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readytotaxi
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Fuel Cost Question. A346 V B777

Sun Feb 27, 2011 5:04 pm

Looking at Flightradar24.com I see that BA & Virgin are flying to EWR from LHR.
Ba use B777 and Virgin an A346, assume they both fly the same flight plan will the Virgin plane have the higher fuel bill because of the four engines?
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SEPilot
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RE: Fuel Cost Question. A346 V B777

Sun Feb 27, 2011 6:20 pm

Yes; I believe the difference will be on the order of 10%.
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readytotaxi
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RE: Fuel Cost Question. A346 V B777

Sun Feb 27, 2011 6:41 pm

Quoting SEPilot (Reply 1):

WOW, heck of a big margin over a year.  
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RE: Fuel Cost Question. A346 V B777

Sun Feb 27, 2011 6:54 pm

Quoting readytotaxi (Reply 2):

WOW, heck of a big margin over a year.

That's why the 77W has essentially killed off the A346.
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Stitch
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RE: Fuel Cost Question. A346 V B777

Mon Feb 28, 2011 9:43 pm

zeke provided fuel burn figures for CX's A340-600 and 777-300ER as follows:

777-300ER: 8,100kg per hour
A340-600: 8,900kg per hour

So the A340-600 burned about 10% more fuel per hour.
 
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RE: Fuel Cost Question. A346 V B777

Tue Mar 01, 2011 12:24 am

Quoting Stitch (Reply 4):
zeke provided fuel burn figures for CX's A340-600 and 777-300ER as follows:

777-300ER: 8,100kg per hour
A340-600: 8,900kg per hour

So the A340-600 burned about 10% more fuel per hour.

...and thats just fuel, not even the additional maintenance costs for 4 engines vs 2
 
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RE: Fuel Cost Question. A346 V B777

Tue Mar 01, 2011 1:07 am

Quoting CX Flyboy (Reply 5):

...and thats just fuel, not even the additional maintenance costs for 4 engines vs 2

However, from what I understand, the GE90-115's are about the most expensive engines to maintain. Presumably the A346 engines are less expensive, although probably more than half as much.
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RE: Fuel Cost Question. A346 V B777

Tue Mar 01, 2011 1:21 am

Two factors to consider:
- I believe the 346 costs less to purchase/lease than the 777.
- If an airline needs the aircraft soon, and can get a 346 in six months or a 773ER in 5 years, it makes sense to get the 346 despite the higher operating cost. The 773ER may be more efficient but the 346 is way better than no aircraft at all.
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RE: Fuel Cost Question. A346 V B777

Tue Mar 01, 2011 7:44 am

Current average list for an A340-600 is $264 million, which is about $20 million less than the average list of a 777-300ER.

In terms of lease rates, you're looking about $930,000 per month for a brand new A340-600 and about $1.7 million a month for a brand new 777-300ER..
 
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RE: Fuel Cost Question. A346 V B777

Tue Mar 01, 2011 1:54 pm

Quoting Stitch (Reply 8):
Current average list for an A340-600 is $264 million, which is about $20 million less than the average list of a 777-300ER.

In terms of lease rates, you're looking about $930,000 per month for a brand new A340-600 and about $1.7 million a month for a brand new 777-300ER..

$20 million price difference certainly does not begin to account for almost twice the lease price. That is staggering. And that $20 million savings will probably be eaten up in less than 1 year's fuel costs.
The problem with making things foolproof is that fools are so doggone ingenious...Dan Keebler
 
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RE: Fuel Cost Question. A346 V B777

Tue Mar 01, 2011 6:48 pm

Quoting SEPilot (Reply 9):
$20 million price difference certainly does not begin to account for almost twice the lease price.

I think it just shows that the list prices are virtually arbitrary and that no one actually pays the list prices...
 
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RE: Fuel Cost Question. A346 V B777

Tue Mar 01, 2011 8:28 pm

Quoting Starlionblue (Reply 7):
- If an airline needs the aircraft soon, and can get a 346 in six months or a 773ER in 5 years, it makes sense to get the 346 despite the higher operating cost. The 773ER may be more efficient but the 346 is way better than no aircraft at all.

As far as I know, no widebody plane is on a 6 month build plan. I believe they are all on 10-16 month build plans, which means with all the lead time items, an airline needs about a year to allow for their configuration to be produced. Also production slots are not usually firmed up until the 10-16 month cycle starts.

Quoting Stitch (Reply 8):

In terms of lease rates, you're looking about $930,000 per month for a brand new A340-600 and about $1.7 million a month for a brand new 777-300ER..

That seems like an unusually high difference. Also because there are so few A346 operators out there, lessors are going to be more careful with what airlines they work with and might demand higher rates or longer terms. They want a long term customer and not an airline interested in a plane for only 5-10 years. The second hand market would be really bad as it usually is for low production model planes like the A346, A346, and A318.
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RE: Fuel Cost Question. A346 V B777

Tue Mar 01, 2011 9:49 pm

Quoting mafi29 (Reply 10):

I think it just shows that the list prices are virtually arbitrary and that no one actually pays the list prices...

True, but I believe (with absolutely no supporting evidence whatsoever) that discounts are relatively consistent; if an airline gets 40% off plane A they will also get 40% off plane B. Launch discounts, we all know, are more, but I would suspect that after that they are subject to the usual haggling and will depend on how badly the manufacturer wants this particular deal, but they should be somewhat predictable.

Quoting RoseFlyer (Reply 11):
Quoting Stitch (Reply 8):

In terms of lease rates, you're looking about $930,000 per month for a brand new A340-600 and about $1.7 million a month for a brand new 777-300ER..

That seems like an unusually high difference. Also because there are so few A346 operators out there, lessors are going to be more careful with what airlines they work with and might demand higher rates or longer terms. They want a long term customer and not an airline interested in a plane for only 5-10 years. The second hand market would be really bad as it usually is for low production model planes like the A346, A346, and A318.

This puzzles me as well, as I commented before. But perhaps there have been no recent leases on A346's to compare with, compared to a lot for 777W's. What would be telling would be to see a lease quote for the two planes to the same customer. I would not be surprised to see different lease rates for different customers, depending on the creditworthiness of the customer and how they treat the planes. I cannot believe that the same leasing company would offer such vastly different lease rates to the same airline that was choosing between the A346 and 77W. If they did, the airline would likely choose the A346, which is not what I think the leasing company would want, as they will be stuck with it when the lease expires.
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RE: Fuel Cost Question. A346 V B777

Tue Mar 01, 2011 11:03 pm

Quoting RoseFlyer (Reply 11):
That seems like an unusually high difference.

I think it is just a reflection of how desirable the 777-300ER is and the A340-600 is not in the marketplace. Once the 77W entered service, A346 orders were almost all just top-ups to existing fleets.
 
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RE: Fuel Cost Question. A346 V B777

Tue Mar 01, 2011 11:59 pm

Quoting RoseFlyer (Reply 11):
Quoting Starlionblue (Reply 7):
- If an airline needs the aircraft soon, and can get a 346 in six months or a 773ER in 5 years, it makes sense to get the 346 despite the higher operating cost. The 773ER may be more efficient but the 346 is way better than no aircraft at all.

As far as I know, no widebody plane is on a 6 month build plan. I believe they are all on 10-16 month build plans, which means with all the lead time items, an airline needs about a year to allow for their configuration to be produced. Also production slots are not usually firmed up until the 10-16 month cycle starts.

Fair enough, but I was just taking figures out of thin air to make a point.

Quoting RoseFlyer (Reply 11):
They want a long term customer and not an airline interested in a plane for only 5-10 years.

I don't work in the industry, but I would think 5-10 years is plenty. CX kept their 346s way less than that.
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RE: Fuel Cost Question. A346 V B777

Wed Mar 02, 2011 2:56 pm

Quoting Stitch (Reply 13):
Quoting RoseFlyer (Reply 11):
That seems like an unusually high difference.

I think it is just a reflection of how desirable the 777-300ER is and the A340-600 is not in the marketplace.

The other possibility is that the lease prices reflect the impact of fuel burn on the total life of the lease. Combine the low lease price with the high fuel burn of the A340 you get the high lease price and lower fuel burn of the 777 over the life of the lease. So in the end those two numbers becomes competitive.

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RE: Fuel Cost Question. A346 V B777

Wed Mar 02, 2011 3:41 pm

Quoting bikerthai (Reply 15):
The other possibility is that the lease prices reflect the impact of fuel burn on the total life of the lease. Combine the low lease price with the high fuel burn of the A340 you get the high lease price and lower fuel burn of the 777 over the life of the lease. So in the end those two numbers becomes competitive.

What you are saying is that the lessors are playing the part of vultures. Fuel burn is of no consequence to them; they are interested in the price of the aircraft and its residual value at the end of the lease. What justification do they have for charging such outrageous prices, and why would an airline be willing to pay outlandish rates for a more fuel efficient aircraft just because they are saving money on fuel? I certainly wouldn't. And if this truly was the case, as I mentioned before, the A346 would be picking up sales because the difference in lease prices would make it competitive. But that is not happening. I fall back on my previous belief that we are comparing apples and pinecones; I think the A346 lease rates are several years old while the 77W lease rates are current. If someone wanted to lease a new A346 today I suspect the lease rate would be very close to the 77W.
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RE: Fuel Cost Question. A346 V B777

Wed Mar 02, 2011 4:45 pm

Quoting SEPilot (Reply 16):
playing the part of vultures

No - it is called free market. They charge what the customers will pay. If it the price is elastic, then if they lower it, volume will go up. If the price is inelastic - then they can afford to charge more without making a volume impact.
So - the lessors are setting the price at what they think will return best profit. It's not like they have a monopoly - or are holding a gun to their customers head to lease - obviously the customers have the choice of going A346.

Quoting SEPilot (Reply 16):
What justification do they have for charging such outrageous prices, and why would an airline be willing to pay outlandish rates for a more fuel efficient aircraft just because they are saving money on fuel?

The justification is the customers will pay the price. If the customers will not, then they (the lessors) can either go out of business or lower the price.

Quote:
I certainly wouldn't.

And that would be your choice. Nice to have that choice, isn't it. Given the course of US and world governments, - you may have not for long (either because it will be controlled, or you will have no money, so you can't, or policies will drive items out of reach of normal people.).

What is outrageous is that some think they should dictate the relationship between a customer and a buyer.    
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RE: Fuel Cost Question. A346 V B777

Wed Mar 02, 2011 4:53 pm

Quoting SEPilot (Reply 16):

It doesn't matter what the aircraft costs to buy but what it is worth. The leasing companies have already bought the A346 so I believe they would rather lease it at a lower rate than not lease it at all, the only way they can lease it is to make the total costs of the similar aircraft close to each other. Sounds like normal business to me.

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RE: Fuel Cost Question. A346 V B777

Wed Mar 02, 2011 6:59 pm

Quoting SEPilot (Reply 16):
why would an airline be willing to pay outlandish rates for a more fuel efficient aircraft just because they are saving money on fuel?

If the burn difference 500kgs an hour... and 400hrs a month... at $1 a kg, then that's already $200,000 a month difference.
If the maintenance per hour difference is $250 an hour, then it's $100,000 a month difference.
Go and figure...

But, cost is one side of the equation the airlines look at, the other is the revenue potential/expandability.

In the case of the 346 vs 773ER, the 773ER is likely to win hands down on cost, but on some parts of the operating envelope, the 346 may have a revenue potential advantage... I haven't checked the books on those so I can't say much other than "guess". That reduces the 773ER walkover...

And then, one could look into asset management support for each aircraft... and financing terms for lease purchases etc.

All those are probably going to reduce the differences between the 346 vs 773ER lease rates.

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RE: Fuel Cost Question. A346 V B777

Wed Mar 02, 2011 7:36 pm

Quoting rcair1 (Reply 17):

And that would be your choice. Nice to have that choice, isn't it. Given the course of US and world governments, - you may have not for long (either because it will be controlled, or you will have no money, so you can't, or policies will drive items out of reach of normal people.).

What is outrageous is that some think they should dictate the relationship between a customer and a buyer.

I agree with your statements in general-my point (perhaps poorly expressed) is that I cannot see how the free market would tolerate such vastly different lease prices for aircraft that had very close purchase prices under the same conditions. It is not that I think it should be controlled or regulated; I just do not see how the situation could arise, except as follows.

Quoting flipdewaf (Reply 18):
It doesn't matter what the aircraft costs to buy but what it is worth. The leasing companies have already bought the A346 so I believe they would rather lease it at a lower rate than not lease it at all, the only way they can lease it is to make the total costs of the similar aircraft close to each other. Sounds like normal business to me.

Yes; I certainly can see if a lessor already has the A346 that they would lease it out for what they could get. The situation I could not understand is how a lessor would lease out a brand new A346 for little more than half the lease rate that they would get for a brand new 77W. But if it is a second lease then we are again comparing apples to pinecones. What I would be interested what prices a lease company would quote to the same airline for a 77W or an A346 that was purchased new for them. I don't think there would be much difference.
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RE: Fuel Cost Question. A346 V B777

Wed Mar 02, 2011 7:51 pm

Quoting SEPilot (Reply 16):
What you are saying is that the lessors are playing the part of vultures. Fuel burn is of no consequence to them; they are interested in the price of the aircraft and its residual value at the end of the lease.

Lesser whether of cars or of airplanes, are out to maximize their profit.

What is not being clear here is whether the lease comparison was wet for one vs. dry for the other. Could that account for the difference?

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RE: Fuel Cost Question. A346 V B777

Wed Mar 02, 2011 8:33 pm

Quoting bikerthai (Reply 21):

Lesser whether of cars or of airplanes, are out to maximize their profit.

Granted. But I cannot see the market permitting the kind of price difference for a similarly priced plane with all other things being equal.

Quoting bikerthai (Reply 21):
What is not being clear here is whether the lease comparison was wet for one vs. dry for the other. Could that account for the difference?

Ask Stitch; he was the one who quoted the prices. But on looking back on his post, I see that he specified that both were brand new. That throws my previous post into a cocked hat, and renews my total lack of comprehension as to how this situation could exist.
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RE: Fuel Cost Question. A346 V B777

Wed Mar 02, 2011 9:00 pm

Quoting SEPilot (Reply 22):

I don't think that his specific situation could exist. If the 77W is that much better then the lessor would not purchase the A346 unless they had a customer who specifically required it over the 77W then the lease rate would be back up.

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RE: Fuel Cost Question. A346 V B777

Wed Mar 02, 2011 9:19 pm

Quoting flipdewaf (Reply 23):

I don't think that his specific situation could exist. If the 77W is that much better then the lessor would not purchase the A346 unless they had a customer who specifically required it over the 77W then the lease rate would be back up.

That's my opinion as well; my problem is that I have found Stitch to be usually pretty accurate. I have been endeavoring to find a scenario where his figures work, and have utterly failed. The only thing that comes close to making sense is that the A346 figures are old while the 77W figures are new, and even that doesn't add up.
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RE: Fuel Cost Question. A346 V B777

Wed Mar 02, 2011 9:52 pm

The prices are averages from the second half of 2010 and are all based on a dry lease. They come from Aircraft Value News, which is an industry trade that I am able to access via my public library (as the subscription price runs into the four figures).

It is possible, if not probable, that much of the difference is attributable to the GFC. The A380-800 and 777-300ER were the only two aircraft families to see their lease rates relatively unaffected during the Global Financial Crisis. Aircraft like the 737-800 and A320-200, who'd had their rates run to insane levels during the order boom of the mid-2000s, saw their lease rates collapse by 50% during the GFC. Even stalwarts like the A330-200 saw lease rates plummet by well over a third.

During those boom years, a 2004 A340-600 delivery could pull in over a million a month, not far behind what an initial delivery 777-300ER was going for. But now with oil climbing and with a limited number of airframes in service and no new orders likely, the available pool of customers interested in an A340-600 lease must be quite small and those customers would be the ones exercising the pricing power.
 
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RE: Fuel Cost Question. A346 V B777

Wed Mar 02, 2011 10:25 pm

Quoting SEPilot (Reply 9):
$20 million price difference certainly does not begin to account for almost twice the lease price. That is staggering. And that $20 million savings will probably be eaten up in less than 1 year's fuel costs.

If the 346 burned more than 20 millions $ more fuel per year than the 77W, I doubt there would be one still in the air ! Fortunately you didn't use mathematics to get to that conclusion.
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RE: Fuel Cost Question. A346 V B777

Wed Mar 02, 2011 10:32 pm

If acquisition cost and availability could sway customers away from more fuel efficient aircraft then we'd see a lot more Soviet era airliners gracing our skies than we do now.

-IR
 
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RE: Fuel Cost Question. A346 V B777

Wed Mar 02, 2011 11:47 pm

Quoting irelayer (Reply 27):
If acquisition cost and availability could sway customers away from more fuel efficient aircraft then we'd see a lot more Soviet era airliners gracing our skies than we do now.

Well, "there are limits" I guess. Also those airliners probably have "issues" when it comes to maintenance, standards and so forth. Not saying they are harder to maintain or less safe, just that if a western airline has maintained and operated Airbus and Boeing for decades, suddenly handling an Ilyushin might not be trivial.

And then you have to sell it to the customers... A colleague of mine was shocked to hear he had flown in on a plane made in Brazil... If I had said Russia he would probably have soiled himself.

[Edited 2011-03-02 15:48:19]
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hal9213
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RE: Fuel Cost Question. A346 V B777

Mon Mar 07, 2011 3:40 pm

Quoting Stitch (Reply 8):
In terms of lease rates, you're looking about $930,000 per month for a brand new A340-600 and about $1.7 million a month for a brand new 777-300ER..

That seems a bit too much. I have the figures for one particular 777-300ER from Emirates, who pays 1.216.000 dollars / month for a sold and leased back plane contracted for 10 years.
 
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RE: Fuel Cost Question. A346 V B777

Mon Mar 07, 2011 7:22 pm

Quoting hal9213 (Reply 29):
That seems a bit too much. I have the figures for one particular 777-300ER from Emirates, who pays 1.216.000 dollars / month for a sold and leased back plane contracted for 10 years.

EK is a huge 77W operator so if they're leasing a large number of frames from one company, they're likely getting a better deal than someone looking to take one or two frames.

And EK pays less for their 77Ws than just about anyone thanks to the number of orders. So a lessor buying a frame from EK is paying less than one buying direct from Boeing so the lease price would be lower.

Also, was that a 2H-2010 delivery?
 
hal9213
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RE: Fuel Cost Question. A346 V B777

Wed May 25, 2011 4:33 pm

Quoting Stitch (Reply 30):
EK is a huge 77W operator so if they're leasing a large number of frames from one company,

No, the particular figure I have is for exactly one lease-and-buyback contract for one aircraft, A6-ECQ. (Why am I saying "I have", you can actually google it, Dr Peters Fonds 133)
But true, EK bought the plane cheaper, thus sells it cheaper and thus leases it cheaper. Might make sense.
 
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RE: Fuel Cost Question. A346 V B777

Fri May 27, 2011 5:19 pm

Aircraft Commerce did a comparison of the 77W, A346, and 744 last fall using routes out of DXB flown on all three types to highlight the differences.

The best comparison here for a route was DXB-PER, as the conditions listed were basically identical for all three types. AC's conclusions:

A346:
Block fuel burn: 30,556 USG
Payload: 134,703 lbs.
Pax: 302
Cargo: 68,263 lbs.

Fuel burn lbs.-per-ton-mile: 0.71
Fuel burn per seat mile: 0.0210


B77W:
Block fuel burn: 29,535 USG
Payload: 140,395 lbs.
Pax: 327
Cargo: 68,455 lbs.

Fuel burn lbs.-per-ton-mile: 0.66
Fuel burn per seat mile: 0.0188

B744:
Block fuel burn: 37,847 USG
Payload: 165,300 lbs.
Pax: 369
Cargo: 84,120 lbs.

Fuel burn lbs.-per-ton-mile: 0.71
Fuel burn per seat mile: 0.0213

So in reality, the cost of operation in terms of fuel for the A346 is a bit lower than the 744, but the 744 will haul more revenue. While the cost of the 77W is 5-8% lower but it too hauls more people and about the same amount of cargo. AND you've got two fewer engines to worry about on mx.

Other routes compared in this test were DXB-ADL, DXB-SYD, DXB-NOU, DXB-AKL, DXB-SFO, DXB-LAX.

Quote:
They come from Aircraft Value News, which is an industry trade that I am able to access via my public library (as the subscription price runs into the four figures).

A good, accurate source and one of my favorite publications.
 
LAXDESI
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RE: Fuel Cost Question. A346 V B777

Fri May 27, 2011 6:24 pm

Quoting CargoLex (Reply 32):
A346:
Block fuel burn: 30,556 USG
Payload: 134,703 lbs.
Pax: 302
Cargo: 68,263 lbs.

Fuel burn lbs.-per-ton-mile: 0.71
Fuel burn per seat mile: 0.0210


B77W:
Block fuel burn: 29,535 USG
Payload: 140,395 lbs.
Pax: 327
Cargo: 68,455 lbs.

Fuel burn lbs.-per-ton-mile: 0.66
Fuel burn per seat mile: 0.0188

Thanks for sharing. For the above mission,

A346 burns nearly 1,000 gallons more at a cost of $3,000.
B77W could earn nearly $9,000 more on the additional seats at 70% load factor.

The net benefit to B77W is about $12,000, or nearly $4 million annually. Adding the higher cost of A346 engine maintenace would make the B77W even more attractive.

Quoting Stitch (Reply 8):
In terms of lease rates, you're looking about $930,000 per month for a brand new A340-600 and about $1.7 million a month for a brand new 777-300ER..

I don't know what the difference is in engine maintenance costs, but it would have to be fairly large to offset the large difference in lease rates. Fuel savings and additional revenues offset about $400,000 per month of $770,000 higher lease cost of B77W.
 
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RE: Fuel Cost Question. A346 V B777

Fri May 27, 2011 8:36 pm

Quoting LAXDESI (Reply 33):
I don't know what the difference is in engine maintenance costs, but it would have to be fairly large to offset the large difference in lease rates.

The 777-300ER is an airframe that is in demand and the A340-600 is one that is not, so I expect there are a whole host of reasons why a 77W commanded a significant price premium compared to an A346 when it comes to a monthly lease.
 
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RE: Fuel Cost Question. A346 V B777

Sat May 28, 2011 3:50 am

Quoting Stitch (Reply 34):
The 777-300ER is an airframe that is in demand and the A340-600 is one that is not, so I expect there are a whole host of reasons why a 77W commanded a significant price premium compared to an A346 when it comes to a monthly lease.

Agree. A.netters like you and me will never have the information set that industry insiders have that can easily explain large differences in lease rates.
 
sunrisevalley
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RE: Fuel Cost Question. A346 V B777

Sat May 28, 2011 1:20 pm

Quoting CargoLex (Reply 32):
Aircraft Commerce did a comparison of the 77W, A346, and 744 last fall using routes out of DXB flown on all three types to highlight the differences.

The best comparison here for a route was DXB-PER, as the conditions listed were basically identical for all three types. AC's conclusions:

In my view there is no reality in this exercise. So far as the 744 is concerned , after allowing for baggage, there is space for 19 half-width containers at a max. gross of 3500lb. each for a total of 66500lb. It seems extremely unlikely that the 520 cu.ft of bulk space can make up the shortfall and get even close to the 84120lb quoted in the article.
 
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zeke
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RE: Fuel Cost Question. A346 V B777

Sat May 28, 2011 1:40 pm

Quoting sunrisevalley (Reply 36):
In my view there is no reality in this exercise. So far as the 744 is concerned , after allowing for baggage, there is space for 19 half-width containers at a max. gross of 3500lb. each for a total of 66500lb. It seems extremely unlikely that the 520 cu.ft of bulk space can make up the shortfall and get even close to the 84120lb quoted in the article.

Agreed, the 744 has the same belly space as an A330-300 or 777-200. The 346 will carry 10 more LD3 containers than a 744, and has better takeoff performance bvy some margin.

The other numbers must have been taken for night time departures from DXB, the 346 will carry more than any of the 3 aircraft during a hot daytime takeoff from DXB.

These sort of articles always have some spin in them which is conveniently left out of the discussion. The 346 will burn more fuel than the 300ER, however generally it is the airframe you want to have to hot or high conditions out of the 3.
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Stitch
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RE: Fuel Cost Question. A346 V B777

Sat May 28, 2011 4:30 pm

The 747-400 payload figure of 75t is 8t more than Boeing's ACAP shows is the maximum (67t). The A346 is going out 14t below it's ACAP maximum (of 75t) and the 77W is 6.5t below ACAP maximum (of 70t).
 
OldAeroGuy
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RE: Fuel Cost Question. A346 V B777

Sun May 29, 2011 1:22 pm

Quoting zeke (Reply 37):
These sort of articles always have some spin in them which is conveniently left out of the discussion. The 346 will burn more fuel than the 300ER, however generally it is the airframe you want to have to hot or high conditions out of the 3.

Thanks for correcting the spin. Hot day performance is the deciding performance factor for airlines operating out of DXB.

Now I understand why the 773ER has outsold the A346 at a 4:1 rate and why EK never took delivery of the 346's they had on order while ordering some 70 773ER's and with additional ones on lease.
Airplane design is easy, the difficulty is getting them to fly - Barnes Wallis
 
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RE: Fuel Cost Question. A346 V B777

Sun May 29, 2011 4:17 pm

Quoting OldAeroGuy (Reply 39):

Sectors that would be representative of the fuel load given above would be for example GRU (dep 08:35), JFK (dep 02:15 & 08:30), SYD (08:50, 19:50), and LAX (02:15, 08:50).

None of those departures are during the hottest part of the day for DXB.
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RE: Fuel Cost Question. A346 V B777

Sun May 29, 2011 4:29 pm

Quoting zeke (Reply 40):
None of those departures are during the hottest part of the day for DXB.

Then why bring up hot day departure performance as an example of "spin" by the article?

I'm surprised the fuel burn topic between these two airplanes is still being discussed. The market has spoken and not in favor of the A346.
Airplane design is easy, the difficulty is getting them to fly - Barnes Wallis
 
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RE: Fuel Cost Question. A346 V B777

Sun May 29, 2011 5:31 pm

Quoting OldAeroGuy (Reply 41):

The spin is that they are comparing the fuel burn to payload ratio without stating the underlying assumptions. As highlighted in reply 38, the 346 & 77W are capable of more payload than specified, and the 744 is not capable of the payload claimed.

I have already acknowledged that the 346 will burn more fuel, however the payload figures out of DXB cannot be made during the hottest time of the day with the 77W, they can with the 346. One would need to adjust your schedule to fit the aircraft performance for the sector.

There will be a new kid on the block in a few years, the market is already starting to turn away from the 777.
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OldAeroGuy
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RE: Fuel Cost Question. A346 V B777

Sun May 29, 2011 5:59 pm

Quoting zeke (Reply 42):
the payload figures out of DXB cannot be made during the hottest time of the day with the 77W, they can with the 346. One would need to adjust your schedule to fit the aircraft performance for the sector.

And you"re assuming that EK would think that there is a need to depart at the hottest time of the day, therefore they would have a need for the A346.

If this were the case, why wouldn't they have taken a few A346's from their former order for dispatch during this all important, seasonal departure time?

Besides, the higher takeoff weight the A346 is capable of may result in little, of any, payload advantage. Remember that he A346 must carry about 10% more mission fuel and has about a 10t higher OEW. This reduces its payload capability.

I agree that the 773ER will be replaced, but with about 225 airplanes in the backlog and strong sales this year, it will be in production for a while. What are the A346 sales for this year and how is its backlog doing?

[Edited 2011-05-29 11:01:43]
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Stitch
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RE: Fuel Cost Question. A346 V B777

Sun May 29, 2011 6:37 pm

Per an EK Flight Ops guy, if DXB temp is 37°C, a 77W must unload 1.7t of cargo to make JFK.
 
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zeke
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RE: Fuel Cost Question. A346 V B777

Mon May 30, 2011 3:04 am

Quoting OldAeroGuy (Reply 43):
If this were the case, why wouldn't they have taken a few A346's from their former order for dispatch during this all important, seasonal departure time?

Be for the same reason CX does not have a sub fleet of 346 for the routes where they are more profitable. The cost of running the two fleets is more than the revenue you would miss out on, and airlines do not go around flying aircraft that are always 100% full.

Quoting OldAeroGuy (Reply 43):
Besides, the higher takeoff weight the A346 is capable of may result in little, of any, payload advantage. Remember that he A346 must carry about 10% more mission fuel and has about a 10t higher OEW. This reduces its payload capability.

Given the fuel load for that example, and increasing the burn for additional payload to reach MZFW, the 346 would still be taking off 16t below MTOW if it was loaded to MZFW. It would still have around 4-5t payload advantage.

OEW - 174,364 kg
Payload - 74,636 kg (62,473 kg given above, increase by 12,163 kg to get maximum payload)
ZFW - 251,000 kg (MZFW)
Fuel - 97,398 kg (30,556 US Gal SG 0.8 is 92,533 kg, and it would cost around 4.8 t to carry the additional 12.1 t of payload )
TOW - 348,398 kg (MTOW 365,000, margin of 16.6 t )

So the 346 has maximum structural payload capability for that range. However no airline is ordering aircraft based on 100% load factors, the payload LF in the example is 84% which is a realistic day to day payload, the 77W on the example is loaded to 92% LF which is about 10% higher than the EK average.

Quoting OldAeroGuy (Reply 43):
What are the A346 sales for this year and how is its backlog doing?

The 346 has been replaced by the A350-1000, an aircraft that has a 15-20t lower OEW than the 77W, with much lower fuel burns for similar payload capability (the 77W takes more payload if loaded always to 100% LF).

Quoting OldAeroGuy (Reply 43):

I agree that the 773ER will be replaced, but with about 225 airplanes in the backlog and strong sales this year, it will be in production for a while.

That is about 2 years worth of production, many airlines are not looking at getting new 77Ws past 2015. Some current 77W operators have already ordered A350-1000s. Times are changing, the 77W will be the old technology aircraft in 5 years that will have the sales slump, it has already happened to the 777-200/-200ER. 757/767, A300, A340.
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An225
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RE: Fuel Cost Question. A346 V B777

Mon May 30, 2011 8:02 am

Quoting Stitch (Reply 8):
Current average list for an A340-600 is $264 million, which is about $20 million less than the average list of a 777-300ER.

In terms of lease rates, you're looking about $930,000 per month for a brand new A340-600 and about $1.7 million a month for a brand new 777-300ER

Something with these figures doesn't make sense...
If I want to establish an aircraft leasing firm and I buy an A346 for 264 million, and than I lease it for 930,000 per month - where is my profit?
I would need ~24 years of fully booked leasing contracts for 930K just to repay the purchase cost. More realisticly, leasing value would probably decrease as the aircraft gets old, and less airlines would find this aircraft attractive in a future increased fuel prices. So we are talking on more than 24 years to cover the purchase cost.

IMHO This is not good business and would probably end up in a loss. Although I probably miss here something...

An225
 
sunrisevalley
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RE: Fuel Cost Question. A346 V B777

Mon May 30, 2011 12:07 pm

Quoting An225 (Reply 46):
IMHO This is not good business and would probably end up in a loss. Although I probably miss here something...

Perhaps something to do with depreciation and tax.
 
flipdewaf
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RE: Fuel Cost Question. A346 V B777

Mon May 30, 2011 12:41 pm

Quoting An225 (Reply 46):

Missing the point that Both the 77W and the 346 are already owned, paid for, there is nothing you can do about that.

The 77W will command a price of $1.7million per month.

No one in their right mind would lease an A346 at this price as it would cost them more in the long run becaue of the extra fuel it burns etc.

The only thing you can do to get that aircraft leased is to cut the rates so that the overall costs for the airline are similar to those of the 77W.

Hence the difference in price.

Yes, they will likely make a loss on the A346 at that price but that is better than not leasing it at all.

Very simply:

$200million aircraft leased at $1million/month for 10 years = $80million loss (negating sale value)

$200million aircraft leased at $2million/month (but no one will pay that because its too expensive) = $200million loss

$80million loss is better than $200million loss.

Hindsight is always 20/20 so its easy to say "dont buy the aircraft" after the fact.

Fred
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Stitch
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RE: Fuel Cost Question. A346 V B777

Mon May 30, 2011 1:39 pm

Quoting An225 (Reply 46):
If I want to establish an aircraft leasing firm and I buy an A346 for 264 million, and than I lease it for 930,000 per month - where is my profit?

Well for a start you likely would not be paying anywhere near list price for the plane. So that $265 million list price is more like $185 million. And there are other factors, like depreciation write-offs and such, as sunrisevalley suggests, that would mean on a 10-15 year lease you'd still come out ahead, even if your direct rent income did not cover the actual purchase price of the frame.

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