just do not understand the mentality of having to stop somewhere first, especially when there is a direct routing available with a carrier. I have had flights going with tech stops etc, and people just don't get it.

Whilst alliance entry might not be a priority, it is does offer potential and with the likes of AB going to Oneworld, you can never say no with the possibility.
 
BMED
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RE: Monarch Cancels 787

Tue Sep 06, 2011 4:45 pm

I've always been impressed that Monarch has faired well over the years where other carriers have merged or disappeared altogether. While its a shame to see the long haul future move further away at least the airline is been flexible in adapting their product to the market!

It will be interesting to see how the co-operation with Air Europa goes and if there could be the potential for connections onto other destinations. It does give the impression they are moving closer to a schedule operation.
Living the jetset life! No better way to be
 
flyhi
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RE: Monarch Cancels 787

Tue Sep 06, 2011 5:08 pm

Quoting planesailing (Reply 7):
From my understanding a couple of routes show only as the organising tour operator and seats are not available through Avro/Cosmos. They have chartered the aircraft rather than seat blocks. If two narrow bodies are used instead of one widebody, obviously there is then a CASM difference in operating the aircraft, which results in a higher chartering cost for the tour operator. As I say, it is only on a small number of flights.

There are still a few charters where the tour operator charters the full plane instead of a selected number of seats. In fact Monarch have said that in the future they intend only to charter flights on this basis only and not amongst shared operators. The benefit to tour operators is that they are not left trying to sell off seats for a penny when they are unable to sell all the seats on the plane (something that charterers have been doing for a long time and the general public got wise to, thus resulting in high volume last minute bookings denting the profits of travel companies and the operators who sold them). I would imagine that remaining stock could be sold by the airline at the prices published on their website. This way Monarch is more in control of its volumes and able to recognize demand.

Quoting planesailing (Reply 7):
Whilst TOM is integrated with Thomson Holidays, a large number of TA's book seats on TOM flights for their customers by booking flight only tickets. Although the researchers do not show as TOM operating on behalf of tour operators, a certain number do still regularly book onto the flights.

This is true but tour operators such as Thomson and Thomas Cook will often hold back many of their seats for their tour operations until such a time that they feel it necessary to release the spare capacity into their seat only sales. Because Monarch will be in control of their stock more so than when they chartered planes out, at least they will be able to identify where new opportunities lie for growth.

Quoting planesailing (Reply 7):
Good point about the MAD connections, though I am still of the thought that the average holiday traveller expects a direct flight. People from the UK just do not understand the mentality of having to stop somewhere first, especially when there is a direct routing available with a carrier. I have had flights going with tech stops etc, and people just don't get it.

Unfortunately, I agree with you about people not having the mentality of connecting. However, in the knowledge that Air France, KLM, Lufthansa and BA have successful operations from regional airports where people connect from every day then I only hope that if this is their intention they can be successful with it. I'm really not sure what their intention is here though. All I know is that they want to attract more inbound traffic from the likes of Spain and Portugal but quite how that ties in with Air Europa I'm not sure.
 
Btblue
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RE: Monarch Cancels 787

Tue Sep 06, 2011 5:11 pm

Maybe they decided that money committed to those aircraft would be better spent on buying BMI.    Hence the cancellation...

[Edited 2011-09-06 10:16:36]

Of course, they may have gotten a sweet deal on the 737MAX. Guess we'll have to wait and see. Hmmph.


[Edited 2011-09-06 10:17:27]
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flyhi
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RE: Monarch Cancels 787

Tue Sep 06, 2011 5:19 pm

Quoting btblue (Reply 10):
Maybe they decided that money committed to those aircraft would be better spent on biying BMI.

lol. This even popped into my head recently. There is a good deal of fleet commonality here although I doubt Monarch are interested in those coveted LHR slots.
 
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Stitch
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RE: Monarch Cancels 787

Tue Sep 06, 2011 5:53 pm

Quoting wilco737 (Reply 3):
What happens with the available slots now? Are they just gone or other airlines which ordered the 787 already take them?

I expect they will be re-allocated within the delivery chain and made available to customers who desire an earlier delivery.



Quoting SonomaFlyer (Reply 4):
IIRC aren't some/many of the frames the earlier version (overweight) types?

It looks like Monarch was slated to receive a post-Block 50 aircraft and those should have a minimal (if any) overweight condition.
 
flyhi
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RE: Monarch Cancels 787

Tue Sep 06, 2011 6:18 pm

Quoting Stitch (Reply 12):
I expect they will be re-allocated within the delivery chain and made available to customers who desire an earlier delivery.

There was much cynicism amongst employees at Monarch that they would never receive the aircraft in the first place with many people saying that they would sell the aircraft or the slots to other operators. Personally I doubt this very much and as recent as June this year it was reported in the TTG that "Monarch Airlines remains committed to the Boeing 787 Dreamliner aircraft despite its order being delayed by at least four years."
 
Viscount724
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RE: Monarch Cancels 787

Tue Sep 06, 2011 7:18 pm

With 4 months to go, I think 787 net orders for 2011 stand at minus 26 (no new orders and 26 cancellations). A quick check of Boeing's orders/deliveries data shows that this is almost unprecedented.

The only examples I could find where a major Boeing type went an entire calendar year with no new orders were 1994 when the 777 had no orders (the year before it went into service), and 2002 when the 757 had no orders (the year before its final 7 orders before production ceased).
 
gkirk
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RE: Monarch Cancels 787

Tue Sep 06, 2011 8:01 pm

10-15 of the new re-engined 737s perhaps?

[Edited 2011-09-07 05:33:10 by SA7700]
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David_itl
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RE: Monarch Cancels 787

Tue Sep 06, 2011 8:11 pm

Quoting gkirk (Reply 18):
10-15 of the new re-engined 737s perhaps?

Perhaps. But what's the point of them having 10 to 15 of them when they've got a sizeable A320/A321 fleet that will need replacing? They''d have to end up with 30+ and have all the costs of switching fleets. Rather fancy this will be an Airbus order (or leases) with perhaps some A319s and A320s with options on the A320NEO + A321NEO. If the medium-term is planned for long-haul, we'd then be looking at both A350 + 787s but wonder what kind of compatibilty is going to occur between the A320 and the A350. There's also the interesting question over the 787 "Goldencare" programme that Monarch and Boeing signed - how hard will that be to implement when they'll have no 787s of their own?
 
babybus
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RE: Monarch Cancels 787

Tue Sep 06, 2011 8:56 pm

Did they really need the 787?

They have 2 A330s and could possibly get more if they wanted for the future. It's an aircraft they know and operates for many airlines as its long haul aircraft of choice. Where in the world do MON want to fly that an A330 can't get to?

Seems the 787 is off to a bumpy start in the UK.
and with that..cabin crew, seats for landing please.
 
gilesdavies
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RE: Monarch Cancels 787

Tue Sep 06, 2011 8:58 pm

Maybe I worded that wrong...

That is such a moronic statement to say! Monarch is one of the last charter airlines flying widebodies from the UK to Europe, Canary Islands and Egypt, these routes are dominated by A32X, 737 and 757 plying the routes!

An A321 is barely a replacement for a 370 seater A300, but if the airline is saying they no longer have a need for widebodied aircraft of short/medium haul flights, its inevitable that the narrow bodied aircrafts are going to be flying the routes they once operated!

My money is still on, that any new orders for aircraft being the A320/321 NEO types and the airline might pick up some second hand A320 family aircraft to boost any short term growth. Possibly BMI, as they look to reduce their fleet size and this is where Monarch have picked up second hand aircraft in the past.

I'd be interested to know what the plans are for the A300's now? Will they keep them flying for a few more years until some new aircraft arrive or will they still retire them as planned next year... As the airline operates them in such a high density, I'd imagine they are still quite economical to fly (provided they can fill them) for their age. But on the other hand with them now around 21 yrs old, and spending their whole lives working in the charter market, they probably have a very high number of cycles and may be requiring major maintenance checks which might not be economical.

Quoting Babybus (Reply 20):
Seems the 787 is off to a bumpy start in the UK.

Not really Thomson Airways (or the old First Choice) were always going to be the UK launch customer of the 787 and we still have loads to come for British Airways and Virgin.

Actually just after I writing all of this, I think Monarch were not due to receive their 787's until 2013-14, due to the on-going delays with the launch of the aircraft.

[Edited 2011-09-06 14:04:52]

[Edited 2011-09-07 05:37:32 by SA7700]
 
flyhi
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RE: Monarch Cancels 787

Tue Sep 06, 2011 9:05 pm

Quoting david_itl (Reply 19):
There's also the interesting question over the 787 "Goldencare" programme that Monarch and Boeing signed - how hard will that be to implement when they'll have no 787s of their own?

This will not affect in any way Monarch Airline Engineering's award of the Boeing Goldcare package. They remain committed to line and base capability from early 2012. Monarch already support Boeing 737, 757, 767 and 777 aircraft whilst the airline currently operates only one of the above. I am sure the Thomson aircraft will keep them more than busy.
 
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Stitch
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RE: Monarch Cancels 787

Tue Sep 06, 2011 9:37 pm

Quoting gilesdavies (Reply 21):
Actually just after I writing all of this, I think Monarch were not due to receive their 787's until 2013-14, due to the on-going delays with the launch of the aircraft.

That sounds about right. They announced in 2008 that their deliveries were pushed back to 2010, though they expected that could be 2011. So with EIS now in 2011, a 2013-2014 delivery frame sounded right.
 
bennett123
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RE: Monarch Cancels 787

Wed Sep 07, 2011 8:46 am

Hqpefully we get to see the A300's for a bit longer.
 
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airbuseric
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RE: Monarch Cancels 787

Wed Sep 07, 2011 9:24 am

Quoting Stitch (Reply 12):
I expect they will be re-allocated within the delivery chain and made available to customers who desire an earlier delivery.

Let's hope the available slots can be taken over by TUI group. Dutch company ArkeFly (part of TUI) is looking for more 787's according the ongoing rumours.
"The whole world steps aside for the man who knows where he is going"
 
BlueShamu330s
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RE: Monarch Cancels 787

Wed Sep 07, 2011 9:38 am

This cancellation marks a dramatic turn in Monarch's future planning and strategy.

There is not one single reason to attribute this cancellation too.

By now, Monarch should have had at least 18 months' experience with their Dreamliners. I brought it to this board's attention before it went public when the delay was extended a third time to Q1 or Q2 2013. Boeing's inability to deliver on time has cost Monarch dearly in rescheduling, renegotiating leases on already old frames, and on sub-leasing. Since Monarch announced previously their intention to go more into long haul ops against the likes of Virgin and BA., they have seen the draconian increase in UK APD and the effect on long haul yields. Put simply, they no longer believe a charter carrier can make money on long haul flying with a token Economy+ cabin up front. Customers who can routinely afford J or F tickets, they believe, are more immune to the APD hikes than Mum, Dad + 2 kids going to Orlando. They see the future long haul market as being left to the traditional 3 or 4 class carriers and the high density charters; no middle ground.

Are they right? Time will tell.

On the plus side, if their view of the market is correct, they have avoided taking on a new fleet superfluous to their needs.

Additionally,

Quoting Flyhi (Reply 22):
This will not affect in any way Monarch Airline Engineering's award of the Boeing Goldcare package. They remain committed to line and base capability from early 2012. Monarch already support Boeing 737, 757, 767 and 777 aircraft whilst the airline currently operates only one of the above. I am sure the Thomson aircraft will keep them more than busy.

  

I had been led to believe that part of the cancellation was to include a rolling over of the A320s (NOT the A321s) for B738s. Since then, in a final twist, Boeing has surprised the airlines as well as a.net with their decision to go with the MAX after all. I understand that, from Monarch's point of view, the figures and statistics "just don't add up" against the A320neo, and that going over to Boeing is now no longer part of the cancellation deal. How this pans out is anyone's guess, but my gut feeling tells me there must be new Boeing frames in the deal somewhere.

Edited to insert. Perhaps this is a reason:

http://news.airwise.com/story/view/1315351228.html

Adding backing to that feeling is that I am also told of major co-operation in the future with Globalia, Spain's largest tourist group, which does indeed own Air Europa. In a weak market, I see huge synergies between the two companies and associated benefits; could we see the A332's repainted in Air Europa's colours at UK airports and some Air Europa B738s in Monarch colours to open up new routes and take over the routes to the UK AIr Europa have flown in the past?

Interesting times ahead for Monarch, but I do believe it will be for the good.

Rgds

[Edited 2011-09-07 02:42:56]

[Edited 2011-09-07 03:00:02]

[Edited 2011-09-07 03:02:43]
So I drive a 4x4. So what?! Tax the a$$ off me for it...oh, you already have... :-(
 
flyhi
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RE: Monarch Cancels 787

Wed Sep 07, 2011 10:50 am

Quoting airbuseric (Reply 31):
Let's hope the available slots can be taken over by TUI group. Dutch company ArkeFly (part of TUI) is looking for more 787's according the ongoing rumours.

Rumour has it that a pilot at Monarch last week revealed an e-mail from a friend at BA that they had taken the slots. Just what I heard.

Quoting blueshamu330s (Reply 32):
Boeing's inability to deliver on time has cost Monarch dearly in rescheduling, renegotiating leases on already old frames, and on sub-leasing.

Not quite sure about that. No doubt it has been something of a ball ache for Monarch, but the 787's were always intended to replace existing aircraft, namely the A306's. Monarch own these aircraft and I believe the compensation that Boeing coughed up as a result of the delay on the 787 paid for the heavy maintenance checks on the A306's that were due, to keep them going a little longer until the expected delivery of the 787. As far as I am aware, Monarch have never sub leased for any other reason than to cover every day tech problems that might have occurred anyway. The B767 leased from Thomas Cook went back when the lease expired.
 
GIANCAVIA
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RE: Monarch Cancels 787

Wed Sep 07, 2011 10:50 am

Cant think of alot of Carriers like Monarch who do what they do and have been stable for so long at doing it while also growing. I think they know their stuff.

Ordering 787's in the first place was the actual mistake, On another note were Monarch not going to build a 787 specific hangar to act as a European center up at Manchester? Also to service Thomsons 787's? Guess that will change now.
 
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frigatebird
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RE: Monarch Cancels 787

Wed Sep 07, 2011 11:09 am

Quoting Viscount724 (Reply 14):
With 4 months to go, I think 787 net orders for 2011 stand at minus 26 (no new orders and 26 cancellations). A quick check of Boeing's orders/deliveries data shows that this is almost unprecedented.

The only examples I could find where a major Boeing type went an entire calendar year with no new orders were 1994 when the 777 had no orders (the year before it went into service), and 2002 when the 757 had no orders (the year before its final 7 orders before production ceased).

Last year wasn't exactly an order bonanza for the 787 either. But may I remind you that the end of the year is still 4 months away, and there is for example a big AF/KL 787 order due this month (and A350's).

The past few years airlines have been very hesitant ordering new aircraft types. Not just the 787, but A350, C-series and MRJ haven't fared too well either. OTOH, 77W, A330, A320, 737... plenty of orders. I guess once Boeing has the 787 production line in full working order and can guarantee delivery times, 787 sales will pick up again.
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gilesdavies
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RE: Monarch Cancels 787

Wed Sep 07, 2011 12:05 pm

Quoting Giancavia (Reply 34):
On another note were Monarch not going to build a 787 specific hangar to act as a European center up at Manchester? Also to service Thomsons 787's? Guess that will change now.

It might still happen...

Monarch Engineering, is strictly speaking not part of the airline and was spun off a number of years ago as a separate company. Among the industry they are world renowned, and sure they will find other customers to support for the 787, the airlines own six aircraft (if they had arrived) were barely going to keep that busy!

They currently support the A300, A310, A320 family, A330, 737CG, 737NG, 757, 767 and 777. The airline has only operated a fraction of these aircraft types, so obviously they will be able to use their reputation to gain new customers.

If you read through their list of clients, in their news stories, its very impressive.
 
GIANCAVIA
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RE: Monarch Cancels 787

Wed Sep 07, 2011 12:50 pm

Quoting gilesdavies (Reply 27):
It might still happen...

Monarch Engineering, is strictly speaking not part of the airline and was spun off a number of years ago as a separate company. Among the industry they are world renowned, and sure they will find other customers to support for the 787, the airlines own six aircraft (if they had arrived) were barely going to keep that busy!

They currently support the A300, A310, A320 family, A330, 737CG, 737NG, 757, 767 and 777. The airline has only operated a fraction of these aircraft types, so obviously they will be able to use their reputation to gain new customers.

If you read through their list of clients, in their news stories, its very impressive.

I hear you, Ive lived near the hangar churning through Continental 757s/Fedex Airbus etc etc for the last 15 yrs but I am intrigued to whether or not they plan to continue with the 787 engineering or not.
 
planesailing
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RE: Monarch Cancels 787

Wed Sep 07, 2011 3:00 pm

Quoting Flyhi (Reply 9):
There are still a few charters where the tour operator charters the full plane instead of a selected number of seats. In fact Monarch have said that in the future they intend only to charter flights on this basis only and not amongst shared operators. The benefit to tour operators is that they are not left trying to sell off seats for a penny when they are unable to sell all the seats on the plane (something that charterers have been doing for a long time and the general public got wise to, thus resulting in high volume last minute bookings denting the profits of travel companies and the operators who sold them). I would imagine that remaining stock could be sold by the airline at the prices published on their website. This way Monarch is more in control of its volumes and able to recognize demand.

That sounds like a very poor business decision, to sell off the seats last minute at close to nothing. I understand the business logic in it, and know that it goes on, so you fill the aircraft, but this is precisely why the likes of Easyjet sell seats at the airport for the going rate. It is to ensure people book early and that it does not damage their yeild. Surely a single tour operator chartered aircraft represents the same problem if similar pricing decisions are made? All customers will go last minute, when the aircraft has been booked, but the load factor is low and the tour operator is desperate to fill. The only difference being that the business risk is much greater on one tour operator?

Quoting blueshamu330s (Reply 23):
By now, Monarch should have had at least 18 months' experience with their Dreamliners. I brought it to this board's attention before it went public when the delay was extended a third time to Q1 or Q2 2013. Boeing's inability to deliver on time has cost Monarch dearly in rescheduling, renegotiating leases on already old frames, and on sub-leasing. Since Monarch announced previously their intention to go more into long haul ops against the likes of Virgin and BA., they have seen the draconian increase in UK APD and the effect on long haul yields. Put simply, they no longer believe a charter carrier can make money on long haul flying with a token Economy+ cabin up front. Customers who can routinely afford J or F tickets, they believe, are more immune to the APD hikes than Mum, Dad + 2 kids going to Orlando. They see the future long haul market as being left to the traditional 3 or 4 class carriers and the high density charters; no middle ground.

BA and VS do well with 3/4 class layouts. However, as far as I am aware, that are no traditional charter aircraft departing LGW at present in a full Y layout. TOM, TCX, TS, SWG all have some for of premium/economy+ product at the front of their aircrafts and they all continue to fly the routes.
 
BlueShamu330s
Posts: 2565
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RE: Monarch Cancels 787

Wed Sep 07, 2011 3:19 pm

Quoting planesailing (Reply 29):
BA and VS do well with 3/4 class layouts. However, as far as I am aware, that are no traditional charter aircraft departing LGW at present in a full Y layout. TOM, TCX, TS, SWG all have some for of premium/economy+ product at the front of their aircrafts and they all continue to fly the routes.

Tui and Thomas Cook are both on record as saying they are seriously considering scrapping Premium seating due to UK APD.

Quote: "Thomas Cook Airlines' Premium cabin has been put into the same tax bracket as business or first class by the UK government, meaning that it attracts the same rate of Air Passenger Duty, i.e. £120 on a flight to the US and £170 on Caribbean services.

Consequently, Thomas Cook has stopped offering Premium class on flights from the UK, but will offer it for a £50 upgrade option on the return to the UK, when APD does not apply. Your £50 buys you the two inches of extra legroom. "


Also: http://www.telegraph.co.uk/finance/n...pper-airlines-premium-economy.html

Rgds

[Edited 2011-09-07 08:23:24]
So I drive a 4x4. So what?! Tax the a$$ off me for it...oh, you already have... :-(
 
planesailing
Posts: 563
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RE: Monarch Cancels 787

Wed Sep 07, 2011 4:11 pm

Quoting blueshamu330s (Reply 30):
Tui and Thomas Cook are both on record as saying they are seriously considering scrapping Premium seating due to UK APD.

Quote: "Thomas Cook Airlines' Premium cabin has been put into the same tax bracket as business or first class by the UK government, meaning that it attracts the same rate of Air Passenger Duty, i.e. £120 on a flight to the US and £170 on Caribbean services.

Consequently, Thomas Cook has stopped offering Premium class on flights from the UK, but will offer it for a £50 upgrade option on the return to the UK, when APD does not apply. Your £50 buys you the two inches of extra legroom. "

Also: http://www.telegraph.co.uk/finance/n...pper-airlines-premium-economy.html

Rgds

The APD legislation is quite clear. In the case of two class aircraft, "Passengers occupying premium seats/cabin = appropriate standard rate. Other passengers, in the lowest class of travel = appropriate reduced rate unless the seat pitch exceeds 1.016 metres (40 inches) in which case the standard rate applies."

Therefore, everyone in economy is not penalised because of the premium cabin, they all pay the reduced rate, which is the same whether the aircraft is a one class or a two class. TCX still have the premium seats onboard the aircraft (hence offering them as an inbound upgrade), so why not still sell them as premium? The APD is only applicable if someone has paid for the seat as an extra. Liability for the tax is removed if passengers are selected to sit in the seats 1. on a first come first served basis or because they 2. buy additional services on board unconnected with premium seats, such as book an emergency exit seat or buy a bottle of champagne 3. were the earliest to book or
4. are on a package holiday.

Therefore on a full booked outbound flight, TCX is losing out. The APD is not their liability, it is a seated passengers and therefore it costs them no more. However, the revenue impacts against the operating costs of the aircraft. If a premium seat sells for even £100 more (so £185 inc the extra APD liability), that is £100 onto the revenue of the flight over £0. I think it may well be down to the types of routes TCX flies and the clientle that travel with them are not interested in premium seating.

In the case of TOM, the present aircraft have 9 rows of 36" premium seating. Economy is sat at 33". If you changed the front cabin to 33", you will still end up with 9 rows and 27" left over, so there is no benefit between 33 over 36, when the revenue you can generate from the premium seats is beneficial to the bottom line.

However, one thing I do not understand is that at the airport, TOM sell premium seats as BOGOF for £120. An economy passenger has already paid £85 APD and the premium seat is £170 APD. Therefore £85 is now required for the right APD to be paid on departure. However, £120 BOGOF is £60 each, so they are losing £25 on each seat? Or are airport upgrades exempt, though I cannot see that in the legislation.
 
trintocan
Posts: 2728
Joined: Sun Apr 23, 2000 6:02 pm

RE: Monarch Cancels 787

Wed Sep 07, 2011 10:40 pm

Well it is a shame to see a UK operator pull out of the 787, especially one as established as ZB but perhaps the shifting sands of the market have made it necessary. I think the rise in APD hasd had a lot to do with it.

On another front....

Quoting planesailing (Reply 29):
That sounds like a very poor business decision, to sell off the seats last minute at close to nothing. I understand the business logic in it, and know that it goes on, so you fill the aircraft, but this is precisely why the likes of Easyjet sell seats at the airport for the going rate. It is to ensure people book early and that it does not damage their yeild. Surely a single tour operator chartered aircraft represents the same problem if similar pricing decisions are made? All customers will go last minute, when the aircraft has been booked, but the load factor is low and the tour operator is desperate to fill. The only difference being that the business risk is much greater on one tour operator?

I think the point to remember is that U2 can act differently from the charters because their routes allow them to do so. U2 serve many routes linking major business destinations (eg LGW - MAD, LGW - BCN, LGW - FCO and so on) so that in many instances they would find walk-up or last-minute passengers prepared to pay more than usual to fly U2 rather than perhaps a still higher fare at BA. The major airlines like BA also price in this way. The routes frequented by charter airlines do not have this type of traffic and invariably, if the loads are low, selling the seats off cheaply is the only way of shifting them at all. For instance, if an airline served CWL - PMI in the off-season and found seats available on the plane on a particular day, raising the costs would ensure they went empty! Put another way, the holiday market is even more price-sensitive than the markets U2 target these days.

Trintocan.
Hop to it, fly for life!
 
gilesdavies
Posts: 2274
Joined: Tue Dec 02, 2003 7:51 pm

RE: Monarch Cancels 787

Thu Sep 08, 2011 10:18 am

Quoting blueshamu330s (Reply 30):

Quoting planesailing (Reply 29):
BA and VS do well with 3/4 class layouts. However, as far as I am aware, that are no traditional charter aircraft departing LGW at present in a full Y layout. TOM, TCX, TS, SWG all have some for of premium/economy+ product at the front of their aircrafts and they all continue to fly the routes.

Tui and Thomas Cook are both on record as saying they are seriously considering scrapping Premium seating due to UK APD.

Quote: "Thomas Cook Airlines' Premium cabin has been put into the same tax bracket as business or first class by the UK government, meaning that it attracts the same rate of Air Passenger Duty, i.e. £120 on a flight to the US and £170 on Caribbean services.

Consequently, Thomas Cook has stopped offering Premium class on flights from the UK, but will offer it for a £50 upgrade option on the return to the UK, when APD does not apply. Your £50 buys you the two inches of extra legroom. "

Today it seems TCX have gone one step further and reduced their long haul fleet, by nearly half!

Thomas Cook (UK) - Major Cuts To Long Haul Fleet (by gilesdavies Sep 8 2011 in Civil Aviation)