eurotrader85
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Re: Package of new/used A380's pitched to BA was uncompetitive: Cruz

Wed Apr 17, 2019 9:37 pm

oldannyboy wrote:
musman9853 wrote:
https://www.flightglobal.com/news/articles/package-of-newused-a380s-pitched-to-ba-was-uncompe-457443/

pretty interesting article. according to BA's ceo the a380 wasn't even close to being competitive with the 777x. a big factor was interior mods would have taken 50 million a plane, which at that point makes it better just to buy new and more efficient.


Ok, so it now turns out that EK have completely revamped the whole interior (it was gutted) of their 777LR fleet (10 aircraft) for a mere 150MillionUS$, which makes it 15Million per aircraft.. And EK are neither particularly cheap when it comes to internal fittings and furnishings!.
I think Mr Cruz is playing with numbers in order to back and substantiate a potentially wrong decision in the face of subsequent polemics and criticism. Not a chance interior mods for the used A380s could rack up to such an amount.


I think this has a lot of legs in it. The number of $50Mln for a refit of an A380 far far exceeds any quotation heard before. The long and short of the 779 order means the last of the 744s will be replaced by frames which provide BA with no real potential capacity growth, other than what it was already able to with a bit of 'densification'. This at its only real hub (LGW not being treated as a hub operation). Yes the 319s are being massaged out and up-gauged for the feed but this is an airline/business unit the analyst community has questioned before regarding innovative thought for development. BA is rather unique globally with its only hub being the most congested airport in the world, with no open slot availability it can acquire for WB frequency increase, so this question is bound to be raised in coming time and it seems some early attempted defence to try to hold off the critics.

The future will show us if they have chosen right. Pushing Pax to other hubs, allowing others who have the ability to add capacity to take market share, while BA moves to a more supply restricted O&D model leveraging off its dominant slot portfolio giving it greater yield.
 
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seabosdca
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Re: Package of new/used A380's pitched to BA was uncompetitive: Cruz

Wed Apr 17, 2019 10:42 pm

Waterbomber2 wrote:
Because we don't take executives for their word, we are able to make our independent analysis to do a reality check.
Executives say things to match their own agenda. Those agenda's range from bribes (Airbus scandal anyone?), to excentric visions (Project Sunrise, Project "let's make BA a high fares LCC for short-term profits")


What do you think would be Cruz's reason for committing securities fraud here? Kickbacks from Boeing? That he is a secret Airbus hater, despite having billions of dollars of Airbus products on order? There are real consequences in multiple jurisdictions for saying things that aren't true to investors of a public company. I think it's more likely that Cruz is explaining accurately why BA made the decision it did.

If you look at the facts, the B777X is a brand new type in the BA fleet with little parts commonality with their B777 fleet to make it a selling point, too close in size and performance to justify running them along with the A350-1000's that are starting deliveries this year.
Considering IB will also have A350's, standardising on this aircraft type makes way more sense than the benefits of 2 or 3 additional rows of Y seats.


And yet all but one of the known 777X customers plan to operate them alongside the A350. It appears the customers and their green eyeshades have come to a different conclusion from yours: that the lightweight, long-ranged A350 and the heavy-lift 777X coexist quite nicely in a fleet plan.

The per unit sales price was probably lower than B777X.


Which, if true, just reinforces that operating costs of the A380 were a massive problem.

So it would have made more sense for BA to order a mix of RR A350/A380 instead of GE B777X's.


One expects that if this were true then they would have done so. They have a lot of expensive analysis going into fleet decisions.

The worst may be the implications for BA's relationship with RR. RR could really have used BA's order right about now, they must be p*ssed.


Being "p*ssed" about the loss of an order never helped anybody in the aerospace business. They will come back and try again. There is still a major opportunity, that I think is at least partly Airbus's to lose, in replacing the rest of BA's 772s. The 359 seems like the perfect replacement for the (large) part of the 772 fleet that flies farther than US East Coast or the Middle East.

The oddball is the B777X, this is why Cruz is feeling he needs to justify his choices...


The hard justification Cruz had to make wasn't to the public, it was to the IAG Board.
 
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Re: Package of new/used A380's pitched to BA was uncompetitive: Cruz

Wed Apr 17, 2019 10:48 pm

I'm not so sure that the cost estimates are really that extreme; considering the amount of customization that was provided for each airline and that their may need to be other changes to support the interior changes as I understand that some of the floor structure was also customized to the planned interior.

As for comparing the price of a 777 interior refurb to a A380. A 777 D check usually takes in the range of 3 weeks (I have seen reported times from 2 to 4 weeks); which usually includes a new interior. Emirates has done A380 3C checks in 55 days - which included removing, refurbishing/replacement, and reinstalling the interior (like for like). Double the time for a 777 D check. Why would you not expect something close to double the cost?

I personally believe that one of the Airbus mistakes on the A380 was the degree in which they allowed interior customization and the resulting high cost of future interior work. Others would disagree with that. But, it makes any current and future interior refurbishments or changes more expensive than in other aircraft.

Have a great day,
 
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Re: Package of new/used A380's pitched to BA was uncompetitive: Cruz

Thu Apr 18, 2019 2:12 am

jomur wrote:
I wonder how much BA are getting the 777s for? Maybe Boeing where selling them at a loss so to steal the deal.

Maybe Airbus was selling new and used A380s at a loss too, and still couldn't seal the deal.
 
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Re: Package of new/used A380's pitched to BA was uncompetitive: Cruz

Thu Apr 18, 2019 3:09 am

Waterbomber2 wrote:
JayinKitsap wrote:
Why argue over the cost to rehab the interior. BA in their analysis found the cost to acquire and modify the A380 coupled with its performance was above their strike point, so they declined. In the coming years there will be many cases where used A380's look for new homes, let's see how well they are picked up.


...
The Financial Times is saying that BA stopped offering the Financial Times as a reaction to a piece written about BA.
This is a short-sighted move and will only cause FT to dig more into everything that is wrong at BA.
British newspaper the Financial Times (FT) has taken the unusual step of taking an ad out in its own publication. Not to advertise new products or services, but to berate former customer British Airways (BA) for ending their relationship.

Copies of the FT used to be distributed to BA passengers, but the airline ended the contract.

Paraphrasing BA’s famous advertising slogan “the world’s favorite airline,” the ad states that passengers might be better served on rival carriers.

https://www.cnbc.com/2019/04/16/financi ... paper.html


I'm surprised that any airline offers any physical paper or magazine in this day and age. A rough number - $ 1 each with a 2# wt x 150 papers is 300# on each flight, plus clean up in the cabin and boarding areas. Offer it digital instead. As to the spat between them this article has some of the gossip, not good to get into a brawl with someone that buys ink by the barrel.

https://onemileatatime.com/british-airw ... ial-times/
 
Waterbomber2
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Re: Package of new/used A380's pitched to BA was uncompetitive: Cruz

Thu Apr 18, 2019 3:13 am

seabosdca wrote:
Waterbomber2 wrote:
Because we don't take executives for their word, we are able to make our independent analysis to do a reality check.
Executives say things to match their own agenda. Those agenda's range from bribes (Airbus scandal anyone?), to excentric visions (Project Sunrise, Project "let's make BA a high fares LCC for short-term profits")


What do you think would be Cruz's reason for committing securities fraud here? Kickbacks from Boeing? That he is a secret Airbus hater, despite having billions of dollars of Airbus products on order? There are real consequences in multiple jurisdictions for saying things that aren't true to investors of a public company. I think it's more likely that Cruz is explaining accurately why BA made the decision it did.

If you look at the facts, the B777X is a brand new type in the BA fleet with little parts commonality with their B777 fleet to make it a selling point, too close in size and performance to justify running them along with the A350-1000's that are starting deliveries this year.
Considering IB will also have A350's, standardising on this aircraft type makes way more sense than the benefits of 2 or 3 additional rows of Y seats.


And yet all but one of the known 777X customers plan to operate them alongside the A350. It appears the customers and their green eyeshades have come to a different conclusion from yours: that the lightweight, long-ranged A350 and the heavy-lift 777X coexist quite nicely in a fleet plan.

The per unit sales price was probably lower than B777X.


Which, if true, just reinforces that operating costs of the A380 were a massive problem.

So it would have made more sense for BA to order a mix of RR A350/A380 instead of GE B777X's.


One expects that if this were true then they would have done so. They have a lot of expensive analysis going into fleet decisions.

The worst may be the implications for BA's relationship with RR. RR could really have used BA's order right about now, they must be p*ssed.


Being "p*ssed" about the loss of an order never helped anybody in the aerospace business. They will come back and try again. There is still a major opportunity, that I think is at least partly Airbus's to lose, in replacing the rest of BA's 772s. The 359 seems like the perfect replacement for the (large) part of the 772 fleet that flies farther than US East Coast or the Middle East.

The oddball is the B777X, this is why Cruz is feeling he needs to justify his choices...


The hard justification Cruz had to make wasn't to the public, it was to the IAG Board.



Airbus' sales team got away with bribing half the world to buy their aircraft... well almost, or perhaps they still will despite the ongoing "investigation".
Cruz is going to get away with what he's saying because yes, an interior refurb can cost 50 million if you plan on doing a lot of unneeded things. It's also too far-fetched for an investor to question a fleet decision 10 years down the line when the effects will be felt, because well, most investors won't hold stakes for that long.
For instance, QF's Alan Joyce is critical of the previous management's decision to purchase A380's, but no one is going to take the previous management's bonusses back, are they?

The IAG board is giving Cruz a free pass on everything. All he's doing is cut, cut, cut because cutting is always popular with investors. Nobody is going to take his bonus away for densifying the B777's, because it makes business sense, on paper.
The reality though is that yesterday I was booking a flight to Japan and had BA as a very plausible option. Guess what, I paid 3% more to fly JAL because I'll be getting a 8-abreast B787 on the way out, and a 9-abreast B77W with the most comfortable Y seats on the way back.
How do you quantify the revenues and earnings lost from passengers who decided to book elsewhere because of round after round of cuts to the product you offer? It's not quantifyable as long as your business is posting earnings and investors are seeing an ROI.
The hard questions are only asked when things get ugly.

If you replaced Cruz by a teddy bear, BA would probably post similar, if not better earnings.

You want to see BA stagnate and become a third tier airline? Then Cruz is your guy.
You want to see BA become a first tier airline again? Then you need new management with a vision and a growth strategy.

The 2008 financial crisis has taken BA from a 2008 EBIT of 922M GBP to a 2009 loss of 401 GBP.
This is how fast things can go downhill in this business. BA didn't have a single A380 in the fleet back then, it was all B777's and B747's with a few B767's on the way out. In fact, since the A380 is in the fleet, BA has posted record profits year after year.
Is it thanks to the A380 though or rather thanks to lower fuel prices? Probably the latter, but this shows that you can prove anything with numbers.
 
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Re: Package of new/used A380's pitched to BA was uncompetitive: Cruz

Thu Apr 18, 2019 10:14 am

Waterbomber2 wrote:
If you look at the facts, the B777X is a brand new type in the BA fleet with little parts commonality with their B777 fleet to make it a selling point, too close in size and performance to justify running them along with the A350-1000's that are starting deliveries this year.
Considering IB will also have A350's, standardising on this aircraft type makes way more sense than the benefits of 2 or 3 additional rows of Y seats.
The A380 fits BA's needs and they already have 12 of the type in the fleet, RR engines, wings (stimulation of local economy comes back as purchase power) and several systems made in UK. The per unit sales price was probably lower than B777X.


Not sure where you're getting your facts from but they're wrong. The 777X has 70% parts commonality with the 787 and 77W of which BA operates both. The conversion for pilots is little more than a week from the 787 or 777. For cabin crew it's likely to be the same licence.

The A350 has no cabin crew rest facilities - the 1000's range isn't massive and will be limited to sectors of under 10 hours. Basically west coast USA and the Far East is off the map. India is about as far as it'll go. The 777X won't have that limitation. They were ordered for, and are optomised for, very different missions.

The per unit price of the 777X was not higher than the A380 - hence a major part of the reason that Boeing won the order.

Waterbomber2 wrote:
So it would have made more sense for BA to order a mix of RR A350/A380 instead of GE B777X's.
The worst may be the implications for BA's relationship with RR. RR could really have used BA's order right about now, they must be p*ssed.

The oddball is the B777X, this is why Cruz is feeling he needs to justify his choices...


BA already has GE 777s, which outnumber the RR 777s. Also, BA isn't exactly enthused with RR over the 787 debacle. BA will still be down 2 frames throughout winter 2019 and possibly beyond. Spreading engine risk is most likely going to pay a bigger dividend than having all of your eggs in one basket. Plus this will make future bargaining with both manufacturers more competitive in the future - RR always thought they were a shoe-in, now they'll need to be more competitive - and sort out problems earlier.

Waterbomber2 wrote:
For our part, we can dig into what is being said about the decision not to take additional (used) A380's, as justified by the cost of refurbishing the cabin being prohibitive, and there isn't much substance to that.


The cabin refurb costs were never stated to be the only reason. It was simply a big reason among many. Aeguably the biggest reason is that the 777X will burn 50% less fuel than the A380 despite only carrying ~50 passengers less. It'll also carry 15+ tonnes more cargo, won't be restricted on parking availability and airports that can actually handle the the thing. The A380 is simply not a good enough or flexible enough aircraft. The 777X is simply a better aircraft at a better price. There's really not much more to say.
 
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Re: Package of new/used A380's pitched to BA was uncompetitive: Cruz

Thu Apr 18, 2019 10:52 am

Waterbomber2 wrote:
The IAG board is giving Cruz a free pass on everything. All he's doing is cut, cut, cut because cutting is always popular with investors. Nobody is going to take his bonus away for densifying the B777's, because it makes business sense, on paper.
The reality though is that yesterday I was booking a flight to Japan and had BA as a very plausible option. Guess what, I paid 3% more to fly JAL because I'll be getting a 8-abreast B787 on the way out, and a 9-abreast B77W with the most comfortable Y seats on the way back.


Except he hasn't just cut, cut, cut. £6.5bn is being invested in the airline from new aircraft (A320neos/787s/A350s/B777X) to a new Club seat, best in class bedding in J, power sockets being installed at every seat, wifi, new and enhanced catering in every longhaul cabin, new soft product for F, updated and added lounges...that's just part of it. Doesn't sound much like cutting to me.

The customer feedback on the refreshed 777s has been very good. Have you been on it? Net promoter scores are higher for passengers that have been on the refreshed 777s versus those that have been on the ones yet to be refreshed. And it also leads to a lower unit cost than Norwegian's 787s and allows for 20% greater revenue. It makes sense on paper and it's delivering in reality.

As for Japan, if you flew to Haneda, you'd be on a 9-abreast 77W or to Narita on a new 787. Not much difference, really. It's a shame your rabid dislike for BA has clearly clouded your judgement.

Waterbomber2 wrote:
How do you quantify the revenues and earnings lost from passengers who decided to book elsewhere because of round after round of cuts to the product you offer? It's not quantifyable as long as your business is posting earnings and investors are seeing an ROI.
The hard questions are only asked when things get ugly.


BA is increasing passenger numbers and load factors year on year and has done for nearly a decade. For every passenger it's losing elsewhere, it's gaining several new ones. Profits keep rising, as does load factor, unit revenue, operating margin and ROIC - it's one of the most successful European, even global, airlines by almost any measure.

Waterbomber2 wrote:
If you replaced Cruz by a teddy bear, BA would probably post similar, if not better earnings.


Haha, perhaps so. However, what does that say about other CEOs at other airlines with lower margins and loadfactors and ROIC?

Waterbomber2 wrote:
You want to see BA stagnate and become a third tier airline? Then Cruz is your guy.
You want to see BA become a first tier airline again? Then you need new management with a vision and a growth strategy.


Do you know about Plan4? A sustaunable growth rate means a stable cost base. As much as half of the workforce may have hated it, closing NAPS has meant BA has a stable and cost-competitive future. Cruz did it without so much of a whimper from staff. This years pay claim may be a different story, but NAPS was the big one and he landed it.

Waterbomber2 wrote:
The 2008 financial crisis has taken BA from a 2008 EBIT of 922M GBP to a 2009 loss of 401 GBP.
This is how fast things can go downhill in this business. BA didn't have a single A380 in the fleet back then, it was all B777's and B747's with a few B767's on the way out. In fact, since the A380 is in the fleet, BA has posted record profits year after year.
Is it thanks to the A380 though or rather thanks to lower fuel prices? Probably the latter, but this shows that you can prove anything with numbers.


Indeed. Back then Willie Walsh was CEO and now Alex Cruz is, so it must all be down to Cruz, right?! There's been a massive change throughtout the airline. So much has been streamlined and efficiencies made, a lot through IAG. Employees are now arguably paid below market rate whereas in 2008 they were up at the top. Gatwick has been revolutionised. It's an airline that almost recession proof - something a mix of A320neos/B787s/A350s/B777Xs allow but A380s really don't.

BA is prepared for the next downturn. In 2008 is was just focused on 10% margin at all costs. Cruz might not be as dumb as you think.
 
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Re: Package of new/used A380's pitched to BA was uncompetitive: Cruz

Thu Apr 18, 2019 1:00 pm

BA777FO wrote:
Indeed. Back then Willie Walsh was CEO and now Alex Cruz is, so it must all be down to Cruz, right?! There's been a massive change throughtout the airline. So much has been streamlined and efficiencies made, a lot through IAG. Employees are now arguably paid below market rate whereas in 2008 they were up at the top. Gatwick has been revolutionised. It's an airline that almost recession proof - something a mix of A320neos/B787s/A350s/B777Xs allow but A380s really don't.

BA is prepared for the next downturn. In 2008 is was just focused on 10% margin at all costs. Cruz might not be as dumb as you think.

Thanks for the fact-laden post. It really gave me a good idea of how all the pieces of the BA puzzle fit together.

It seems many want BA to return to the "glory days" of providing "traditional" amounts of space and paying staff above market rates, but it should be clear that if they kept on that path they'd be a UK version of Alitalia.

It's amazing of how locked in some people are to the hype that accompanied the launch of the A380. People can't seem to wrap their heads around the fact that the airplane's biggest supporter, EK, asked Airbus to be let out of its orders, even though they presumably had nice discounts due to their purchase volume. People can't seem to wrap their head around the fact that BA has done the sums at least twice (2016, 2019) and concluded that buying new A380s made no sense and at best they might be able to find use for A380s purchased at scrap prices if the configuration wasn't too different from their own. People don't seem to notice that even EK has decided they can't find a way to grow their A380 fleet going forward, and once the production line shuts down, the cost of keeping them flying will go up, yet no improvements in performance to compensate will happen. The A380 had its chance, and while it did a lot of things well, overall it just missed the mark.
Wake up to find out that you are the eyes of the world
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Re: Package of new/used A380's pitched to BA was uncompetitive: Cruz

Thu Apr 18, 2019 2:55 pm

BA777FO wrote:
Waterbomber2 wrote:
If you look at the facts, the B777X is a brand new type in the BA fleet with little parts commonality with their B777 fleet to make it a selling point, too close in size and performance to justify running them along with the A350-1000's that are starting deliveries this year.
Considering IB will also have A350's, standardising on this aircraft type makes way more sense than the benefits of 2 or 3 additional rows of Y seats.
The A380 fits BA's needs and they already have 12 of the type in the fleet, RR engines, wings (stimulation of local economy comes back as purchase power) and several systems made in UK. The per unit sales price was probably lower than B777X.


Not sure where you're getting your facts from but they're wrong. The 777X has 70% parts commonality with the 787 and 77W of which BA operates both. The conversion for pilots is little more than a week from the 787 or 777. For cabin crew it's likely to be the same licence.

The A350 has no cabin crew rest facilities - the 1000's range isn't massive and will be limited to sectors of under 10 hours. Basically west coast USA and the Far East is off the map. India is about as far as it'll go. The 777X won't have that limitation. They were ordered for, and are optomised for, very different missions.

The per unit price of the 777X was not higher than the A380 - hence a major part of the reason that Boeing won the order.

Waterbomber2 wrote:
So it would have made more sense for BA to order a mix of RR A350/A380 instead of GE B777X's.
The worst may be the implications for BA's relationship with RR. RR could really have used BA's order right about now, they must be p*ssed.

The oddball is the B777X, this is why Cruz is feeling he needs to justify his choices...


BA already has GE 777s, which outnumber the RR 777s. Also, BA isn't exactly enthused with RR over the 787 debacle. BA will still be down 2 frames throughout winter 2019 and possibly beyond. Spreading engine risk is most likely going to pay a bigger dividend than having all of your eggs in one basket. Plus this will make future bargaining with both manufacturers more competitive in the future - RR always thought they were a shoe-in, now they'll need to be more competitive - and sort out problems earlier.

Waterbomber2 wrote:
For our part, we can dig into what is being said about the decision not to take additional (used) A380's, as justified by the cost of refurbishing the cabin being prohibitive, and there isn't much substance to that.


The cabin refurb costs were never stated to be the only reason. It was simply a big reason among many. Aeguably the biggest reason is that the 777X will burn 50% less fuel than the A380 despite only carrying ~50 passengers less. It'll also carry 15+ tonnes more cargo, won't be restricted on parking availability and airports that can actually handle the the thing. The A380 is simply not a good enough or flexible enough aircraft. The 777X is simply a better aircraft at a better price. There's really not much more to say.


To start from the top.
The B777X definitely doesn't have 70% parts commonality with the B787 and B77W.
Quote a source for this.
In the cockpit and some LRU's perhaps, but they won't even have the same windows or cabin furnishings.

The A350-1000 exceeds the B779's range and they have more crew rest facility options, including containerised solutions.

There is no commonality between the GE90 and GE9X that I know of. That BA is already a GE customer is a pretty irrelevant fact when I'm mentionning the special relationship between BA and RR.
GE bid like hell to win the BA business on the GE90 back in 1991. Airbus were pretty pissed.

See flightglobal article BA opts for 777/GE90 combination.

Airbus and RR must be very very pissed about BA's order for B777X, almost 30 years after their orginal order for B777's.

British Airways has killed thousands of cutting edge British jobs with the B777X order, by denying Airbus their last hope for an A380 order and by not ordering the A350 with high British content.
Combined with the Brexit debacle, I think that there is no way that Airbus will include major workshare for a British company for their next design. At this point, it makes more sense to build wings in Japan, because Japan will guarantee orders and investments for workshare
 
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Re: Package of new/used A380's pitched to BA was uncompetitive: Cruz

Thu Apr 18, 2019 3:24 pm

BA777FO wrote:
Waterbomber2 wrote:
The IAG board is giving Cruz a free pass on everything. All he's doing is cut, cut, cut because cutting is always popular with investors. Nobody is going to take his bonus away for densifying the B777's, because it makes business sense, on paper.
The reality though is that yesterday I was booking a flight to Japan and had BA as a very plausible option. Guess what, I paid 3% more to fly JAL because I'll be getting a 8-abreast B787 on the way out, and a 9-abreast B77W with the most comfortable Y seats on the way back.


Except he hasn't just cut, cut, cut. £6.5bn is being invested in the airline from new aircraft (A320neos/787s/A350s/B777X) to a new Club seat, best in class bedding in J, power sockets being installed at every seat, wifi, new and enhanced catering in every longhaul cabin, new soft product for F, updated and added lounges...that's just part of it. Doesn't sound much like cutting to me.

The customer feedback on the refreshed 777s has been very good. Have you been on it? Net promoter scores are higher for passengers that have been on the refreshed 777s versus those that have been on the ones yet to be refreshed. And it also leads to a lower unit cost than Norwegian's 787s and allows for 20% greater revenue. It makes sense on paper and it's delivering in reality.

As for Japan, if you flew to Haneda, you'd be on a 9-abreast 77W or to Narita on a new 787. Not much difference, really. It's a shame your rabid dislike for BA has clearly clouded your judgement.

Waterbomber2 wrote:
How do you quantify the revenues and earnings lost from passengers who decided to book elsewhere because of round after round of cuts to the product you offer? It's not quantifyable as long as your business is posting earnings and investors are seeing an ROI.
The hard questions are only asked when things get ugly.


BA is increasing passenger numbers and load factors year on year and has done for nearly a decade. For every passenger it's losing elsewhere, it's gaining several new ones. Profits keep rising, as does load factor, unit revenue, operating margin and ROIC - it's one of the most successful European, even global, airlines by almost any measure.

Waterbomber2 wrote:
If you replaced Cruz by a teddy bear, BA would probably post similar, if not better earnings.


Haha, perhaps so. However, what does that say about other CEOs at other airlines with lower margins and loadfactors and ROIC?

Waterbomber2 wrote:
You want to see BA stagnate and become a third tier airline? Then Cruz is your guy.
You want to see BA become a first tier airline again? Then you need new management with a vision and a growth strategy.


Do you know about Plan4? A sustaunable growth rate means a stable cost base. As much as half of the workforce may have hated it, closing NAPS has meant BA has a stable and cost-competitive future. Cruz did it without so much of a whimper from staff. This years pay claim may be a different story, but NAPS was the big one and he landed it.

Waterbomber2 wrote:
The 2008 financial crisis has taken BA from a 2008 EBIT of 922M GBP to a 2009 loss of 401 GBP.
This is how fast things can go downhill in this business. BA didn't have a single A380 in the fleet back then, it was all B777's and B747's with a few B767's on the way out. In fact, since the A380 is in the fleet, BA has posted record profits year after year.
Is it thanks to the A380 though or rather thanks to lower fuel prices? Probably the latter, but this shows that you can prove anything with numbers.


Indeed. Back then Willie Walsh was CEO and now Alex Cruz is, so it must all be down to Cruz, right?! There's been a massive change throughtout the airline. So much has been streamlined and efficiencies made, a lot through IAG. Employees are now arguably paid below market rate whereas in 2008 they were up at the top. Gatwick has been revolutionised. It's an airline that almost recession proof - something a mix of A320neos/B787s/A350s/B777Xs allow but A380s really don't.

BA is prepared for the next downturn. In 2008 is was just focused on 10% margin at all costs. Cruz might not be as dumb as you think.


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Re: Package of new/used A380's pitched to BA was uncompetitive: Cruz

Thu Apr 18, 2019 4:48 pm

Waterbomber2 wrote:
The A350-1000 exceeds the B779's range and they have more crew rest facility options, including containerised solutions.

What he's saying is BA did not order crew rests for their A35J, not that none exist.

Waterbomber2 wrote:
Airbus and RR must be very very pissed about BA's order for B777X, almost 30 years after their orginal order for B777's.

Nope, businesses are run by grown-ups who realize they can't win every deal with every customer for every need every time.

Waterbomber2 wrote:
British Airways has killed thousands of cutting edge British jobs with the B777X order, by denying Airbus their last hope for an A380 order and by not ordering the A350 with high British content.

Nope, Airbus gambled that the market would support not only A380-800 but also A380-800F and A380-900, planning to build 48 per year. They were wrong and no BA order could fix the fundamental problem with the A380, that the market evolved differently than Airbus bet it would.

Waterbomber2 wrote:
Combined with the Brexit debacle, I think that there is no way that Airbus will include major workshare for a British company for their next design. At this point, it makes more sense to build wings in Japan, because Japan will guarantee orders and investments for workshare

I'm sure you'll bring that up at the next shareholder's meeting.
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Speedbird2155
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Re: Package of new/used A380's pitched to BA was uncompetitive: Cruz

Thu Apr 18, 2019 5:59 pm

I don't know where many of you get your "facts" from. Alex Cruz is speaking based on the evaluation conducted by experienced and knowledgeable individuals from many areas across BA and IAG as to what the best aircraft would be for the mission BA intends. Airbus offered a mix of A380/A350 v B777X and the fact is that the proposals from Airbus did not stack up financially against that from Boeing, based on the mission BA set out.

That analysis would have looked at the costs of refitting used A380s and given how customised these are, it is a large investment. This is not just about changing the seats but changing plumbing so that toilets and galleys are aligned to match BA A380s. At the end of it, the team determined that the proposal wasn't one that they could support against the alternative and the decision was made.

You can continue to speculate and make all the allegation you want about what should and shouldn't have happened, but the people who needed to make the decision did what they had to.

And to set the record straight, all of BA A350-1000s have the appropriate crew rest facilities.
 
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seabosdca
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Re: Package of new/used A380's pitched to BA was uncompetitive: Cruz

Thu Apr 18, 2019 6:13 pm

BA777FO wrote:
The A350 has no cabin crew rest facilities - the 1000's range isn't massive and will be limited to sectors of under 10 hours. Basically west coast USA and the Far East is off the map. India is about as far as it'll go. The 777X won't have that limitation. They were ordered for, and are optomised for, very different missions.


The rest of your post makes sense, but this is odd. The A350-1000 is a legitimate 15-hour aircraft, and seems ideal for longer missions, not shorter ones (where the 787-10 will rule the roost). Is BA ordering their A350s with low MTOW and/or a low thrust engine option?
 
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SEPilot
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Re: Package of new/used A380's pitched to BA was uncompetitive: Cruz

Thu Apr 18, 2019 6:28 pm

It used to be that the biggest plane had the lowest seat-mile costs. That is no longer true, and there are now four long range planes available with better seat-mile costs than the A380. That being the case there is no valid economic justification for most airlines to buy it. An empty seat costs nearly as much to fly as an occupied one, and the bigger the plane, the more likely you are to have empty seats. Flying smaller planes with better seat-mile costs will, as far as I can see, almost always make the airline more money no matter how you spin it. And that is why both the passenger 747 and the A380 are now dead.
The problem with making things foolproof is that fools are so doggone ingenious...Dan Keebler
 
Waterbomber2
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Re: Package of new/used A380's pitched to BA was uncompetitive: Cruz

Thu Apr 18, 2019 6:58 pm

BA777FO wrote:
Waterbomber2 wrote:
The IAG board is giving Cruz a free pass on everything. All he's doing is cut, cut, cut because cutting is always popular with investors. Nobody is going to take his bonus away for densifying the B777's, because it makes business sense, on paper.
The reality though is that yesterday I was booking a flight to Japan and had BA as a very plausible option. Guess what, I paid 3% more to fly JAL because I'll be getting a 8-abreast B787 on the way out, and a 9-abreast B77W with the most comfortable Y seats on the way back.


Except he hasn't just cut, cut, cut. £6.5bn is being invested in the airline from new aircraft (A320neos/787s/A350s/B777X) to a new Club seat, best in class bedding in J, power sockets being installed at every seat, wifi, new and enhanced catering in every longhaul cabin, new soft product for F, updated and added lounges...that's just part of it. Doesn't sound much like cutting to me.

The customer feedback on the refreshed 777s has been very good. Have you been on it? Net promoter scores are higher for passengers that have been on the refreshed 777s versus those that have been on the ones yet to be refreshed. And it also leads to a lower unit cost than Norwegian's 787s and allows for 20% greater revenue. It makes sense on paper and it's delivering in reality.

As for Japan, if you flew to Haneda, you'd be on a 9-abreast 77W or to Narita on a new 787. Not much difference, really. It's a shame your rabid dislike for BA has clearly clouded your judgement.

Waterbomber2 wrote:
How do you quantify the revenues and earnings lost from passengers who decided to book elsewhere because of round after round of cuts to the product you offer? It's not quantifyable as long as your business is posting earnings and investors are seeing an ROI.
The hard questions are only asked when things get ugly.


BA is increasing passenger numbers and load factors year on year and has done for nearly a decade. For every passenger it's losing elsewhere, it's gaining several new ones. Profits keep rising, as does load factor, unit revenue, operating margin and ROIC - it's one of the most successful European, even global, airlines by almost any measure.

Waterbomber2 wrote:
If you replaced Cruz by a teddy bear, BA would probably post similar, if not better earnings.


Haha, perhaps so. However, what does that say about other CEOs at other airlines with lower margins and loadfactors and ROIC?

Waterbomber2 wrote:
You want to see BA stagnate and become a third tier airline? Then Cruz is your guy.
You want to see BA become a first tier airline again? Then you need new management with a vision and a growth strategy.


Do you know about Plan4? A sustaunable growth rate means a stable cost base. As much as half of the workforce may have hated it, closing NAPS has meant BA has a stable and cost-competitive future. Cruz did it without so much of a whimper from staff. This years pay claim may be a different story, but NAPS was the big one and he landed it.

Waterbomber2 wrote:
The 2008 financial crisis has taken BA from a 2008 EBIT of 922M GBP to a 2009 loss of 401 GBP.
This is how fast things can go downhill in this business. BA didn't have a single A380 in the fleet back then, it was all B777's and B747's with a few B767's on the way out. In fact, since the A380 is in the fleet, BA has posted record profits year after year.
Is it thanks to the A380 though or rather thanks to lower fuel prices? Probably the latter, but this shows that you can prove anything with numbers.


Indeed. Back then Willie Walsh was CEO and now Alex Cruz is, so it must all be down to Cruz, right?! There's been a massive change throughtout the airline. So much has been streamlined and efficiencies made, a lot through IAG. Employees are now arguably paid below market rate whereas in 2008 they were up at the top. Gatwick has been revolutionised. It's an airline that almost recession proof - something a mix of A320neos/B787s/A350s/B777Xs allow but A380s really don't.

BA is prepared for the next downturn. In 2008 is was just focused on 10% margin at all costs. Cruz might not be as dumb as you think.


Perhaps Cruz can sell the 9 to 10-abreast conversion to investors as an upgrade, but you can't do that on airliners.net without being met with the appropriate criticism.
HND is still a 9-abreast B77W? How about in a few months? I'm not taking chances.
Personal electrical outlets have been an industry norm for almost a decade now. Glad to know that BA is catching up.
You can watch BBC live among a variety of live channels on a variety of airlines now, but not on BA.

T5 was a complete mess and still is. Too often you don't know your gate number until 40 minutes before your flight time and need to keep checking the screens. When you leave the lounge to get to your gate on time, you end up waiting another half hour because they can't seem to decide which aircraft to assign to your flight. Past the departure time, there is still no sign of boarding.

BA have cut the short haul snack service for BOB. Shameful for pax who come off a long haul journey and just have gone through the misery of transferring at LHR.
BA have cut legroom and are cutting the recline.
Want the luxury of choosing your seat? Ok and pay at the cashier on your wait out.


But you know what? I must be dreaming all of this and must be the only one to see what's going on.
I'm going to stop wasting my time on it and let the BA frequent flyers speak:

I have been a member of British Airways Future Lab for over four years. This is the British Airways method for obtaining detailed feedback from customers. It is done via a special website and a series of questions we members answer every week. It appears most of the members are, like me, Gold Card holders. These are the 20% of customers who provide 80% of British Airways’ revenue.

Over the last few months I have noticed a trend in the comments on Future Lab. Many are frustrated that British Airways does not seem to pay any attention to what we say and takes no action on our suggestions. This is despite that, from reading the comments, it is clear that members of Future Lab want British Airways to be successful and make the airline competitive, improving and to have an excellent customer experience.

And it is not just the customers that are unhappy. Currently about 58 cabin crew are resigning at Gatwick every month; this is not sustainable.


So here are a few messages for Messrs Cruz and Walsh.

Firstly, Mr Cruz, resign. It happened on your watch, do the honourable thing get out of the way and let somebody who really understands how to run a full-service airline take on the job
Mr Walsh: find Cruz’s replacement from a decent airline; I recommend Cathay, Singapore or Emirates. If not, do what Apple did and go to a top-class hotel chain. They know how to create a branded customer experience.
Stop trying to compete with the low-cost airlines; as I have said many times on Future lab: THEY ARE NOT YOUR COMPETITION! Lufthansa, Cathay, Finnair, Qatar, Emirates, Singapore, United, Delta and Etihad are.
Switch all of the energy that you currently devote to cost-cutting into reduction of any errors, waste and rework that is destroying the BA branded customer experience. Singapore Airlines is the best example of doing this but, if you cannot attract anyone from them, go to Nissan in Sunderland. They know how to reduce failure demand; that is demand on the system caused by failure (often called rework or doing it right the second time when you got it wrong the first time). The average organisation has 35% re-work, and cutting that delights customers, employees and shareholders. It also increases loyalty and profits.
Take a rigorous and very detailed look at the way you select, train, lead and subsequently develop your people. Focus selection on the right attitudes required to deliver the customer experience which itself is about 70% related to people and 15% to do with the product. Put in place lean methods for continuous improvement of the customer experience. The new Chief Executive needs to follow Sir Colin’s example and attend every training program to demonstrate how important they are to him.
Take a leaf out of Ryanair’s book: bring all of your information systems in-house and have at least three back-up systems in different countries so that if one goes down you have a failsafe back-up. Don’t outsource it to India or to Spain, it is far too important to do that.
Stop cutting the customer experience. Get rid of the Marks & Spencer’s food and paying for it, you are not the ghastly Ryanair and should be moving in the opposite direction to the lightweight O’Leary. Then really make a very big deal about free baggage, free food and drink, easy-to-get-to airports and genuine service offering as in “To Serve To Fly”. Make your customer experience the centre of your differentiated service offering. Don’t copy, differentiate!
Re-train all of your customer-facing staff and make the training mandatory and assessed. Get rid of some of the old deadwood (and goodness me there is plenty of it) and enhance the customer engagement with newly selected and properly trained staff. I’ve only ever handed out two Golden Tickets and one of them was to a ground crew person who sorted my lost baggage. Make properly paid people the focus and the gathering of customer feedback the two issues that you pay attention to at the highest level. Do not focus on satisfaction but on the performance against what your customers expect. Satisfaction is an idea beyond its sell-by date. Oh and for goodness sake pay them properly! If you would like to know more about how to do this then click here
Engage much more at CEO level with British Airways Future Lab. Invite us to come and talk to you, in-depth and often. Bring us into your closest decision-making, listen to what we say carefully, act on it and go on using us. We are willing to do it for you providing that you engage with us.
Don’t outsource your call centres! They are critical to your customer experience and should be run by well-paid and well-motivated BA employees not by some people who do not understand your culture or how to delight your customers.
Do that and you will have, just possibly, a chance to recover from this disaster.
Fail to do so and Sir Colin will continue to spin in his grave


https://cmistrategy.com/british-airways ... ses-costs/
 
Waterbomber2
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Re: Package of new/used A380's pitched to BA was uncompetitive: Cruz

Thu Apr 18, 2019 7:52 pm

As some seem to be insisiting that I'm making this all up, a few more posted on Tripadvisor no earlier than today:

Reviewed today via mobile
The worst service on a flight EVER
Our flight out was great, food delicious, nothing was too much trouble etc.
On the flight home the plane was old and uncomfortable. The seats were small, the film choice was poor, the screen was tiny, the sound worked intermittently.
The crew were sharp and unhelpful, it felt like they wanted to rush us all to sleep so they could do nothing.
We had choice of fish or chicken and when I asked how they were cooked I was greeted with I DON’T KNOW. No attempt to find out despite people eating in front of us. I opted for the chicken which was the last one. My husband didn’t fancy reheated fish so he wisely opted for an economy meal which was equally disgusting as mine. My tray wasn’t working so I was balancing it on my legs which wasn’t easy in such a confined space with a bad and extremely painful leg. When I asked crew if they could take my tray I got snapped at and told to wait.
We were only offered orange juice on arrival instead of wine/fizz.
The tea was stewed and bitter and the ‘milk/cream’ was synthetic and disgusting. I can’t say one good thing about this flight which ended with me getting food poisoning and I was sick for 6 days.
On contacting BA my husband and I were offered an e-voucher for £50 each towards our next holiday which had to be used within a year. I told them to stuff it!
First time travelling with BA and we won’t be doing it again, back to Virgin where they treat you properly.
We paid a lot of money for our holiday and a lot of money to book our seats and I have to say the flight home ruined our holiday. NEVER AGAIN! Terrible service and even worse customer service. If you are going to ring someone to apologise, just make sure they can actually speak understandable English!


Downhill all the way
An airline gradually going downhill in my opinion. Check ins are usually very efficient and there are always ground crew to ask and answer any queries. On board it is different matter. The flight attendants are professional and polite and work hard to keep the whole plane happy. The in flight entertainment was poor and very limited for this long two-leg journey (short stopover in Antigua) Despite being in Premium Economy the seat comfort isnt good; the meals were diabolical. One chicken breast offering was impossible to cut - it was as hard as the thickest shoe leather! Snacks are miniscule. Drink offerings are plentiful and varied. Lukewarm tea and coffee. Duty free on board offers a poor selection.

Never again unless there is no other choice or I can afford to fly biz class.


Reviewed today
Dreadful flight to Johannesburg
Flight BA055 Monday 4th March 2019. My husband and I paid £64 each to book our seats in advance, seat numbers 75A & 75B on the upper deck of the airbus A380. Additionally we paid £31 to upgrade our onboard meals- my husband ordered a "Taste of Britain" meal and I went for "The Healthy Option".
My husband's meal was fine - but mine was a long way from "Healthy"! Within a short period of time I suffered severe stomach and groin pains. After my fifth visit to a toilet a steward asked "Are you O.K.?" - to which I replied that I was not and asked for a glass of water. So busy was the steward seeing to her facial makeup that the water never arrived.Towards the end of the flight another steward came to my husband and wrote down details of my physical reaction to my meal.The next three days of my holiday in South Africa were ruined before I fully recovered. On the 18th March, on my return to U.K., I wrote to BA with my complaints and requested reimbursement of what I paid for my "Healthy" option meal together with compensation for the agony that I suffered during the early part of my holiday. I received a prompt response from BA -"Thank you, we are on the case". I emailed the details they requested three times and spoke with a gentleman who assured me that the matter would be dealt with in the next 7-10 days. Despite several recent efforts on my part to contact a member of the BA customer relations team, I am still more than four weeks later, awaiting any sort of response from them.


Reviewed yesterday via mobile
Britain's National Airline
Britain, one of the worlds supposed leading economies, cultural centre and historical global leader in modern day science and technology. Yet, when it comes to its very own national airline, cannot compete nor compare with most other national airlines. I fly regularly with various airlines throughout the world, including nations considered 'third world' or 'developing'. Nations that look towards Great Britain as an example of superiority and trend setting. But these nations have airlines that provide a far better service and standard that BA can seemingly only hope to provide. A free meal, a free drink, on board entertainment, is standard for many airlines these days, including short haul flights! Yet BA (Bloody Awful), provides none of these. Do I really live in a country so behind the times that I am ashamed of the services it provides? Yes! BA... understand you are not a budget airline, understand you are Great Britains shining fleet in the skies, understand you have an example to make. So make it!


https://www.tripadvisor.com/ShowUserRev ... World.html


There are many ways for an airline to maximise earnings.
Having aircraft with a low unit cost is just one of the many possible strategies.
An A380 configured in the same density as a B787 or B777 would have a 11-abreast ecoomy class. It is possible.
The fact is though that the A350 and A380 can offer much more comfortable products while matching the unit cost of a densely configured B787 or B777.
How they can achieve this? Well first of all, the dense configurations p*ss off 100% of the passengers while only adding about 10% of capacity. That added capacity will only serve the airline when it is converted in additional revenues. But airlines like JAL are converting their low density superior products into additional revenues by being able to command higher fares and still fill their aircraft.

The unit cost is the same whether you carry 180 pax in a 200-seat B789 or in a denser 250-seat B789.
But guess which option will better maximise returning business?

In the wider market, if the daily demand for a given route is 2500 seats, do you maximise that potential with a comfy 200-seat B789 being able to command the highest yields, an uncomfy 250-seat B789 being at the mercy of the lowest yields and competition, or a comfy 550-seat A380 that offers you a combination of reasonable yields and volume?
BA can't match the lowest bidders on price and they won't be able to keep commanding higher yields for their poor and deteriorating product. Eventually, they will reach the tipping point where enough people talk about it that this will catch up to them, afecting both yields and volume.
 
mcg
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Re: Package of new/used A380's pitched to BA was uncompetitive: Cruz

Thu Apr 18, 2019 9:35 pm

Seems to me the people best equiped to evaluate the economics and operation of the A380 are the staff of airlines that have operated the machine for a number of years, airlines like LH, AF, SQ, BA and EK. None of them are interested in expanding their fleets of A380 and most are actively shrinking their A380 fleet. It's also interesting that only one of the 5 (I think) A380's that have entered the aftermarket have found a home. Actions speak louder than words.
 
Arion640
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Re: Package of new/used A380's pitched to BA was uncompetitive: Cruz

Thu Apr 18, 2019 10:30 pm

mcg wrote:
Seems to me the people best equiped to evaluate the economics and operation of the A380 are the staff of airlines that have operated the machine for a number of years, airlines like LH, AF, SQ, BA and EK. None of them are interested in expanding their fleets of A380 and most are actively shrinking their A380 fleet. It's also interesting that only one of the 5 (I think) A380's that have entered the aftermarket have found a home. Actions speak louder than words.


To be fair - EK are growing their fleet for a short period of time and BA will continue to hold theirs.
223 319 320 321 333 346 359 388 733 73G 738 744 752 753 763 764 772 77E 773 77W 788 789 MD83 E145 E175 E195 RJ85 F70 DH8C DH8D AT75

Brexit - It’s time for global Britain.
 
9Patch
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Re: Package of new/used A380's pitched to BA was uncompetitive: Cruz

Fri Apr 19, 2019 12:58 am

Arion640 wrote:

To be fair - EK are growing their fleet for a short period of time and BA will continue to hold theirs.

Didn't EK just cancel 39 A380s?
 
9Patch
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Re: Package of new/used A380's pitched to BA was uncompetitive: Cruz

Fri Apr 19, 2019 1:03 am

eurotrader85 wrote:
The future will show us if they have chosen right. Pushing Pax to other hubs, allowing others who have the ability to add capacity to take market share, while BA moves to a more supply restricted O&D model leveraging off its dominant slot portfolio giving it greater yield.

Their 787s and A350s will allow them to bypass hub to hub, offering more direct service.
If that leads to supply restrictions it's a feature not a bug--planes that are easier to fill, resulting in higher yields.
 
moa999
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Re: Package of new/used A380's pitched to BA was uncompetitive: Cruz

Fri Apr 19, 2019 1:18 am

9Patch wrote:
Arion640 wrote:

To be fair - EK are growing their fleet for a short period of time and BA will continue to hold theirs.

Didn't EK just cancel 39 A380s?
Yes but EK (and ANA with 2) still have a bunch of A380 deliveries left (it's a fairly lengthy supply chain)
 
Waterbomber2
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Re: Package of new/used A380's pitched to BA was uncompetitive: Cruz

Fri Apr 19, 2019 3:31 am

9Patch wrote:
eurotrader85 wrote:
The future will show us if they have chosen right. Pushing Pax to other hubs, allowing others who have the ability to add capacity to take market share, while BA moves to a more supply restricted O&D model leveraging off its dominant slot portfolio giving it greater yield.

Their 787s and A350s will allow them to bypass hub to hub, offering more direct service.
If that leads to supply restrictions it's a feature not a bug--planes that are easier to fill, resulting in higher yields.




Tell us exactly how the smaller aircraft will result in higher yields, in a broad market with endless competition and a deteriorating product/brand image?
This only works if you have the best product and can hope to swallow the cream of the market.

Do you expect BA to capture the best part of the market with a poor product, just because they have fewer seats to fill and their name is British Airways?
It can work for a while especially soon after downgrading from a larger aircraft, but it does not last forever.
 
9Patch
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Re: Package of new/used A380's pitched to BA was uncompetitive: Cruz

Fri Apr 19, 2019 4:35 am

Waterbomber2 wrote:
[
Tell us exactly how the smaller aircraft will result in higher yields...

Because you don't have to fly a bunch of empty seats or heavily discount to fill those seats.
Also, people are willing to pay more for direct flight, you can leave the Birkenstock granola crunching crowd for the discount airlines.
 
Antarius
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Re: Package of new/used A380's pitched to BA was uncompetitive: Cruz

Fri Apr 19, 2019 6:33 am

Waterbomber2 wrote:
9Patch wrote:
eurotrader85 wrote:
The future will show us if they have chosen right. Pushing Pax to other hubs, allowing others who have the ability to add capacity to take market share, while BA moves to a more supply restricted O&D model leveraging off its dominant slot portfolio giving it greater yield.

Their 787s and A350s will allow them to bypass hub to hub, offering more direct service.
If that leads to supply restrictions it's a feature not a bug--planes that are easier to fill, resulting in higher yields.




Tell us exactly how the smaller aircraft will result in higher yields, in a broad market with endless competition and a deteriorating product/brand image?
This only works if you have the best product and can hope to swallow the cream of the market.

Do you expect BA to capture the best part of the market with a poor product, just because they have fewer seats to fill and their name is British Airways?
It can work for a while especially soon after downgrading from a larger aircraft, but it does not last forever.


Yawn. Perfect storm of BA doing well and your beloved a380 losing and it's all facts out the window. Here you go, nice and slow-

BA. Is. Not. Losing. The. London. Market. At. All. Repeating. It. Will. Not. Make. It. True.
2019: SIN HKG NRT DFW IAH HOU CLT LGA JFK SFO SJC EWR SNA EYW MIA BOG LAX ORD DTW OAK PVG BOS DCA IAD ATL LAS BIS CUN PHX OAK SYD CVG PHL MAD ORY CDG SLC SJU BQN MHT YYZ STS BIS DOH BLR KTM MFM MEX MSY BWI DEN
 
Waterbomber2
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Re: Package of new/used A380's pitched to BA was uncompetitive: Cruz

Fri Apr 19, 2019 7:01 am

9Patch wrote:
Waterbomber2 wrote:
[
Tell us exactly how the smaller aircraft will result in higher yields...

Because you don't have to fly a bunch of empty seats or heavily discount to fill those seats.
Also, people are willing to pay more for direct flight, you can leave the Birkenstock granola crunching crowd for the discount airlines.


Ah yes, the one-stop granola crunching poor lads filling the 6 daily EK, 3-4 daily EY and twice daily QR A380 first and business class seats out of LHR.

We all pray for them to overcome their misery so they can afford a ticket on BA's marvelous ultra-premium, ultra-cozy direct flights.


The latest rumors are that all airlines except BA are flying banana's on their first and business class seats in and out of LHR, just to get some revenue out of them.
 
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seabosdca
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Re: Package of new/used A380's pitched to BA was uncompetitive: Cruz

Fri Apr 19, 2019 8:01 am

Waterbomber2 wrote:
Do you expect BA to capture the best part of the market with a poor product, just because they have fewer seats to fill and their name is British Airways?
It can work for a while especially soon after downgrading from a larger aircraft, but it does not last forever.


If BA captures the best part of the London market, the reason is because it has the flexibility to increase frequency in the highest-yielding markets while everyone else has to pay hundreds of millions for slots to do so.

Guess what helps make increasing frequency less risky? Smaller aircraft.
 
David_itl
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Re: Package of new/used A380's pitched to BA was uncompetitive: Cruz

Fri Apr 19, 2019 8:02 am

9Patch wrote:
eurotrader85 wrote:
The future will show us if they have chosen right. Pushing Pax to other hubs, allowing others who have the ability to add capacity to take market share, while BA moves to a more supply restricted O&D model leveraging off its dominant slot portfolio giving it greater yield.

Their 787s and A350s will allow them to bypass hub to hub, offering more direct service.
If that leads to supply restrictions it's a feature not a bug--planes that are easier to fill, resulting in higher yields.


Yep, BA wold prefer to have 2 or 3 passengers paying £5000 rather then 15 to 20 paying £1250. The mantra being "to grow is to carry fewer and fewer passengers at higher and higher prices", As for bypassing hub to hub, I look forward to you announcing BA operating MAN-BOM. I forgot. They operate out of LHR which seems to have escaped your attention is a hub airport and hence they operate hub--spoke or hub-hub. Not for BA is non-hub to non-hub


Is it Airbus's fault the BA are seemingly going to have approx 50 seats less in their 77X compared to the A380? Remind me..which aircraft is certificated for over 850 passengers?
 
Waterbomber2
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Re: Package of new/used A380's pitched to BA was uncompetitive: Cruz

Fri Apr 19, 2019 8:13 am

seabosdca wrote:
Waterbomber2 wrote:
Do you expect BA to capture the best part of the market with a poor product, just because they have fewer seats to fill and their name is British Airways?
It can work for a while especially soon after downgrading from a larger aircraft, but it does not last forever.


If BA captures the best part of the London market, the reason is because it has the flexibility to increase frequency in the highest-yielding markets while everyone else has to pay hundreds of millions for slots to do so.

Guess what helps make increasing frequency less risky? Smaller aircraft.


So if other airlines are willing to pay hundreds of millions for LHR slots, one has to wonder how much more profitable BA could be if they had a bigger piece of the market.
Shouldn't BA buying those slots if it makes so much sense to increase frequencies with smaller aircraft?
Or is it like BA can get some slots in the fall if they sow the seeds in the spring?
 
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seabosdca
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Re: Package of new/used A380's pitched to BA was uncompetitive: Cruz

Fri Apr 19, 2019 8:42 am

Waterbomber2 wrote:
So if other airlines are willing to pay hundreds of millions for LHR slots, one has to wonder how much more profitable BA could be if they had a bigger piece of the market.
Shouldn't BA buying those slots if it makes so much sense to increase frequencies with smaller aircraft?
Or is it like BA can get some slots in the fall if they sow the seeds in the spring?


BA already has more slots than it has profitable long-haul markets. It has more than half the slots at the airport, and can convert a short-haul slot to long-haul any time it can identify a sufficiently profitable market. No spending of hundreds of millions would necessary for a long time for BA to expand long-haul frequency in key markets. And the size of the 777X order strongly suggests it is planning to do so Depending on how you count, the 777X order is growing the fleet by 5 to 8 aircraft, assuming no moving up of retirements.
 
9Patch
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Re: Package of new/used A380's pitched to BA was uncompetitive: Cruz

Fri Apr 19, 2019 10:53 am

David_itl wrote:
Is it Airbus's fault the BA are seemingly going to have approx 50 seats less in their 77X compared to the A380? Remind me..which aircraft is certificated for over 850 passengers?

BA's 77X will have only 50 fewer seats than their A380?
Wow! In that case ordering the 77X was the obvious choice
 
Arion640
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Re: Package of new/used A380's pitched to BA was uncompetitive: Cruz

Fri Apr 19, 2019 11:18 am

9Patch wrote:
David_itl wrote:
Is it Airbus's fault the BA are seemingly going to have approx 50 seats less in their 77X compared to the A380? Remind me..which aircraft is certificated for over 850 passengers?

BA's 77X will have only 50 fewer seats than their A380?
Wow! In that case ordering the 77X was the obvious choice


Yes but with a lot less J.
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emiratesdriver
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Re: Package of new/used A380's pitched to BA was uncompetitive: Cruz

Fri Apr 19, 2019 11:39 am

Waterbomber2 and friends, how about getting this through your heads, the 380 is a dead duck in terms of its appeal to BA, simple really. When I talk to the line engineers and heavy maintenance engineers about the 380, they all say the same things, it’s poorly built and requires a lot of extra unplanned work in comparison to previous Airbus aircraft and Boeing’s.
The upshot of this is that even my employer are looking for the exit sooner rather than later as in EK service the 380 has always been at best revenue neutral...and latterly calamitous with respect to fuel burn and expense v revenue.
Within EK flight Ops it is now no longer denied that the numbers of 380s in EK service are a problem, the stated intent in the last 6 months is all about fuel saving and utilisation rather than expansion and capacity.
Face facts, the 380s economics never really stacked up in the real world, it’s worth observing as well that little Timmy the 380s biggest fanboy has been noticeably quieter in recent times.
 
9Patch
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Re: Package of new/used A380's pitched to BA was uncompetitive: Cruz

Fri Apr 19, 2019 2:50 pm

Yes but with a lot less J.

But apparently enough for BA.
 
JayinKitsap
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Re: Package of new/used A380's pitched to BA was uncompetitive: Cruz

Fri Apr 19, 2019 3:39 pm

9Patch wrote:
Waterbomber2 wrote:
[
Tell us exactly how the smaller aircraft will result in higher yields...

Because you don't have to fly a bunch of empty seats or heavily discount to fill those seats.
Also, people are willing to pay more for direct flight, you can leave the Birkenstock granola crunching crowd for the discount airlines.


A good example of this is Alaska (AS), they are the only with directs from Seattle to Boston, Miami and other East Coast cities. The direct flight often costs $200 or more than the 1 stops. They fill the plane, fly it the least amount of miles, save a cycle and the mid stop airport fees. So less cost and more revenue, the way to profits.
 
JayinKitsap
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Re: Package of new/used A380's pitched to BA was uncompetitive: Cruz

Fri Apr 19, 2019 3:58 pm

emiratesdriver wrote:
Waterbomber2 and friends, how about getting this through your heads, the 380 is a dead duck in terms of its appeal to BA, simple really. When I talk to the line engineers and heavy maintenance engineers about the 380, they all say the same things, it’s poorly built and requires a lot of extra unplanned work in comparison to previous Airbus aircraft and Boeing’s.
The upshot of this is that even my employer are looking for the exit sooner rather than later as in EK service the 380 has always been at best revenue neutral...and latterly calamitous with respect to fuel burn and expense v revenue.
Within EK flight Ops it is now no longer denied that the numbers of 380s in EK service are a problem, the stated intent in the last 6 months is all about fuel saving and utilisation rather than expansion and capacity.
Face facts, the 380s economics never really stacked up in the real world, it’s worth observing as well that little Timmy the 380s biggest fanboy has been noticeably quieter in recent times.


Quite interesting! Some questions:
1 The extra unplanned maintenance - on structure or like access panels, or devices, or in its systems.
2 On EK's birds, is there a big variation from the early to later planes.
3. Are there issues with the 5,000 psi hydraulics vs the far more common 3,000 psi hydraulics?

Why I note access panels comes from my experience with doors on buildings, the standard door is a no brainer, but get to a 5' x 10' door the hinges become massive, the frame is stout, the door weighs a ton, and they always need adjustment.

Do the RR trents handle the sandy environment as well as the EA engines?

I am sure BA figured in their maintenance costs in the review of what to purchase next.

To those whining about buying local. That is great to do, but once the cost to go local adds 5% or more, the economics have to over rule. Is it a government requirement that all planes in the UK are to be Airbus with RR engines. Why is it OK for AF to buy GE engines on 777's instead of RR engines. Isn't that a choice of the purchaser that is trying to make money on its investment.
 
Arion640
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Re: Package of new/used A380's pitched to BA was uncompetitive: Cruz

Fri Apr 19, 2019 5:02 pm

Waterbomber2 wrote:
9Patch wrote:
Waterbomber2 wrote:
[
Tell us exactly how the smaller aircraft will result in higher yields...

Because you don't have to fly a bunch of empty seats or heavily discount to fill those seats.
Also, people are willing to pay more for direct flight, you can leave the Birkenstock granola crunching crowd for the discount airlines.


Ah yes, the one-stop granola crunching poor lads filling the 6 daily EK, 3-4 daily EY and twice daily QR A380 first and business class seats out of LHR.

We all pray for them to overcome their misery so they can afford a ticket on BA's marvelous ultra-premium, ultra-cozy direct flights.


The latest rumors are that all airlines except BA are flying banana's on their first and business class seats in and out of LHR, just to get some revenue out of them.


Flying Bananas, please explain.
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9Patch
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Re: Package of new/used A380's pitched to BA was uncompetitive: Cruz

Fri Apr 19, 2019 6:05 pm

David_itl wrote:
As for bypassing hub to hub, I look forward to you announcing BA operating MAN-BOM. I forgot. They operate out of LHR which seems to have escaped your attention is a hub airport and hence they operate hub--spoke or hub-hub.

It seems to have escaped your attention that Airbus is terminating the A380 program after selling only 251 of them over a 19 year period.
What does that tell you?
 
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Springbok743
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Re: Package of new/used A380's pitched to BA was uncompetitive: Cruz

Fri Apr 19, 2019 6:21 pm

Arion640 wrote:
Flying Bananas, please explain.


He's being sarcastic about the level of service BA offer versus the Middle-Eastern 3, with his point being people prefer EK Hub flights with good Business/First class over BA's outdated offerings.
A fair point too, as their Tickets also manage to be often cheaper than BA too.

"Flying Bananas'' just meant they are flying with no passengers, so their filling seats with other things to fake load factors. It was a sarcastic comment, as they consistently have pretty respectable Load factors, especially given their 380 versus the BA 789
 
ScottB
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Re: Package of new/used A380's pitched to BA was uncompetitive: Cruz

Fri Apr 19, 2019 8:17 pm

Waterbomber2 wrote:
The reality though is that yesterday I was booking a flight to Japan and had BA as a very plausible option. Guess what, I paid 3% more to fly JAL because I'll be getting a 8-abreast B787 on the way out, and a 9-abreast B77W with the most comfortable Y seats on the way back.


Great anecdote, because it illustrates EXACTLY why that extra comfort unfortunately doesn't pay the bills. An economy seat in an 8-abreast 787 is going to cost ~12% more to offer than one in a 9-across 787, and similarly a Y seat in a 9-abreast 777 will cost ~11% more in direct operating costs than one in a 777 with 10-across seating. You paid 3% more; in other words, not enough to compensate for the higher cost of the more comfortable seat. Good bargain-hunting on your part but not great for the airline.

Waterbomber2 wrote:
An A380 configured in the same density as a B787 or B777 would have a 11-abreast ecoomy class. It is possible.


But BA doesn't want 11-abreast economy in its A380s because those extra seats would be filled with bargain-basement fares for much of the year if they could even be filled at all.

Waterbomber2 wrote:
In the wider market, if the daily demand for a given route is 2500 seats, do you maximise that potential with a comfy 200-seat B789 being able to command the highest yields, an uncomfy 250-seat B789 being at the mercy of the lowest yields and competition, or a comfy 550-seat A380 that offers you a combination of reasonable yields and volume?


The demand isn't simply for 2,500 seats daily (and there are only a handful of markets globally with this demand, with few being long-haul). It might be for 2,500 seats at a price above the break-even, but that demand is also stratified into a nearly continuous curve of differing price levels. Some will be willing to pay $10,000, some $1,000, and some $250. The airline's goal is to capture as much practically possible of the value under the curve and that's the purpose of modern revenue management systems. If BA's revenue management team does their job properly, they very well might capture 250 of the top 400 fares sold on a 789 versus 550 of the top 800 by offering the A380. Those top 250 are going to be much-much higher-yielding than the subsequent 300 they'd need to fill the A380. With similar unit costs, the 789 turns in much higher margins for the airline with less exposure to losses in the low season.

And when you've got the dominant slot portfolio at a constrained airport like LHR, being able to offer 2 787s with better schedule flexibility is also going to enhance yields versus a single A380.
 
EvanWSFO
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Re: Package of new/used A380's pitched to BA was uncompetitive: Cruz

Fri Apr 19, 2019 8:47 pm

[quote="Waterbomber2"]As some seem to be insisiting that I'm making this all up, a few more posted on Tripadvisor no earlier than today:

If I booked my flights based on TripAdvisor (or any ratings site), I'd never fly. There will ALWAYS be disgruntled pax on EVERY airline. Perhaps you should grow up and spend more time doing something productive than making an a** of yourself on here.
I have been on this site 15 years. A unrecoverable email account led me to starting over. Those of you who call me a rookie, you may stop ok?
 
Antarius
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Re: Package of new/used A380's pitched to BA was uncompetitive: Cruz

Fri Apr 19, 2019 9:15 pm

9Patch wrote:
David_itl wrote:
As for bypassing hub to hub, I look forward to you announcing BA operating MAN-BOM. I forgot. They operate out of LHR which seems to have escaped your attention is a hub airport and hence they operate hub--spoke or hub-hub.

It seems to have escaped your attention that Airbus is terminating the A380 program after selling only 251 of them over a 19 year period.
What does that tell you?


Clearly, that we are all idiots incapable of recognizing greatness
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BAWLGW
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Re: Package of new/used A380's pitched to BA was uncompetitive: Cruz

Fri Apr 19, 2019 10:00 pm

The A380 is dead. Get over it and move on people.

British Airways IS making money, lots of it, and passenger numbers are increasing.
 
Waterbomber2
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Fri Apr 19, 2019 10:58 pm

ScottB wrote:
Waterbomber2 wrote:
The reality though is that yesterday I was booking a flight to Japan and had BA as a very plausible option. Guess what, I paid 3% more to fly JAL because I'll be getting a 8-abreast B787 on the way out, and a 9-abreast B77W with the most comfortable Y seats on the way back.


Great anecdote, because it illustrates EXACTLY why that extra comfort unfortunately doesn't pay the bills. An economy seat in an 8-abreast 787 is going to cost ~12% more to offer than one in a 9-across 787, and similarly a Y seat in a 9-abreast 777 will cost ~11% more in direct operating costs than one in a 777 with 10-across seating. You paid 3% more; in other words, not enough to compensate for the higher cost of the more comfortable seat. Good bargain-hunting on your part but not great for the airline.

Waterbomber2 wrote:
An A380 configured in the same density as a B787 or B777 would have a 11-abreast ecoomy class. It is possible.


But BA doesn't want 11-abreast economy in its A380s because those extra seats would be filled with bargain-basement fares for much of the year if they could even be filled at all.

Waterbomber2 wrote:
In the wider market, if the daily demand for a given route is 2500 seats, do you maximise that potential with a comfy 200-seat B789 being able to command the highest yields, an uncomfy 250-seat B789 being at the mercy of the lowest yields and competition, or a comfy 550-seat A380 that offers you a combination of reasonable yields and volume?


The demand isn't simply for 2,500 seats daily (and there are only a handful of markets globally with this demand, with few being long-haul). It might be for 2,500 seats at a price above the break-even, but that demand is also stratified into a nearly continuous curve of differing price levels. Some will be willing to pay $10,000, some $1,000, and some $250. The airline's goal is to capture as much practically possible of the value under the curve and that's the purpose of modern revenue management systems. If BA's revenue management team does their job properly, they very well might capture 250 of the top 400 fares sold on a 789 versus 550 of the top 800 by offering the A380. Those top 250 are going to be much-much higher-yielding than the subsequent 300 they'd need to fill the A380. With similar unit costs, the 789 turns in much higher margins for the airline with less exposure to losses in the low season.

And when you've got the dominant slot portfolio at a constrained airport like LHR, being able to offer 2 787s with better schedule flexibility is also going to enhance yields versus a single A380.


You are assuming that I was booking the lowest price option.
LOT was offering the same itinerary for about 20% less than JAL and 16% less than BA.
JAL was able to sell me their better product despite that I pay a fair bit more than the lowest offering. BA was clearly not even if they offered arrival and departure to/from HND. JAL only offered me a departure from HND.

BA is trying to command almost the same fare as JL, but it didn't work.

Yield management can only work with what they have.
Selling rubbish at the price of gold works for a while, but BA is in a market where competition is able to offer a better product at a lower price.
Smaller aircraft will work for BA assuming that they can keep selling rubbish at the price of gold.
I assure you that it won't last forever.

BA will be fine for the next few years.
By the time that the B777X start flowing in, I think that BA will be missing the A380 and the next managelment will be questioning this short-sighted move.
 
ScottB
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Re:

Fri Apr 19, 2019 11:21 pm

Waterbomber2 wrote:
You are assuming that I was booking the lowest price option.
LOT was offering the same itinerary for about 20% less than JAL and 16% less than BA.
JAL was able to sell me their better product despite that I pay a fair bit more than the lowest offering. BA was clearly not even if they offered arrival and departure to/from HND. JAL only offered me a departure from HND.


You bought a slightly higher-priced ticket on an airline with even higher unit costs. That's not really a win for JAL, especially if BA managed to sell that seat to someone else at the fare you saw (and they probably did). The fact that LO was even cheaper is irrelevant if you excluded them for other reasons.

Waterbomber2 wrote:
Selling rubbish at the price of gold works for a while, but BA is in a market where competition is able to offer a better product at a lower price.
Smaller aircraft will work for BA assuming that they can keep selling rubbish at the price of gold.


JAL isn't exactly a low-cost provider; they may be offering a lower price but I strongly doubt they have lower unit costs than BA. Whether or not the soft product is rubbish has just about zero to do with the specific aircraft they're using -- as you've observed comparing JL's 787s to BA's.

Smaller aircraft will work better for BA because the A380 doesn't offer better unit costs. Full stop. Smaller aircraft = fewer cheap seats to fill.
 
BA777FO
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Re: Package of new/used A380's pitched to BA was uncompetitive: Cruz

Sat Apr 20, 2019 12:40 am

Lots to cover here. Bear with me!

Waterbomber2 wrote:
To start from the top.
The B777X definitely doesn't have 70% parts commonality with the B787 and B77W.
Quote a source for this.
In the cockpit and some LRU's perhaps, but they won't even have the same windows or cabin furnishings.


They were from a slide a training FO showed me a couple of trips ago - I'll see if I can get hold of them and reproduce some of it here. But as I said, it was 70% parts, not 100% of the entire aeroplane, so yes, there will be some new stuff in it!

Waterbomber2 wrote:
The A350-1000 exceeds the B779's range and they have more crew rest facility options, including containerised solutions.


777X will carry 4 ULDs extra over the A350 (and B77W) - that's extra uplift, it'll carry more passengers than the A350 too. While in theory the range of the A350 8,000nm, in reality with a full payload and 20 tonnes of cargo it's much less. But BA doesn't really need that range anyway. That's why they've opted for no cabin crew rest - it's cheaper, allows extra seats (ie revenue) and the 777X is better at lifting a lot, further. I thought BA would have taken the cabin crew bunks after realising that not fitting them on the GE 777-200s was a mistake, but that's what they've done. I think the order was under Keith Williams' tenure thoufh, so you can't blame Alex for that one.

Waterbomber2 wrote:
There is no commonality between the GE90 and GE9X that I know of. That BA is already a GE customer is a pretty irrelevant fact when I'm mentionning the special relationship between BA and RR.
GE bid like hell to win the BA business on the GE90 back in 1991. Airbus were pretty pissed.


There doesn't need to be any commonality for engines. BA and RR may have had a special relationship but a) RR messed up with the 787 engines b) BA is not a charity for RR and c) BA's relationship with GE is much improved since the 77W introduction. So what's irrelevant is BA's relationship with RR, which arguably became too cosy. None of this is a reason to order a sub-par aircraft not suited your needs.

Waterbomber2 wrote:
Airbus and RR must be very very pissed about BA's order for B777X, almost 30 years after their orginal order for B777's.


So? Airbus should have worked harder to win the order, that's their fault, not BA's. Now Airbus knows in future it needs to be more competitive on product and/or price.

Waterbomber2 wrote:
British Airways has killed thousands of cutting edge British jobs with the B777X order, by denying Airbus their last hope for an A380 order and by not ordering the A350 with high British content.
Combined with the Brexit debacle, I think that there is no way that Airbus will include major workshare for a British company for their next design. At this point, it makes more sense to build wings in Japan, because Japan will guarantee orders and investments for workshare


Like I said, BA doesn't exist as a charity for RR or Airbus no more than Delta is obliged to buy GE or Boeing. It's utterly irrelevant. BA's board would be doing a disservice to shareholders if they opted for anything other than the best overall package. If that means GE and Boeing, as in the past, then so be it. You're really clutching at straws with this one.

Speedbird2155 wrote:
And to set the record straight, all of BA A350-1000s have the appropriate crew rest facilities.


They will come fitted with flight crew bunks but not cabin crew bunks - this has been confirmed internally. So that will limit the range although not to the extent of no bunks at all. Cabin crew can do up to a 16 hour FDP (so about a 14 hour sector, although in reality it'll never be planned that tight) with a Class 3 rest facility, which means blocking off seats in the cabin. It can cover most of the network, but not all of it.

Waterbomber2 wrote:
Perhaps Cruz can sell the 9 to 10-abreast conversion to investors as an upgrade, but you can't do that on airliners.net without being met with the appropriate criticism.
HND is still a 9-abreast B77W? How about in a few months? I'm not taking chances.
Personal electrical outlets have been an industry norm for almost a decade now. Glad to know that BA is catching up.
You can watch BBC live among a variety of live channels on a variety of airlines now, but not on BA.


Appropriate criticism? As I said, customer satisfaction scores related to the cabin are higher on the refreshed 777s than the unrefreshed ones - the seat is about 0.5" narrower, in reality most people don't notice, but they're happy that their typical family of four can now sit together instead of splitting across aisles or rows.

9-abreast 77W is here for quite a while yet - the RR 777-200ERs won't even be finished by year end 2019 so the 77Ws won't be done for quite some time. Live tv? Meh, most airlines charge for it anyway, don't they? I'd rather have wifi - streaming content will be the future of IFE, not live tv. You seem to be knocking BA's product without having tried it for yourself.

Waterbomber2 wrote:
T5 was a complete mess and still is. Too often you don't know your gate number until 40 minutes before your flight time and need to keep checking the screens. When you leave the lounge to get to your gate on time, you end up waiting another half hour because they can't seem to decide which aircraft to assign to your flight. Past the departure time, there is still no sign of boarding.


T5 a mess? The terminal that has won countless Skytrax awards? Hmm...

I've never had an issue with screens - but that's controlled by HAL, not BA. A last minute plane change is a big deal due to catering alone, so planes are not switched last minute unless operationally necessary due tech issues. To put it into perspective, having operated on the 777 for quite some years I've had one aircraft change within 2 hours of departure.

Waterbomber wrote:
BA have cut the short haul snack service for BOB. Shameful for pax who come off a long haul journey and just have gone through the misery of transferring at LHR.
BA have cut legroom and are cutting the recline.
Want the luxury of choosing your seat? Ok and pay at the cashier on your wait out.


BOB - pretty much what most airlines in Europe offer. There are some exceptions, but generally BOB is accepted and appreciated these days - people used to moan at only being given a snack of a cookie or small bag of crisps, now they can have a variety of sandwiches. Want a more substantial meal? BA offers Club Europe - so that option is still there if you want it.

Legroom and recline is on a par with most other European operators too.

As for choosing your seat, Silver and Gold Exec card holders (plus those travelling with infants) can choose their seat at the time of booking free of charge, meaning that those who spend the most with BA get first choice. Bronze members can select within 7 days od departure and anyone else who isn't an exec card holder can select for free 24/48 hours prior to departure. There's no requirement to pay. Again, this is also quite common among many other carriers.

Waterbomber2 wrote:
But you know what? I must be dreaming all of this and must be the only one to see what's going on.
I'm going to stop wasting my time on it and let the BA frequent flyers speak:


Anecdotal complaints...you'll always get a few. BA's net promoter score is nearing record highs. As for the comments from those in the Future Lab - thank goodness much of it is ignored, we'd be bankrupt if we followed half of that. It was mostly all tried and failed. Hence the need for a new direction. And as mentioned, it's not all been cuts, cuts, cuts. There's a new, highly competitive J seat, a new First seat is coming, arguably the best-in-the-sky bedding for J, new and more plentiful catering for all cabins, new WT+ seat, larger screens in WT, WT+ and Club, new and updated lounges, wifi, powerpoints and lots more. Don't insult people's intelligence by calling it just another Ryanair.

Waterbomber2 wrote:
The fact is though that the A350 and A380 can offer much more comfortable products while matching the unit cost of a densely configured B787 or B777.
How they can achieve this? Well first of all, the dense configurations p*ss off 100% of the passengers while only adding about 10% of capacity. That added capacity will only serve the airline when it is converted in additional revenues. But airlines like JAL are converting their low density superior products into additional revenues by being able to command higher fares and still fill their aircraft.


Except the A380's breakeven loadfactor is much higher due to higher trip costs. Like I said, a 777-9 will carry ~50 fewer passengers than an A380, carry 15+ tonnes more cargo and do it for half of the fuel (and almost half the cabin crew/half the cost of hotel rooms). Trip costs kill the A380. I've travelled a lot on 777s, I wouldn't call it uncomfortable any more than an A380 or A350. Everyone has their own personal preferences though. As has been repeated countless times, 10 abreast economy on 777s has been well received, the refreshed cabins are giving higher NPS scores across the board. And BA's loadfactor is going up with those densified aircraft. At Gatwick, due to the Monarch slots, BA increased ASK's by 20% and revenue by 22% - that's virtually unheard of in the industry to add so much capacity and improve your RPKs at the same time. If only Norwegian could have done that - then they'd turn a profit instead of losing it hand over fist.

Waterbomber2 wrote:
BA can't match the lowest bidders on price and they won't be able to keep commanding higher yields for their poor and deteriorating product. Eventually, they will reach the tipping point where enough people talk about it that this will catch up to them, afecting both yields and volume.


Correction: BA never used to be able to match the lowest bidders on price. However, now with NAPS closed, staff on market rate (or just below) contracts, efficient aircraft right-sized for the market, they often now compete well on price, even against Norwegian, easyJet and Delta. Given BA's new Club seat and high frequencies, as well as the enviable position at Heathrow, BA will be able to command high yields at the top end too. BA's passenger numbers and load factors are increasing month on month, year on year, so that'll need a lot of people to keep on talking!

Waterbomber2 wrote:
Tell us exactly how the smaller aircraft will result in higher yields, in a broad market with endless competition and a deteriorating product/brand image?...Do you expect BA to capture the best part of the market with a poor product, just because they have fewer seats to fill and their name is British Airways?


So there's demand to fill 469 seats over August bank holiday. That same demand doesn't on a Wednesday in November but guess what? If your aircraft has 469 seats in August it has 469 seats in November too! That loadfactor of 90% in August commands high yields but that loadfactor of even 85% in November is at bargain bucket prices. Heathrow, and London, are great aviation markets, but you can't fill an A380 on every flight. The trip costs of an A380 are crippling outside of peak travel periods. Flying 50 fewer people for virtually half the cost on a 777X is worth forgoing those 50 passengers for 1 month of the year to command the higher yield in the remaining 11.

As for poor product, really? I'm starting to wonder if you're a disgruntled former emoylee!

Waterbomber2 wrote:
Ah yes, the one-stop granola crunching poor lads filling the 6 daily EK, 3-4 daily EY and twice daily QR A380 first and business class seats out of LHR. 


Those 6 EK A380s are feeding into network of 100s of other flights, many of which, given London's geography and demand profile, don't necessarily lend themselves to direct services. BA is rock-solid on USA-Europe and USA-Middle East/India. Anything else, the geography tends to work against you. But how much money are Etihad and Qatar making? How well is working it out for them?! Unlike the Middle East Sheiks, BA is run to make a profit rather than being a vanity project.

seabosdca wrote:
BA already has more slots than it has profitable long-haul markets. It has more than half the slots at the airport, and can convert a short-haul slot to long-haul any time it can identify a sufficiently profitable market. No spending of hundreds of millions would necessary for a long time for BA to expand long-haul frequency in key markets. And the size of the 777X order strongly suggests it is planning to do so Depending on how you count, the 777X order is growing the fleet by 5 to 8 aircraft, assuming no moving up of retirements.


Spot on. BA has made lots of efficiencies to its slot portfolio and the work is still ongoing. That's why Heathrow has a lot of Wednesday afternoon and Saturday flights to places like Spain, Greek Islands and Canary Islands, which are going full, compared with a Dusseldorf or Frankfurt that at those times is half empty. The biggest restriction to adding more longhaul flights is a lack of airframes (and crew to fly them - BA has recruited record numbers of pilots 3 years in a row and that looks set to continue for some time to come) - the 787 engine issues haven't helped.

What has worked well lately is the foray into secondary markets with the B787-8 - Nashville, New Orleans, Pittsburgh, Charleston, Osaka, Durban, San Jose - all little to no competition and performing exceptionally well rather than simply adding loads of capacity to already mature markets. Austin sees the 747 now in the summer season, that's how successful it has been. As these markets mature they'll get 787-9s/777-200s and the 787-8s can go on opening new markets when necessary. That can't be done with a bunch of A380s, half of which get switched around every season because they don't know how to make it work outside of HKG, JNB and SIN. There's also LGW, as more A350s and B787-10s come in, that allows 777-200s to move to Gatwick to take advantage of ex-Monarch slots there. By 2023 I'd be surprised if Gatwick hasn't gone from 14 777s to 20 777s.

So back to the title of the thread, yes, the A350/A380 package wasn't competitive and it's not the right mix for BA's needs.
 
grbauc
Posts: 1445
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Re: Package of new/used A380's pitched to BA was uncompetitive: Cruz

Sat Apr 20, 2019 1:39 am

Waterbomber2 wrote:
seabosdca wrote:
Waterbomber2 wrote:
Because we don't take executives for their word, we are able to make our independent analysis to do a reality check.
Executives say things to match their own agenda. Those agenda's range from bribes (Airbus scandal anyone?), to excentric visions (Project Sunrise, Project "let's make BA a high fares LCC for short-term profits")


What do you think would be Cruz's reason for committing securities fraud here? Kickbacks from Boeing? That he is a secret Airbus hater, despite having billions of dollars of Airbus products on order? There are real consequences in multiple jurisdictions for saying things that aren't true to investors of a public company. I think it's more likely that Cruz is explaining accurately why BA made the decision it did.

If you look at the facts, the B777X is a brand new type in the BA fleet with little parts commonality with their B777 fleet to make it a selling point, too close in size and performance to justify running them along with the A350-1000's that are starting deliveries this year.
Considering IB will also have A350's, standardising on this aircraft type makes way more sense than the benefits of 2 or 3 additional rows of Y seats.


And yet all but one of the known 777X customers plan to operate them alongside the A350. It appears the customers and their green eyeshades have come to a different conclusion from yours: that the lightweight, long-ranged A350 and the heavy-lift 777X coexist quite nicely in a fleet plan.

The per unit sales price was probably lower than B777X.




Which, if true, just reinforces that operating costs of the A380 were a massive problem.

So it would have made more sense for BA to order a mix of RR A350/A380 instead of GE B777X's.


One expects that if this were true then they would have done so. They have a lot of expensive analysis going into fleet decisions.

The worst may be the implications for BA's relationship with RR. RR could really have used BA's order right about now, they must be p*ssed.


Being "p*ssed" about the loss of an order never helped anybody in the aerospace business. They will come back and try again. There is still a major opportunity, that I think is at least partly Airbus's to lose, in replacing the rest of BA's 772s. The 359 seems like the perfect replacement for the (large) part of the 772 fleet that flies farther than US East Coast or the Middle East.

The oddball is the B777X, this is why Cruz is feeling he needs to justify his choices...


The hard justification Cruz had to make wasn't to the public, it was to the IAG Board.



Airbus' sales team got away with bribing half the world to buy their aircraft... well almost, or perhaps they still will despite the ongoing "investigation".
Cruz is going to get away with what he's saying because yes, an interior refurb can cost 50 million if you plan on doing a lot of unneeded things. It's also too far-fetched for an investor to question a fleet decision 10 years down the line when the effects will be felt, because well, most investors won't hold stakes for that long.
For instance, QF's Alan Joyce is critical of the previous management's decision to purchase A380's, but no one is going to take the previous management's bonusses back, are they?

The IAG board is giving Cruz a free pass on everything. All he's doing is cut, cut, cut because cutting is always popular with investors. Nobody is going to take his bonus away for densifying the B777's, because it makes business sense, on paper.
The reality though is that yesterday I was booking a flight to Japan and had BA as a very plausible option. Guess what, I paid 3% more to fly JAL because I'll be getting a 8-abreast B787 on the way out, and a 9-abreast B77W with the most comfortable Y seats on the way back.
How do you quantify the revenues and earnings lost from passengers who decided to book elsewhere because of round after round of cuts to the product you offer? It's not quantifyable as long as your business is posting earnings and investors are seeing an ROI.
The hard questions are only asked when things get ugly.

If you replaced Cruz by a teddy bear, BA would probably post similar, if not better earnings.

You want to see BA stagnate and become a third tier airline? Then Cruz is your guy.
You want to see BA become a first tier airline again? Then you need new management with a vision and a growth strategy.

The 2008 financial crisis has taken BA from a 2008 EBIT of 922M GBP to a 2009 loss of 401 GBP.
This is how fast things can go downhill in this business. BA didn't have a single A380 in the fleet back then, it was all B777's and B747's with a few B767's on the way out. In fact, since the A380 is in the fleet, BA has posted record profits year after year.
Is it thanks to the A380 though or rather thanks to lower fuel prices? Probably the latter, but this shows that you can prove anything with numbers.


You just seem to know all and have all the answers.
 
Airlinerdude
Posts: 114
Joined: Tue Mar 30, 2010 3:07 am

Re: Package of new/used A380's pitched to BA was uncompetitive: Cruz

Sat Apr 20, 2019 2:46 am

Thanks BA777FO, that was a really detailed post.

When it comes down to the economics of the decision, the other fact of the matter is that LHR is not the sole gateway to London. There's four other airports, two of which (LGW and STN) still have a fair amount of capacity to offer to long haul airlines interested in flying to London. Pushing fares up too high by reducing capacity will only work to an extent before airlines start considering offering greater capacity to LGW or STN with cheaper fares. So in theory, BA will be able to boost yields by offering flights at a lower unit cost by going the way of the 779 versus the 380, however there's also the fact that yields will have an inflection point (like any other supply and demand equation) where unit revenues start to decrease as airlines offer cheaper alternatives to other London airports.

For that reason, the use of BA's 380s today might drastically change by the time the 779s begin arriving. Hypothetically speaking, if we saw United launch SFO/LGW, it's likely we'd see some drop in the unit revenue of BA's SFO/LHR just by the vary nature that there's greater capacity between two metro areas. At that point in time, it might make sense to reallocate that same 380 to an even greater slot restricted route, ie. LHR/JFK. (Yes, I am aware that BA's JFK terminal can't handle the 380)

I think in the long run, we'll likely see BA reallocate their 380s to the most slot restricted routes, like the aforementioned JFK route. Meanwhile, transport links in the London area will make each under-utilized London airport that much more accessible to the wider catchment area, lessening the demand to fly solely through LHR to reach London.

At the end of the day, it's a fun balancing act to watch. Going with 779s over 380s means fewer passengers being carried, but perhaps this is a longer-term strategy of preparing for a more segmented London catchment area.
 
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seabosdca
Posts: 6508
Joined: Sat Sep 01, 2007 8:33 am

Re: Package of new/used A380's pitched to BA was uncompetitive: Cruz

Sat Apr 20, 2019 3:28 am

Airlinerdude wrote:
I think in the long run, we'll likely see BA reallocate their 380s to the most slot restricted routes, like the aforementioned JFK route. Meanwhile, transport links in the London area will make each under-utilized London airport that much more accessible to the wider catchment area, lessening the demand to fly solely through LHR to reach London.


I'd put down a bottle of scotch that the A380 will never be the primary aircraft for JFK service. (Sure, it might operate one rotation here and there for utilization.)

JFK is driven by frequency and BA/AA will do whatever they have to to get as much frequency as they can on the route. The aircraft of the future on JFK is a 787-10 with an extreme premium configuration, or an A350-1000 on the outside.

At the end of the day, it's a fun balancing act to watch. Going with 779s over 380s means fewer passengers being carried, but perhaps this is a longer-term strategy of preparing for a more segmented London catchment area.


That assumes that you don't have more 779s. The existing order is already growing the BA longhaul fleet, and there's nothing saying BA can't order yet more longhaul aircraft if it finds opportunities for them. In fact, I'd be shocked if we didn't see a growth-oriented top-up order for either 787-10s or A350-1000s.
 
Airlinerdude
Posts: 114
Joined: Tue Mar 30, 2010 3:07 am

Re: Package of new/used A380's pitched to BA was uncompetitive: Cruz

Sat Apr 20, 2019 3:54 am

seabosdca wrote:
Airlinerdude wrote:
I think in the long run, we'll likely see BA reallocate their 380s to the most slot restricted routes, like the aforementioned JFK route. Meanwhile, transport links in the London area will make each under-utilized London airport that much more accessible to the wider catchment area, lessening the demand to fly solely through LHR to reach London.


I'd put down a bottle of scotch that the A380 will never be the primary aircraft for JFK service. (Sure, it might operate one rotation here and there for utilization.)

JFK is driven by frequency and BA/AA will do whatever they have to to get as much frequency as they can on the route. The aircraft of the future on JFK is a 787-10 with an extreme premium configuration, or an A350-1000 on the outside.


I think you might have read too much into my LHR/JFK example. What I meant was routes where airports at either end of the route are heavily slot restricted. HKG/DXB might be other examples.

That assumes that you don't have more 779s. The existing order is already growing the BA longhaul fleet, and there's nothing saying BA can't order yet more longhaul aircraft if it finds opportunities for them. In fact, I'd be shocked if we didn't see a growth-oriented top-up order for either 787-10s or A350-1000s.


That goes to reinforce the inference I was making. It's a balancing act, and it's all going to depend on future demand which is largely unknown to the BA. What we're discussing (at least that's what this thread is about) was the 779 order versus picking up used 380s - right now they've adopted a relatively conservative approach of ordering aircraft that have fewer seats than the 380. This means they'll have to option to match demand better, rather than committing themselves to 380s which they'd have to fill. It's impossible for BA to know the demand of people wanting to fly to LHR when other airports in the London area will likely segment some of this demand. If it turns out that demand is still concentrated on LHR, then yes they might place top-up orders for 779s/350s/78Ks, but they might also regret not having taken up used 380s.

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