Waterbomber2 wrote:
-First of all, about flying frames for 30 years. We don't know that yet. A few non-standard frames being sent to the scrappers, others going to wetlease operators, and all so far to be immediately replaced by standard frames. Thisd should not be any indicator of how things will evolve from now on.
- About low yields in the low season. This is a global market.
Any fare searches will produce hundreds of flight options for any given date and city pairs. They are then visualised by potential purchasers according to fares, or schedule, or a combination of both.
What yields you capture does not depend on what aircraft size you offer, but who books your seats at what fares and why. What the A380 allows you to do is to compete against B779/A350/B787/A330 operators and force them off a route.
By having the most seats on offer in a market, you command the yields. A B787 operator tries to undercut you? Undercut him until he pushes his fares back up, and then push your fares up. He is going to fly empty, you are going to fly full. Some seats at low yields, some at higher yields. A few seasons of that and they will be off the route and you can jack the yields up. Even if you have to sell 30 seats here and 20 seats there at low yields, losing 30 seats even at low yields is a heavy loss for a 200 seat B789, while it's pocket change for an A380.
That's the power of the A380.
-Imho, cargo is comparable to very low yield passengers. It increases fuel burn, it lengthens turn-around times and causes delays, you need to carry around empty ULD's to reposition them, it requires an entire infra-structure and sales departments dedicated to it, it's ultra-seasonal and could be uni-directional, etc... Cargo is just a way to make up for wasted space in the underfloor hold of long haul aircraft.
On short to midhaul routes, there is little to no cargo. So why complain about the A380 specifically when BA has hundreds of A320's flying all around the place barely hauling any cargo?
If anything one should question why the long tubes have so much cargo capacity and how much waste that generates?
-ASK's and RPK's have been up worldwide in the past decade so absolute RPK and ASK growth is meaningless.
This is the same as talking about inflation. Did BA's figures grow faster than the general market or is it lagging behind and actually downsizing relative to the total market size?
Also, BA has been adding new capacity without retiring the airframes that they're coming to replace, creating an overlap. You can see this at many airlines taking B787's and A350's. They are not retiring the old frames that they're supposed to replace as fast as they're getting new ones. It can bve considered proper fleet planning, and those old frames will be gone at the next market downturn, so it's meaningless to take spot figures.
-A B787-10 LHR-JFK operation will be profitable short-term. But it will be up to what the competition will do.
For example, what will happen if DL takes used A380 and start dumping capacity on the route? Can BA compete with their teeny tiny B787-10's or will they eventually start to lose a grip and start losing money?
If BA had a dedicated A380 operation for the route, they would have been able to force DL/VS to retreat.
If you have a profitable market, you protect it and try to maximise its potential. You don't downsize to increase unit profit.
With all due respect, I think your logic is exactly backwards on these points. @BA777FO made a lot of good points, but I'd like to add a few additional ones to consider.
1) Slot constraints generally lead to upgauging the *small* flights first, especially for the dominant hub operator. Yes, if you're a small African / Asian airline with only a few precious slots at LHR, and you're only running longhaul service on a 777, then your only option is to upguage to something bigger (747, a380). Which is why Emirates runs A380s to a lot of slot-constrained airports. But if you're BA, you have literally hundreds of shorthaul NB flights into mundane places all over Europe. If you need more capacity into JFK/HKG/whatever, you don't upguage that route to an A380. You upguage a bunch of your daily flights into Paris, allowing you to save a slot, which you then use to launch an additional frequency. The hub operators *always* have flexibility to manage their slots in a slot-restricted airport.
2) If two airlines are competing and one has an A380 and the other flies 2 787s, all other factors being equal (e.g. hub dominance, connecting flows, etc), I would bet my money on the latter winning that competition. Any day of the week. Flexibility is key. The person who *must* sell the most seats doesn't command yields. He must accept the lowest yields, because he has no choice to say no to those customers. The one with the smaller capacity can sell to the highest bidders, and then stop selling well before the other one can.
Your thinking is off, I think, because at the lower yields, the fare is actually generating an operating *loss* to the airline. Yes, a few bucks is better than nothing, so the loss is less than not selling the seat at all. But it's still a loss, and as the saying goes, if you lose money on every sale, you can't make it up with volume. So if you have an A380 in which you must fill 100 seats with junk fares generating losses, and your competitor has a 777 in which he only has to sell 40 junk fares, your competitor will come out far, far ahead of you.
It gets even worse when comparing to a 787. At least the A380 still beats a 777 in seat-mile costs, so those junk fare seats cost a few dollars less in expenses (not enough to compensate for the fact that you need to sell 60 more of them). A 787 is actually less expensive than an A380, so not only does the A380 have to sell more junk fares, each junk fare generates a higher loss than in a 787. It's a double whammy.
3) Cargo is *very* profitable. It's one of the main reasons the 777 is so favored for longhauls. The inability to haul large amounts of cargo (relative to its size) is absolutely a big knock against the A380 for the longhaul routes that an A380 flies. Check out this article:
https://thepointsguy.com/news/how-airli ... rom-cargo/Here's a choice quote: “On average, 50% or more of international flights are only profitable due to cargo’s contribution”
4) I'll throw you a bone on this one
JFK is one of the few routes where an A380 *might* make sense, simply because a) BA already flies almost hourly. So additional frequency doesn't help; b) JFK itself is tight on slots, and, not being the hub operator there, BA can't just adjust slots from other routes; c) it's a massive O&D market where BA is preferred by a large group of passengers. When all those conditions are met, yes, an A380 might allow BA to capture more passengers at a reasonable yield to make more money than a 747 or 777. But how many other markets are like that for BA, where BA doesn't already fly the A380? Heck, even Chicago, the #2 financial and business destination in the US, with similar (albeit smaller) market characteristics to JFK, can't sustain more than 1 A380 in the summer months.
Let me be clear: I'm not saying that the current A380 fleet is being badly used or isn't profitable for BA. I'll agree that they're probably doing okay with their current fleet. It's that *additional* A380s really don't make sense, because I just don't see many additional routes that need an A380.
The irony of all this is that as a passenger, I like the A380 and hate the 787. And yet I totally understand why airline executives are the exact opposite
