olddominion727
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HP 747's To Japan And Hawaii

Wed Jul 18, 2012 10:49 pm

I was returning home to PHX yesterday and was thinking about the different carriers that have had prominent service in PHX. First off, I know the HP 747's were leased to HP from KL. But in retrospect.Would it not have been better to keep the gas guzzlers and use them on a route where the aircraft could've received more of premium dividend like Brazil or Israel? Would it not be better for US (HP) to pick up some refurbished 744's or stretch it out for a few new 748's especially if the merger with AA goes through? But wouldn't they want a flagship airline with a flagship aircraft, offering flagship service. I know that the 77W is nice (if a merger happens) but a 747 could really be used to a 'major' city in Japan (not NGO), Brazil, or Israel a lot better, I would think.
 
jfk777
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RE: HP 747's To Japan And Hawaii

Wed Jul 18, 2012 11:55 pm

Quoting olddominion727 (Thread starter):
happens) but a 747 could really be used to a 'major' city in Japan (not NGO), Brazil, or Israel a lot better, I would think.

How was America West going to make Phoenix to Sao Paulo or Tel Aviv work ? Nonstop to Europe would have been better. LGW would have been great from PHX.
 
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RWA380
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RE: HP 747's To Japan And Hawaii

Thu Jul 19, 2012 1:35 pm

Quoting olddominion727 (Thread starter):
But in retrospect.Would it not have been better to keep the gas guzzlers and use them on a route where the aircraft could've received more of premium dividend like Brazil or Israel?
Quoting olddominion727 (Thread starter):
but a 747 could really be used to a 'major' city in Japan (not NGO), Brazil, or Israel a lot better, I would think

When HP asked for a Japan route authority, they asked for NRT and got NGO, the Hawaii flight were already operating with their 747's from KLM, I remember seeing the oven doors with the KLM logo on 'em. Those 747's almost killed HP, the flights to Hawaii were full a lot, but the yields were low, it was hard to convince people to connect in PHX to go to Hawaii, but the long flights between HNL & NGO were about as empty as could be, a dozen passenegrs was not unheard of. After the NGO operation failed, the 747's were flown to JFK for a while, but later let go out of the fleet, they were too much plane for HP. HP never went after long overseas routes again. Brazil or Israel would never have worked from PHX, maybe LGW would have been an option for HP to use those 747's on, but they would have to have gone through the hoops to get another expensive overseas operation going, and the sting from NGO was too fresh, and the losses many.
Next Flights: PDX-HNL-OGG-LIH-PDX On AS, WP & HA
 
aztrainer
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RE: HP 747's To Japan And Hawaii

Thu Jul 19, 2012 5:12 pm

When HP took the 747 it was a huge step as well as a gamble. The PHX to HNL was filled, but as other stated the traffic to HNL - NGO and PHX - NGO was not there. I have a neighbor that worked for HP at the time and took the flight. He stated that the HNL-NGO was so empty that many people had whole rows to themselves.

I believe that the 747's that they got from KL were huge gas guzzlers and they realized that they could not justify the expense. While this established the Phoenix to Hawai'i market, it also proved that a 747 was not the correct plane to use.
 
stapleton
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RE: HP 747's To Japan And Hawaii

Thu Jul 19, 2012 7:18 pm

There was also another factor going on at the time that would have impacted other international service as well, the Gulf War. Sometimes, timing is completely against you and combine that with an aircraft that gobbles up a lot of money quickly, it is a recipe for financial disaster.
 
citationjet
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RE: HP 747's To Japan And Hawaii

Thu Jul 19, 2012 9:09 pm

Quoting aztrainer (Reply 3):
He stated that the HNL-NGO was so empty that many people had whole rows to themselves.

"Beauvais, continuing the Asian strategy, pursued a route application to Tokyo which was not approved. Honolulu was designated a hub, and the Bird of Paradise service was instead extended to Nagoya on February 27. Nagoya, instead of leading passengers into the "Heart of Japan", would prove to be the breaking point for America West. The route proved to be a money-loser, with the first flight carrying one passenger to Nagoya, leading to an almost immediate service reduction to three weekly flights (from daily)."

http://www.psa-history.org/awa/history.html

.
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catiii
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RE: HP 747's To Japan And Hawaii

Thu Jul 19, 2012 9:15 pm

Quoting olddominion727 (Thread starter):
I know that the 77W is nice (if a merger happens) but a 747 could really be used to a 'major' city in Japan (not NGO), Brazil, or Israel a lot better, I would think.

So your argument is that, given their already failed history out of PHX with the 747, they should go buy used 744's and create a subfleet purely for the purpose of serving Brazil and Israel out of Phoenix?
 
cedarjet
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RE: HP 747's To Japan And Hawaii

Thu Jul 19, 2012 11:12 pm

Quoting olddominion727 (Thread starter):
a route where the aircraft could've received more of premium dividend like Brazil or Israel?

Brazil is OK for yield, but not spectacular and certainly not from Arizona. Israel is one of the lowest-yield markets in the world. Premium dividend? The total opposite. Japan is premium, but it would have taken a long time to get market share from monolithic incumbents like JAL and United. And it was never gonna happen at Nagoya. When Narita didn't happen they should have paid cancellation penalties and sent the 747s back to Holland. (And not via Tel Aviv.)
fly Saha Air 707s daily from Tehran's downtown Mehrabad to Mashhad, Kish Island and Ahwaz
 
aztrainer
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RE: HP 747's To Japan And Hawaii

Fri Jul 20, 2012 4:31 am

Quoting CitationJet (Reply 5):
"Beauvais, continuing the Asian strategy, pursued a route application to Tokyo which was not approved. Honolulu was designated a hub, and the Bird of Paradise service was instead extended to Nagoya on February 27. Nagoya, instead of leading passengers into the "Heart of Japan", would prove to be the breaking point for America West. The route proved to be a money-loser, with the first flight carrying one passenger to Nagoya, leading to an almost immediate service reduction to three weekly flights (from daily)."

I remember reading/hearing about that. One passenger on board OUCH!!!!!
 
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hOMSaR
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RE: HP 747's To Japan And Hawaii

Fri Jul 20, 2012 4:45 am

Is this another one of those "airline X needs 747s just because" threads?
The plural of Airbus is Airbuses. Airbii is not a word, and doesn't even make sense.
 
N501US
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RE: HP 747's To Japan And Hawaii

Fri Jul 20, 2012 1:33 pm

As I recall, HP started HNL as a way to beef up its FF program by providing an exotic destimation. Low yields followed!
Fools and thieves are well disguised in the temple and the marketplace.....
 
klwright69
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RE: HP 747's To Japan And Hawaii

Fri Jul 20, 2012 1:52 pm

I wonder how much HP really thought out that move to Japan. Did they do any research, it sounded like prestige only.
Huge airframes like the 747 can be a real drag if they are not full all the time all year round. Management should have known this. A dumb move for a young airline going against industry titans on long haul.

747 to HNL was not a bad idea, although not a great one. LGW may have been viable also. That's it. Brazil and Isreal? No way, not from PHX.
 
flyguy89
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RE: HP 747's To Japan And Hawaii

Fri Jul 20, 2012 4:20 pm

Quoting cedarjet (Reply 7):
Israel is one of the lowest-yield markets in the world.

I don't really understand this assertion seeing as TLV is a top-performer for many airlines. US's PHL-TLV has been extremely successful, UA/CO also do very well to Israel operating to TLV twice daily in the high-season with DL also adding additional frequencies on-top of it's daily schedule from NYC and also using the 744...if TLV/Israel have such trash yields then why does it continue to perform so well for so many airlines?
 
catiii
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RE: HP 747's To Japan And Hawaii

Fri Jul 20, 2012 7:57 pm

Quoting flyguy89 (Reply 12):
if TLV/Israel have such trash yields then why does it continue to perform so well for so many airlines?

It doesn't necessarily. DL got out of it from ATL because the yields were junk and the feed wasn't there. NYC and PHL sustain a significant O/D market plus feed. Makes it a little more worthwhile, but all those Birthright trips etc aren't exactly big time business $$.
 
aztrainer
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RE: HP 747's To Japan And Hawaii

Fri Jul 20, 2012 8:40 pm

Quoting klwright69 (Reply 11):
I wonder how much HP really thought out that move to Japan. Did they do any research, it sounded like prestige only.
Huge airframes like the 747 can be a real drag if they are not full all the time all year round. Management should have known this. A dumb move for a young airline going against industry titans on long haul.

747 to HNL was not a bad idea, although not a great one. LGW may have been viable also. That's it. Brazil and Isreal? No way, not from PHX.

It was a very egocentric driven idea. HP was a mostly western US airlines with a good local reputation. They were having good profits and were showing profits. They thought that there was a desire to fly to the east. I think PHX-HNL was a good idea (as has been proven buy the PHX-HNL, OGG, LIH and KON) but with the wrong A/C.

The Japanese extension was simply moronic.

They saw the 747 as a prestige move and wanted to be like the legacy's and not what made them successful. IMHO
 
LAXintl
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RE: HP 747's To Japan And Hawaii

Fri Jul 20, 2012 10:25 pm

Anyone remember HP also put an order in for B744s? (2+2 option)

Also they had stated they intended to run an Australia route.

Quoting klwright69 (Reply 11):
I wonder how much HP really thought out that move to Japan. Did they do any research, it sounded like prestige only.

Well there was new traffic rights available, so as many US carriers they pursued it.


The concept was not that bad - they did not intend to fly pax from Phoenix or Vegas to Japan, but instead wanted to maximize each segment. The PHX/LAS-HNL loads as mentioned were excellent, and they wanted to sell Hawaii-Japan seperately. For whatever reason even with massive Japan-Hawaii traffic they were not able to capitalize on it and make the flight work.

To show how well Hawaii was for HP, after the 747s were withdrawn in late 1991, they leased in ATA L-1011 which operated as a HP flight for another 2 years in a 2-class configuration.
From the desert to the sea, to all of Southern California
 
aztrainer
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RE: HP 747's To Japan And Hawaii

Fri Jul 20, 2012 11:54 pm

Quoting LAXintl (Reply 15):
Anyone remember HP also put an order in for B744s? (2+2 option)

Yep, they thought that they were more efficient than the 200 and would be better for HP

Quoting LAXintl (Reply 15):
For whatever reason even with massive Japan-Hawaii traffic they were not able to capitalize on it and make the flight work.

I am wondering how much of that was the fact that most Japaneses did not know HP and may of not trusted HP with their travel dollars.
 
flyguy89
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RE: HP 747's To Japan And Hawaii

Sat Jul 21, 2012 3:54 am

Quoting catiii (Reply 13):
DL got out of it from ATL because the yields were junk and the feed wasn't there.

To be fair, DL has cut a lot of TATL flying from ATL lately.

Quoting catiii (Reply 13):
Makes it a little more worthwhile, but all those Birthright trips etc aren't exactly big time business $$.

Oh for sure, but double daily frequencies from both UA and DL is still quite a dedication to the market, TLV/Israel must have at least some decent yields to make such capacity warranted and as such, without numbers it just seems a little over dramatic for me the assertion that Israel is one of the lowest-yielding markets in the world.
 
sccutler
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RE: HP 747's To Japan And Hawaii

Sat Jul 21, 2012 4:24 am

Quoting LAXintl (Reply 15):
Also they had stated they intended to run an Australia route.

...which makes sense if You recall that, way back when, Ansett had a stake in HP...

...seems amazing in hindsight!

[Edited 2012-07-20 21:25:10]
...three miles from BRONS, clear for the ILS one five approach...
 
cedarjet
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RE: HP 747's To Japan And Hawaii

Sat Jul 21, 2012 9:14 pm

Quoting flyguy89 (Reply 12):
I don't really understand this assertion seeing as TLV is a top-performer for many airlines.

It's not a "top performer" at all - Lufty are pulling back and Swiss too I think.

Quoting flyguy89 (Reply 12):
US's PHL-TLV has been extremely successful, UA/CO also do very well to Israel operating to TLV twice daily in the high-season with DL also adding additional frequencies on-top of it's daily schedule from NYC and also using the 744...

Look, if USAirways makes $146,000 profit a year serving TLV, you'd think, success! But not really. That's a profit of exactly one dollar on each passenger they fly each way, a margin of way less than 1%, closer to 0.1% actually. If it soaks up an aircraft and creates additional scale which creates more efficiency for the network overall and doesn't cost the airline to serve, maybe it's worth keeping. But it ain't "extremely successful".

"Extremely successful" is BA serving Lagos, where they charge $1,500 return in eco for a five hour flight, and there's lots of full fare business class traffic that pays thousands and thousands of dollars for a ticket, and the profit margin is hundreds of dollars per head. Or the Concorde, when the break-even was a load factor of 50%, and the ticket was $5,000 one way, so 50x $5,000 covered the operating cost ($250,000) and the other 50x $5,000 was pure profit (when it was full, which was often), = $250,000 profit. Per flight. Each way. Tel Aviv may wash it's face but it doesn't help airline accountants sleep at night or pay for their kids' horse riding lessons.
fly Saha Air 707s daily from Tehran's downtown Mehrabad to Mashhad, Kish Island and Ahwaz
 
flyguy89
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RE: HP 747's To Japan And Hawaii

Sat Jul 21, 2012 9:44 pm

Quoting cedarjet (Reply 19):
Quoting flyguy89 (Reply 12):
I don't really understand this assertion seeing as TLV is a top-performer for many airlines.

It's not a "top performer" at all - Lufty are pulling back and Swiss too I think.

Perhaps it's not the best performer for them, I'll concede that.

Quoting cedarjet (Reply 19):

Look, if USAirways makes $146,000 profit a year serving TLV, you'd think, success!

But it's not me making that assertion, US themselves have indicated that the route is a very strong performer. Perhaps Europe-Israel isn't very strong, but with all the additional capacity, up-gauges, and strong performances from US carriers, I would think that US-Israel has to be at least a decent yielding market.
 
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RWA380
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RE: HP 747's To Japan And Hawaii

Wed Jul 25, 2012 10:27 am

Of all the grand entries made by a then fledgling carrier, HP's 747's may take the cake as the most financially disastrous in airline history, where the carrier ended up surviving, because they pulled the plug before it dragged the whole carrier into the swirling drain they were going towards.
Next Flights: PDX-HNL-OGG-LIH-PDX On AS, WP & HA
 
SurfandSnow
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RE: HP 747's To Japan And Hawaii

Wed Jul 25, 2012 11:18 am

Quoting RWA380 (Reply 21):
Of all the grand entries made by a then fledgling carrier, HP's 747's may take the cake as the most financially disastrous in airline history

No no, that honor goes to the folks running DH (Atlantic Coast Airlines, rebranded as Independence Air when they suddenly morphed from a regional contract carrier to an independent LCC), who managed to fail during a time of low fuel prices and great economic conditions by taking on much larger aircraft and longer routes than they were familiar with, all while taking on costly new aircraft. Here was an airline that came out of nowhere, grabbing the public's attention with loss leader fares while attempting to take on a former partner's fortress hub. UA not only knew all about DH's costs, routes, and revenue but also had the means to quickly mount a devastating competitive response.

As for HP, they were actually an established carrier that was enjoying rapid growth by hubbing in the Sunbelt, capitalizing on the major growth of its PHX and LAS hub markets. Lest we not forget that during the planning stages, Japan's economic growth was the envy of the world - the country appeared to be a gold mine. By the time the service actually started, the Japanese economic bubble had burst, and the Gulf War had decreased demand while increasing fuel prices. Not to mention the fact that 742s were rapidly becoming obsolete, and far too big for the routes they were purchased for. Had HP pursued 767s or even DC-10s or L-1011s, I suspect the outcome may have been somewhat different. A comparison with which we could all relate might be B6 in the mid-2000s, leasing aging AA A300s for transatlantic expansion from BOS/JFK.

Obviously HP learned a hard lesson, and made the right choice by quickly dumping the 747s and investing in state of the art A32X narrowbodies with appropriate capacity for their routes and hub markets. They would have been doomed if they had kept the 747s as you suggested. Ultimately the airline was finally able to offer intercontinental service by buying out US Airways, an established carrier with a successful track record in the transatlantic realm. I daresay the experience from the 747s has not been forgotten, which is why even today US has been highly reluctant to enter the Asian market. They certainly don't want history to repeat itself.
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HPRamper
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RE: HP 747's To Japan And Hawaii

Wed Jul 25, 2012 4:12 pm

Quoting flyguy89 (Reply 12):
I don't really understand this assertion seeing as TLV is a top-performer for many airlines. US's PHL-TLV has been extremely successful, UA/CO also do very well to Israel operating to TLV twice daily in the high-season with DL also adding additional frequencies on-top of it's daily schedule from NYC and also using the 744...if TLV/Israel have such trash yields then why does it continue to perform so well for so many airlines?

US has stated PHL-TLV is its most profitable international route on a singular-flight basis. It can indeed make money even if the business traffic is not there.

Quoting LAXintl (Reply 15):
To show how well Hawaii was for HP, after the 747s were withdrawn in late 1991, they leased in ATA L-1011 which operated as a HP flight for another 2 years in a 2-class configuration.

And part of the reason why there was speculation for many years about HP merging with HA (until the US buyout).
 
FX1816
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RE: HP 747's To Japan And Hawaii

Wed Jul 25, 2012 4:18 pm

Quoting SurfandSnow (Reply 22):
No no, that honor goes to the folks running DH (Atlantic Coast Airlines, rebranded as Independence Air when they suddenly morphed from a regional contract carrier to an independent LCC),

If I remember correctly they didn't have much a choice because UA wasn't going to be giving them a contract extension so they had very little choice. Now the choices they made after that weren't necessarily smart.

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