Arion640
Posts: 2400
Joined: Fri Mar 31, 2017 5:15 pm

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

Sun Apr 14, 2019 1:58 pm

9Patch wrote:
Arion640 wrote:
It will depend if it’s in Y or Business. I much prefer a stop anyday if flying over 6 or 7 hours in Y.

To each his own. I can't see the logic of boarding, taking a coach seat, flying to some connection airport that may add more distance and time to your trip, de-boarding, waiting a couple of hours, going through the whole re-boarding process again to get into another coach seat, finally reaching your destination and de-boarding yet again.

Your six hour or seven hour trip is now nine or ten hours or likely even more. Add in the possibility of delays and missed connections, and it can turn into nightmare.


I can sorry - i’m grateful for the walk around. If there’s time for a shower in the connection airport I will. Helps me feel much more refreshed arriving at my destination.

Then again, if LHR-BKK was £400 return direct and £600 return one stop. I’d be taking the direct.
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.
 
User avatar
Revelation
Posts: 21414
Joined: Wed Feb 09, 2005 9:37 pm

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

Sun Apr 14, 2019 2:16 pm

Aither wrote:
No A380 and no more frequencies will mean more capacity and pricing pressure from competition. There is a strong value to be the dominant player on a market. The 100 additional seats of the A380 are used to kick off anybody trying to get your key O&D markets.

If it was such strong value, BA wouldn't have been rummaging through the bargain bins, they would have worked with EK to twist RR and Airbus's arms and do a proper T7000 style NEO back when they had the chance in 2014-6.

You do remember the time Airbus was saying they wanted to do an A380 NEO but would not do so just for EK, don't you?

All it would have taken IMHO was BA to commit to rolling over its A380 fleet to NEO and IMHO we'd still be seeing them made till circa 2025 or so.

The Airbus management of the time (Bregier et al) certainly did want to find a way to keep A380 alive till UltraFan could become a factor. :yes:

Yet the only way BA could make A380 pass muster was if they bought second hand models dirt cheap i.e. at scrap value, and no operator was ready to sell on those terms.

This is proof to me at least that the A380 really does not represent strong value to BA.

ElroyJetson wrote:
The A380 is an inefficient fuel guzzling dinosaur. This is particularly true with the advent of the 787, A350, and the 777X.

There is simply no solid business case for the A380 anymore. Folks, please, just let it go. Much like the 747 it's day has passed.

:checkmark:

Once the production line winds up several parts will never be made ever again and many parts will become much more expensive.

Adding used frames to a fleet that's out of production is just not a good long term move.

See our DL MD-90 thread for evidence of such.
Last edited by Revelation on Sun Apr 14, 2019 2:19 pm, edited 1 time in total.
Wake up to find out that you are the eyes of the world
The heart has its beaches, its homeland and thoughts of its own
Wake now, discover that you are the song that the morning brings
The heart has its seasons, its evenings and songs of its own
 
9Patch
Posts: 341
Joined: Wed Mar 13, 2019 10:38 pm

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

Sun Apr 14, 2019 2:17 pm

Arion640 wrote:
Then again, if LHR-BKK was £400 return direct and £600 return one stop. I’d be taking the direct.

LHR-BKK is 11 hours 40 minutes non-stop. That's nearly double your 6 hour limit for enduring coach.
 
Arion640
Posts: 2400
Joined: Fri Mar 31, 2017 5:15 pm

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

Sun Apr 14, 2019 3:00 pm

9Patch wrote:
Arion640 wrote:
Then again, if LHR-BKK was £400 return direct and £600 return one stop. I’d be taking the direct.

LHR-BKK is 11 hours 40 minutes non-stop. That's nearly double your 6 hour limit for enduring coach.


Going off topic now. So i won’t be continuing this discussion. Each to your own as you said.
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.
 
musman9853
Topic Author
Posts: 831
Joined: Mon May 14, 2018 12:30 pm

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

Sun Apr 14, 2019 4:31 pm

Bobloblaw wrote:
musman9853 wrote:
BA777FO wrote:



I have no idea what you're talking about. It's the strongest player in the Transatlantic market from the UK - growing in capacity and destinations served every year. KIX shows BA can carve out a niche in Asia too - the UK's geography simply doesn't lend itself to be a strong player the the Europe-Asia market. Kangaroo route yields have been trashed by the ME3's over capacity, BA is holding its own well on the LHR-SIN-SYD route.

BA is well equiped to make long term profits - the mix of 787s, 777X and A350s plus A320neos, an expanded LGW slot portfolio to exploit, competitive cost base and improving products shows BA will be a top player for years to come. Shunning more A380s may well prove to be one of its most shrewd decisions.


yeah, idk what he's talking about. especially considering the rumors american is gonna stop serving jfk-lhr on their own metal in favor of BA's jets. BA owns the jfk-lhr route.

Where is this story that AA is going to end JFK-LHR?


https://viewfromthewing.boardingarea.co ... erminal-8/

rumor that once ba goes to t8 in jfk, american won't fly any of thier metal tatl, instead revenue sharing as part of their jv
Welcome to the City Beautiful.
 
eurotrader85
Posts: 41
Joined: Wed Oct 24, 2018 8:45 pm

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

Sun Apr 14, 2019 8:30 pm

BA777FO wrote:
Waterbomber2 wrote:

Waterbomber2 wrote:
By letting the A380 die, BA is going against its core business model centered around the LHR mega hub. Point to point from a mega hub is not a strategy, it's an invitation to be overwhelmed by competition.
The B777X can fulfill the same role as the B744 and do it slightly better.
But the A380 could have offered BA much much more.


Connections have never been big business for BA compared to the likes of KLM at Amsterdam. BA has a higher proportion of O&D passengers compared to connections of any other major European network carrier. BA's scale, network reach and LHR slot portfolio means it will always have the edge in its core Atlantic market. Its costs are now competitive to the point where on short haul it can go head to head with easyJet and still turn a profit. You can see how its response to Norwegian has worked - AUS now on the 747 and A380 to Chicago has made it difficult for Norwegian to the point where they are now only seasonal. FLL from Gatwick has worked so well Norwegian has moved to Miami in search of higher yields. BA is overwhelming the competition, not vice versa.

As said.above, besides JNB, HKG, SIN and perhaps LAX, the A380 just doesn't work anywhere else where frequency is king.

Waterbomber2 wrote:
Going for B777X over A380 was a strategic mistake for BA, while Airbus should have done more to get BA to commit to the A380.
Lose-lose. Only Boeing won.


I completely disagree. There's no 2nd hand market for the A380 - it simply doesn't work to most destinations for variety of reasons and the 777X allows huge flexibility and versatility, something the A380 sorely lacks.


I do tend to agree with Waterbomber2 on the overall point that shunning the A380, in BA's case is a shortsighted mistake for the long run. Lets put aside the usual A vs B debate, but most people here on a.net will probably be of the view that people are only going to fly more and more going forwards, and at LHR, of all the places in the world, that cannot be matched by just up-gauging frequency as BA and any other airline would naturally prefer on most routes. The only way to increase Pax through LHR is by expanding capacity through the metal, and the A380 is/was the only plane that can do this in the WB sector. BA are planning to put 65 in J and 8 in F on the 779, which is supposed to be the high J replacement of the 747. That is a far cry from the 14 in F and 97 in J on the A380 and smaller than what they are currently putting on the high J 747s (although note a bit more W).

I hear very well the point of specific routes being workable JNB, LAX, HKG, SIN etc while others where frequency is needed, but as people fly more going forwards I only see more routes that at the moment fit a 777, having the demand to fill bigger planes or need even more frequency. At LHR only the former is possible without shrinking the portfolio elsewhere and cutting feed, or air fares on BA will just rise to create demand destruction. Sure then yield for BA/IAG will increase a bit and shareholders might smile, but as Waterbomber2 points out Pax will be pushed out to other competitors and hubs. In the grand scheme I cannot take seriously that a max supposed $50mln refit is sooo prohibitive against all those extra J seats being sold going forwards for years to come at the worlds most congested airport. I am personally very surprised BA didn't go for a split order in the WB order. They have history of doing that before, and sure both manufacturers would have been accommodating given their respective situations.
 
jfk777
Posts: 7045
Joined: Tue Aug 22, 2006 7:23 am

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

Sun Apr 14, 2019 8:55 pm

musman9853 wrote:
Bobloblaw wrote:
musman9853 wrote:

yeah, idk what he's talking about. especially considering the rumors american is gonna stop serving jfk-lhr on their own metal in favor of BA's jets. BA owns the jfk-lhr route.

Where is this story that AA is going to end JFK-LHR?


https://viewfromthewing.boardingarea.co ... erminal-8/

rumor that once ba goes to t8 in jfk, american won't fly any of thier metal tatl, instead revenue sharing as part of their jv


AA give up JFK to LHR ? Is BA going to give up all their flying to Miami, DFW and Chicago handing it over to AA ? Doubtful that either of those will ever happen.
 
musman9853
Topic Author
Posts: 831
Joined: Mon May 14, 2018 12:30 pm

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

Sun Apr 14, 2019 9:30 pm

jfk777 wrote:
musman9853 wrote:
Bobloblaw wrote:
Where is this story that AA is going to end JFK-LHR?


https://viewfromthewing.boardingarea.co ... erminal-8/

rumor that once ba goes to t8 in jfk, american won't fly any of thier metal tatl, instead revenue sharing as part of their jv


AA give up JFK to LHR ? Is BA going to give up all their flying to Miami, DFW and Chicago handing it over to AA ? Doubtful that either of those will ever happen.



oh i agree. i don't think the rumor will hold true. but it's an interesting thought experiment
Welcome to the City Beautiful.
 
Arion640
Posts: 2400
Joined: Fri Mar 31, 2017 5:15 pm

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

Sun Apr 14, 2019 9:44 pm

jfk777 wrote:
musman9853 wrote:
Bobloblaw wrote:
Where is this story that AA is going to end JFK-LHR?


https://viewfromthewing.boardingarea.co ... erminal-8/

rumor that once ba goes to t8 in jfk, american won't fly any of thier metal tatl, instead revenue sharing as part of their jv


AA give up JFK to LHR ? Is BA going to give up all their flying to Miami, DFW and Chicago handing it over to AA ? Doubtful that either of those will ever happen.


Doubt it will happen. Surely AA have corporate contracts to furfill where companies have to go on their metal.
Last edited by Arion640 on Sun Apr 14, 2019 9:50 pm, edited 1 time in total.
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.
 
User avatar
lightsaber
Moderator
Posts: 18136
Joined: Wed Jan 19, 2005 10:55 pm

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

Sun Apr 14, 2019 9:45 pm

eurotrader85 wrote:
BA777FO wrote:
Waterbomber2 wrote:



Connections have never been big business for BA compared to the likes of KLM at Amsterdam. BA has a higher proportion of O&D passengers compared to connections of any other major European network carrier. BA's scale, network reach and LHR slot portfolio means it will always have the edge in its core Atlantic market. Its costs are now competitive to the point where on short haul it can go head to head with easyJet and still turn a profit. You can see how its response to Norwegian has worked - AUS now on the 747 and A380 to Chicago has made it difficult for Norwegian to the point where they are now only seasonal. FLL from Gatwick has worked so well Norwegian has moved to Miami in search of higher yields. BA is overwhelming the competition, not vice versa.

As said.above, besides JNB, HKG, SIN and perhaps LAX, the A380 just doesn't work anywhere else where frequency is king.



I completely disagree. There's no 2nd hand market for the A380 - it simply doesn't work to most destinations for variety of reasons and the 777X allows huge flexibility and versatility, something the A380 sorely lacks.


I do tend to agree with Waterbomber2 on the overall point that shunning the A380, in BA's case is a shortsighted mistake for the long run. Lets put aside the usual A vs B debate, but most people here on a.net will probably be of the view that people are only going to fly more and more going forwards, and at LHR, of all the places in the world, that cannot be matched by just up-gauging frequency as BA and any other airline would naturally prefer on most routes. The only way to increase Pax through LHR is by expanding capacity through the metal, and the A380 is/was the only plane that can do this in the WB sector. BA are planning to put 65 in J and 8 in F on the 779, which is supposed to be the high J replacement of the 747. That is a far cry from the 14 in F and 97 in J on the A380 and smaller than what they are currently putting on the high J 747s (although note a bit more W).

I hear very well the point of specific routes being workable JNB, LAX, HKG, SIN etc while others where frequency is needed, but as people fly more going forwards I only see more routes that at the moment fit a 777, having the demand to fill bigger planes or need even more frequency. At LHR only the former is possible without shrinking the portfolio elsewhere and cutting feed, or air fares on BA will just rise to create demand destruction. Sure then yield for BA/IAG will increase a bit and shareholders might smile, but as Waterbomber2 points out Pax will be pushed out to other competitors and hubs. In the grand scheme I cannot take seriously that a max supposed $50mln refit is sooo prohibitive against all those extra J seats being sold going forwards for years to come at the worlds most congested airport. I am personally very surprised BA didn't go for a split order in the WB order. They have history of doing that before, and sure both manufacturers would have been accommodating given their respective situations.

The point is profit per flight. If a 779 costs enough less per flight, than the increased profit per passenger overcomes the fewer passengers.

The A380 cost single digits percentages less per passenger than the 77W. Now we have far more efficient engines, a CFRP wing, and a stretch.

If J is where the profit is, have a mix of high, mid, low J 779. Or A359. The most popular A380 routes have back to back flights. For BA, replace an A319 with a 779. Or replace 3x A319 with 2x A321 and a widebody slot.

There is tremendous bypass occuring to limit J prices. The A321xlr or 797 will criss cross the Atlantic. J class passengers always prefer a direct flight....

The airports that do not expand will be bypassed. The growth in in Asia. New runways/terminals will drive growth. I believe there will be less connecting passengers in 15 years.

QF's PER-LHR shows the future. Instead of A380s, BA needs 778s.

Lightsaber
IM messages to mods on warnings and bans will be ignored and nasty ones will result in a ban.
 
JayinKitsap
Posts: 1478
Joined: Sat Nov 26, 2005 9:55 am

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

Sun Apr 14, 2019 10:25 pm

BA received their 12 between 2013 and 2016. Say an average of 5 years in fleet x 12 x 365 = 21,900 flights at 1 per day. They also have a huge trove of data on the 77W. That is enough data to get cost, revenue, and profit quite accurate. What Cruz has said is additional A380's only make sense at a deep discount. But BA was considering the A380, that says they are comfortable with the 12 they have now.
 
Waterbomber2
Posts: 450
Joined: Mon Feb 04, 2019 3:44 am

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

Sun Apr 14, 2019 10:34 pm

BA777FO wrote:
Waterbomber2 wrote:
That there is no second hand market for the A380 plays in favor of an operator that flies its frames all the way to the scrap yard.
How? New frames are cheaper to aquire, used frames are cheaper to acquire.


Except no A380 operator is going to fly those frames for 30 years. 10 to 15 years seems to be about the going rate at the moment. The operating economics just don't stack up. A 777 can have a destination alternate at pretty much the closest airport to its destination, an A380 cannot necessarily do that - additional fuel carriage is expensive. As is maintaining yields in November and February. And there's cargo - BA has no destination that is solely operated by the A380 because it requires the 777 or 747 to haul the cargo the A380 cannot. Aside from once daily to HKG, SIN and JNB the A380 doesn't really work anywhere for BA.

Waterbomber2 wrote:
BA is well equipped for future downsizing, which is what they are already doing.
A few more airframes but smaller average frame size.
That is literally called downsizing.


That's not downsizing - downsizing would be flying fewer seats but BA is offering more seats and flying more passengers. ASKs and RPKs have been on an upward trend since 2009.

Waterbomber2 wrote:
BA's presence IN Asia has gone from co-dominant to passive at best. Japan, China and India? Meh, just dots on a map.


BA has 7 daily flights to India - how many European airlines have more? BA is one of the market share leaders on India-USA traffic. BA is double daily to Tokyo and just added Osaka. China is a rough market from the UK due to visa restrictions for Chinese nationals. As has been said though - the UK's geography doesn't lend itself to being strong to Asia but BA is a leader in India and is growing in Japan. Hardly passive.

Waterbomber2 wrote:
JFK-LHR is doing great. But look what they have on the route now. The queen of the skies is bringing home the profits.


And those profits will be even higher with the 787-10 on the route and co-location with AA at T8.

Waterbomber2 wrote:
There is no reason to think that the similar-sized B777X won't do the same, or is there? How does a paid-off B744 stack against a 200 mill shiny new B777X?
Can the lower fuel and maintenance bills of the B777X offset the higher capital cost in a low utilization operation such as Jfk-lhr where more time is spent on the ground parked or taxiing than flying?


Many of the 747s are coming up to requiring heavy D checks - that's a lot of expensive maintenance and downtime. The cost of that alone makes the 777X and its associated fuel saving quite marked. However, your mistake is that a) you assume the 777X will fly to JFK in significant numbers and b) that's the only route it'll do. A JFK rotation will then go onto somewhere else before it sees JFK again - in between it'll go Austin, Los Angeles, San Francisco, Delhi or the like.

Waterbomber2 wrote:
At the end of the day, there won't be much difference between the B744 and the B777X, cost wise.
And there lies the problem imo.
You don't spend billions on a new subfleet for a status-quo, when you can expand an existing A380 fleet with commonality, savings of scale, a better product, while increasing capacity and dominance on your core market.


Except the 747 is coming to the end of its useful life. They need to replaced. Flying them for another 15 years is not an option. At $80 per barrel flying the 747 becomes quite uneconomical too. Below $60 per barrel they're good value, hence why they've stayef as long as they have.

The 777X will have more versatility, a better CASK and better also benefits from commonality. If the A380 was so wonderful then Virgin would have taken delivery of their order, KLM would have bought some and Air France and Lufthansa would have ordered more. Ask yourself why they haven't. For the same payload to HKG from LHR a 77W burns 60% of the fuel that an A380 does. It's a phenomenal saving.

jfk777 wrote:
Why no mention from Airbus about any A350-1000's ? While the RFP was for 777 and 744 replacements that had to include planes beyond the A380, if BA did order any it would be 6, 8 maybe 10 at most. A follow on order for A350 would have been for more than the quantity of A380's.


Apparently the Airbus offer was for a mix of A380s and A350s but the pricing and timing of A350 deliveries wasn't good enough.

Armodeen wrote:
Btw I don’t really get how the 779 will be massively more flexible, it is itself a very large aircraft


Because the 777X will be able to operate into any airfield that the 77W can, ie just about anywhere. The A380 still has a lot of the world that is simply unuseable. Plus the 777X won't have the same passenger capacity as the A380 - the pressure on yields outside of peak periods won't be anywhere near as bad as on the A380. Given trip costs, the break-even loadfactor for a 777X is considerably lower than for an A380.

BOSAero wrote:
Watch out. B6 coming in hot.


With the same number of J seats across their 3 daily flights as BA has on one flight? While BA and AA operate 14 daily flights, Jetblue will "come in hot" with 3? Reckon BA will cope ;)


-First of all, about flying frames for 30 years. We don't know that yet. A few non-standard frames being sent to the scrappers, others going to wetlease operators, and all so far to be immediately replaced by standard frames. Thisd should not be any indicator of how things will evolve from now on.

- About low yields in the low season. This is a global market.
Any fare searches will produce hundreds of flight options for any given date and city pairs. They are then visualised by potential purchasers according to fares, or schedule, or a combination of both.
What yields you capture does not depend on what aircraft size you offer, but who books your seats at what fares and why. What the A380 allows you to do is to compete against B779/A350/B787/A330 operators and force them off a route.
By having the most seats on offer in a market, you command the yields. A B787 operator tries to undercut you? Undercut him until he pushes his fares back up, and then push your fares up. He is going to fly empty, you are going to fly full. Some seats at low yields, some at higher yields. A few seasons of that and they will be off the route and you can jack the yields up. Even if you have to sell 30 seats here and 20 seats there at low yields, losing 30 seats even at low yields is a heavy loss for a 200 seat B789, while it's pocket change for an A380.
That's the power of the A380.

-Imho, cargo is comparable to very low yield passengers. It increases fuel burn, it lengthens turn-around times and causes delays, you need to carry around empty ULD's to reposition them, it requires an entire infra-structure and sales departments dedicated to it, it's ultra-seasonal and could be uni-directional, etc... Cargo is just a way to make up for wasted space in the underfloor hold of long haul aircraft.
On short to midhaul routes, there is little to no cargo. So why complain about the A380 specifically when BA has hundreds of A320's flying all around the place barely hauling any cargo?
If anything one should question why the long tubes have so much cargo capacity and how much waste that generates?

-ASK's and RPK's have been up worldwide in the past decade so absolute RPK and ASK growth is meaningless.
This is the same as talking about inflation. Did BA's figures grow faster than the general market or is it lagging behind and actually downsizing relative to the total market size?
Also, BA has been adding new capacity without retiring the airframes that they're coming to replace, creating an overlap. You can see this at many airlines taking B787's and A350's. They are not retiring the old frames that they're supposed to replace as fast as they're getting new ones. It can bve considered proper fleet planning, and those old frames will be gone at the next market downturn, so it's meaningless to take spot figures.

-A B787-10 LHR-JFK operation will be profitable short-term. But it will be up to what the competition will do.
For example, what will happen if DL takes used A380 and start dumping capacity on the route? Can BA compete with their teeny tiny B787-10's or will they eventually start to lose a grip and start losing money?
If BA had a dedicated A380 operation for the route, they would have been able to force DL/VS to retreat.
If you have a profitable market, you protect it and try to maximise its potential. You don't downsize to increase unit profit.
 
User avatar
Revelation
Posts: 21414
Joined: Wed Feb 09, 2005 9:37 pm

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

Mon Apr 15, 2019 12:10 am

eurotrader85 wrote:
I do tend to agree with Waterbomber2 on the overall point that shunning the A380, in BA's case is a shortsighted mistake for the long run. Lets put aside the usual A vs B debate, but most people here on a.net will probably be of the view that people are only going to fly more and more going forwards, and at LHR, of all the places in the world, that cannot be matched by just up-gauging frequency as BA and any other airline would naturally prefer on most routes. The only way to increase Pax through LHR is by expanding capacity through the metal, and the A380 is/was the only plane that can do this in the WB sector. BA are planning to put 65 in J and 8 in F on the 779, which is supposed to be the high J replacement of the 747. That is a far cry from the 14 in F and 97 in J on the A380 and smaller than what they are currently putting on the high J 747s (although note a bit more W).

I hear very well the point of specific routes being workable JNB, LAX, HKG, SIN etc while others where frequency is needed, but as people fly more going forwards I only see more routes that at the moment fit a 777, having the demand to fill bigger planes or need even more frequency. At LHR only the former is possible without shrinking the portfolio elsewhere and cutting feed, or air fares on BA will just rise to create demand destruction. Sure then yield for BA/IAG will increase a bit and shareholders might smile, but as Waterbomber2 points out Pax will be pushed out to other competitors and hubs. In the grand scheme I cannot take seriously that a max supposed $50mln refit is sooo prohibitive against all those extra J seats being sold going forwards for years to come at the worlds most congested airport. I am personally very surprised BA didn't go for a split order in the WB order. They have history of doing that before, and sure both manufacturers would have been accommodating given their respective situations.

Thing is, IAG/BA did the sums at least twice in recent times, once in 2016 ( https://www.bloomberg.com/news/articles ... too-pricey ) and of course recently in 2019, and the best they could do was propose buying dirt cheap used A380s.

And yes, IAG/BA knows all the issues with dealing with LHR, and knows what growth will be like, and knows what capacity they can expect to have, yet the outcome was to buy no more A380s and to buy 777x to use for high capacity routes.

I'm not sure why we blame their decision on shortsightedness. They have shown they are pretty good at matching supply to demand, even when it means operating ageing aircraft. They did the sums here, and decided they don't work.

Personally I think IAG has lots of cards to play when it comes to managing the LHR and LGW slots they have, and maximizing EI and IB's resources, etc, which make it so just putting the Whale onto the LHR trunk routes is no longer their strategy of choice.
Wake up to find out that you are the eyes of the world
The heart has its beaches, its homeland and thoughts of its own
Wake now, discover that you are the song that the morning brings
The heart has its seasons, its evenings and songs of its own
 
BA777FO
Posts: 348
Joined: Sun Apr 22, 2018 2:58 pm

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

Mon Apr 15, 2019 12:57 pm

eurotrader85 wrote:
I do tend to agree with Waterbomber2 on the overall point that shunning the A380, in BA's case is a shortsighted mistake for the long run. Lets put aside the usual A vs B debate, but most people here on a.net will probably be of the view that people are only going to fly more and more going forwards, and at LHR, of all the places in the world, that cannot be matched by just up-gauging frequency as BA and any other airline would naturally prefer on most routes. The only way to increase Pax through LHR is by expanding capacity through the metal, and the A380 is/was the only plane that can do this in the WB sector. BA are planning to put 65 in J and 8 in F on the 779, which is supposed to be the high J replacement of the 747. That is a far cry from the 14 in F and 97 in J on the A380 and smaller than what they are currently putting on the high J 747s (although note a bit more W).


That's what Bob Ayling thought when he bought a load of 757s as the airline's short haul fleet of choice. Then other airlines with their A320s destroyed BA in that market segment, led to easyJet and Ryanair becoming big players in the UK market and despite the additional capacity it was just simply too expensive to operate in comparison. The A380 suffers from the same problem. Take last night's Hong Kong - the A380 carried 55 more passengers, 10 tonnes less cargo but burned 50 tonnes more fuel than the 77W. The A380 carries the same F, ~30 more J, ~10W and ~100Y extra Y seats. But for an extra 50 tonne fuel burn and lower cargo haulage it just doesn't work. The 777X will be 10/15% more efficient than the 77W again.

eurotrader85 wrote:
I hear very well the point of specific routes being workable JNB, LAX, HKG, SIN etc while others where frequency is needed, but as people fly more going forwards I only see more routes that at the moment fit a 777, having the demand to fill bigger planes or need even more frequency. At LHR only the former is possible without shrinking the portfolio elsewhere and cutting feed, or air fares on BA will just rise to create demand destruction. Sure then yield for BA/IAG will increase a bit and shareholders might smile, but as Waterbomber2 points out Pax will be pushed out to other competitors and hubs.


Like where? Where doesn't receive the BA A380 that desperately needs it? The A380 has been pulled from MIA, IAD, can't maintain YVR or ORD year-round and plays only a bit part in BOS. It's been pulled off double daily LAX and the 787 is having to supplement it to JNB. The network planners and revenue managers have crunched the numbers and much prefer other aircraft. The JV with AA means capacity can be flexed between the two (rather than 1xdaily A380 to PHX, BA/AA will go to 2 777s next summer).

eurotrader85 wrote:
In the grand scheme I cannot take seriously that a max supposed $50mln refit is sooo prohibitive against all those extra J seats being sold going forwards for years to come at the worlds most congested airport. I am personally very surprised BA didn't go for a split order in the WB order. They have history of doing that before, and sure both manufacturers would have been accommodating given their respective situations.


It's $50m on top of acquisition costs. But then you've got the cost of the operation and when you average that $50m over the operated sectors it doesn't stack up. An extra 30 J seats doesn't justify that expense, especially when every sector involves an additional 100 tonnes of fuel burn round trip compared to a 77W.

Airbus, by the sounds of it, weren't very accommodating. The time slots offered on new A350s (in addition to the new A380s) simply wasn't suitable. The 777X bridges the gap between the A350 and the A380, that's the kind of capacity BA is after rather than the big jump to the A380.
 
BA777FO
Posts: 348
Joined: Sun Apr 22, 2018 2:58 pm

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

Mon Apr 15, 2019 1:30 pm

Waterbomber2 wrote:
-First of all, about flying frames for 30 years. We don't know that yet. A few non-standard frames being sent to the scrappers, others going to wetlease operators, and all so far to be immediately replaced by standard frames. Thisd should not be any indicator of how things will evolve from now on.


No airline is adding to its A380 fleet. Even Emirates has swapped out from its last order. Air France is returning them and others haven't even taken delivery. It's not the right aircraft for the missions that BA requires. It's just that simple.

Waterbomber2 wrote:
- About low yields in the low season. This is a global market.
Any fare searches will produce hundreds of flight options for any given date and city pairs. They are then visualised by potential purchasers according to fares, or schedule, or a combination of both.
What yields you capture does not depend on what aircraft size you offer, but who books your seats at what fares and why. What the A380 allows you to do is to compete against B779/A350/B787/A330 operators and force them off a route.


It doesn't. What A380 route used by a competitor has forced BA to reduce its capacity to that same destination? Similarly, what BA A380 route has forced a competitor off? With the exception of Norwegian's route to Singapore, which was for reasons other than A380 usage, I can't think of any. The 779 is likely to have a lower CASK than the A380 so that comparison just doesn't stack up.

Waterbomber2 wrote:
By having the most seats on offer in a market, you command the yields. A B787 operator tries to undercut you? Undercut him until he pushes his fares back up, and then push your fares up. He is going to fly empty, you are going to fly full. Some seats at low yields, some at higher yields. A few seasons of that and they will be off the route and you can jack the yields up. Even if you have to sell 30 seats here and 20 seats there at low yields, losing 30 seats even at low yields is a heavy loss for a 200 seat B789, while it's pocket change for an A380.
That's the power of the A380.


But it's not. As I said with the HKG example, you're carrying 10 tonnes less cargo and burning 50 tonnes more fuel. You're carrying 10 more crew. The 77W is carrying ~300 passengers for a fuel burn of 80 tonnes, the A380 130 tonnes for 450 passengers. Fuel burn per seat is still better on the 77W and it's carrying more cargo. There's less pressure on your yields and the break even load factor is considerably lower on the 77W - it'll be more so for the 777X. The numbers just don't stack up for the A380.

Waterbomber2 wrote:
-Imho, cargo is comparable to very low yield passengers. It increases fuel burn, it lengthens turn-around times and causes delays, you need to carry around empty ULD's to reposition them, it requires an entire infra-structure and sales departments dedicated to it, it's ultra-seasonal and could be uni-directional, etc... Cargo is just a way to make up for wasted space in the underfloor hold of long haul aircraft.


It doesn't lengthen turnaround times - you can load and unload a full cargo and baggage load in less time than you can disembark and board a full load of passengers and clean and cater the aircraft. Extra fuel burn is marginal - for a 77W an extra 5 tonnes of cargo will increase trip fuel on a ~4500nm sector by about 1.5 tonnes. The revenue from the cargo is considerably higher. The infrastructure/sales already exists - look up IAG cargo! Cargo can be the difference between making money and chopping your route - ask Norwegian about Singapore. BA has to use an aircraft besides the A380 on just about every route to haul the cargo the A380 cannot - a 77W to SIN and HKG, 747/787 to JNB, SFO, LAX, ORD and BOS. That "wasted space" as you call it is a massive, virtually costless revenue stream as all the infrastructure already exists for a gloabl network.

Waterbomber2 wrote:
On short to midhaul routes, there is little to no cargo. So why complain about the A380 specifically when BA has hundreds of A320's flying all around the place barely hauling any cargo?
If anything one should question why the long tubes have so much cargo capacity and how much waste that generates?


Because BA isn't flying A320s to Chicago, Seattle, Mexico City or Sao Paulo. BA is flying widebodies to Moscow and Madrid to haul cargo. It's not waste - that additional space is generating revenue and allows you to avoid the expense of operating dedicated freighters.

Waterbomber2 wrote:
-ASK's and RPK's have been up worldwide in the past decade so absolute RPK and ASK growth is meaningless.
This is the same as talking about inflation. Did BA's figures grow faster than the general market or is it lagging behind and actually downsizing relative to the total market size?


You said BA was downsiIng - that's nonsense. Capacity at Gatwick has grown by in excess of 20% within the past year alone. A320neos are adding capacity as is replacing A319s with larger A320s and A321s and the 777s are all getting extra seats. That's a clever way of expanding when you can't acquire new slots. BA is still the market share leader in seats from London to every region. So no, it's not downsizing.

Waterbomber2 wrote:
Also, BA has been adding new capacity without retiring the airframes that they're coming to replace, creating an overlap. You can see this at many airlines taking B787's and A350's. They are not retiring the old frames that they're supposed to replace as fast as they're getting new ones. It can bve considered proper fleet planning, and those old frames will be gone at the next market downturn, so it's meaningless to take spot figures.


It hasn't really. The 747 fleet is down from mid-40s to 32, the 767 and 737 fleets hasvebeen fully retired and as more A320s have arrived. The fleet size has been relatively stable - the main increase has come from 3 additional shorthaul aircraft at LGW, some extra 777s at LGW to operate ex-Monarch slots and some conversion of shorthaul flying to longhaul at Heathrow. This has all been achieved without the requirement for more A380s and the network planners and fleet planners have decided the A380 just isn't necessary. There's potentially 25,000 new annual slot pairs coming to Heathrow and a 3rd runway would render the A380 obsolete.

Waterbomber2 wrote:
-A B787-10 LHR-JFK operation will be profitable short-term. But it will be up to what the competition will do.
For example, what will happen if DL takes used A380 and start dumping capacity on the route? Can BA compete with their teeny tiny B787-10's or will they eventually start to lose a grip and start losing money?
If BA had a dedicated A380 operation for the route, they would have been able to force DL/VS to retreat.
If you have a profitable market, you protect it and try to maximise its potential. You don't downsize to increase unit profit.


Delta with an A380?! No chance. Besides, the 787-10 will have a lower CASK anyway! 8 daily A380s to JFK is a sure fire way to lose money. Even with the 747/777 mix BA is the market leader to JFK. An A380 operation there would destroy that! Besides the fact T7 can't take the A380 anyway, so pointless topic!

The A380 just isn't a great aircraft. Passengers may like it but the numbers for airlines just don't add up. It's an expensive aircraft to operate and additional capacity that requires you to trash your yields to fill it isn't a recipe for a success.
 
User avatar
keesje
Posts: 13178
Joined: Thu Apr 12, 2001 2:08 am

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

Mon Apr 15, 2019 2:13 pm

I guess BA are scratching their heads now. Because they want more.
"Never mistake motion for action." Ernest Hemingway
 
wjcandee
Posts: 7931
Joined: Mon Jun 05, 2000 12:50 am

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

Mon Apr 15, 2019 2:42 pm

Vladex wrote:
He may or may not be right but whose airplanes would he take ?
BA is not really taking care of A380 anyway so why do would they bother taking more of them?
See for your self.
https://www.youtube.com/watch?v=YKLGq9GUSa4
https://www.youtube.com/watch?v=DNbBhQg-qv8


Yeah, but the self-important whining on those videos is from 2 years ago. Now may be different, better or worse. I'm so sorry for the first dude that there are fewer snacks available in Club World than there used to be. (Rolling eyes.)
 
muralir
Posts: 102
Joined: Mon May 27, 2013 3:44 pm

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

Mon Apr 15, 2019 4:26 pm

Waterbomber2 wrote:

-First of all, about flying frames for 30 years. We don't know that yet. A few non-standard frames being sent to the scrappers, others going to wetlease operators, and all so far to be immediately replaced by standard frames. Thisd should not be any indicator of how things will evolve from now on.

- About low yields in the low season. This is a global market.
Any fare searches will produce hundreds of flight options for any given date and city pairs. They are then visualised by potential purchasers according to fares, or schedule, or a combination of both.
What yields you capture does not depend on what aircraft size you offer, but who books your seats at what fares and why. What the A380 allows you to do is to compete against B779/A350/B787/A330 operators and force them off a route.
By having the most seats on offer in a market, you command the yields. A B787 operator tries to undercut you? Undercut him until he pushes his fares back up, and then push your fares up. He is going to fly empty, you are going to fly full. Some seats at low yields, some at higher yields. A few seasons of that and they will be off the route and you can jack the yields up. Even if you have to sell 30 seats here and 20 seats there at low yields, losing 30 seats even at low yields is a heavy loss for a 200 seat B789, while it's pocket change for an A380.
That's the power of the A380.

-Imho, cargo is comparable to very low yield passengers. It increases fuel burn, it lengthens turn-around times and causes delays, you need to carry around empty ULD's to reposition them, it requires an entire infra-structure and sales departments dedicated to it, it's ultra-seasonal and could be uni-directional, etc... Cargo is just a way to make up for wasted space in the underfloor hold of long haul aircraft.
On short to midhaul routes, there is little to no cargo. So why complain about the A380 specifically when BA has hundreds of A320's flying all around the place barely hauling any cargo?
If anything one should question why the long tubes have so much cargo capacity and how much waste that generates?

-ASK's and RPK's have been up worldwide in the past decade so absolute RPK and ASK growth is meaningless.
This is the same as talking about inflation. Did BA's figures grow faster than the general market or is it lagging behind and actually downsizing relative to the total market size?
Also, BA has been adding new capacity without retiring the airframes that they're coming to replace, creating an overlap. You can see this at many airlines taking B787's and A350's. They are not retiring the old frames that they're supposed to replace as fast as they're getting new ones. It can bve considered proper fleet planning, and those old frames will be gone at the next market downturn, so it's meaningless to take spot figures.

-A B787-10 LHR-JFK operation will be profitable short-term. But it will be up to what the competition will do.
For example, what will happen if DL takes used A380 and start dumping capacity on the route? Can BA compete with their teeny tiny B787-10's or will they eventually start to lose a grip and start losing money?
If BA had a dedicated A380 operation for the route, they would have been able to force DL/VS to retreat.
If you have a profitable market, you protect it and try to maximise its potential. You don't downsize to increase unit profit.


With all due respect, I think your logic is exactly backwards on these points. @BA777FO made a lot of good points, but I'd like to add a few additional ones to consider.

1) Slot constraints generally lead to upgauging the *small* flights first, especially for the dominant hub operator. Yes, if you're a small African / Asian airline with only a few precious slots at LHR, and you're only running longhaul service on a 777, then your only option is to upguage to something bigger (747, a380). Which is why Emirates runs A380s to a lot of slot-constrained airports. But if you're BA, you have literally hundreds of shorthaul NB flights into mundane places all over Europe. If you need more capacity into JFK/HKG/whatever, you don't upguage that route to an A380. You upguage a bunch of your daily flights into Paris, allowing you to save a slot, which you then use to launch an additional frequency. The hub operators *always* have flexibility to manage their slots in a slot-restricted airport.

2) If two airlines are competing and one has an A380 and the other flies 2 787s, all other factors being equal (e.g. hub dominance, connecting flows, etc), I would bet my money on the latter winning that competition. Any day of the week. Flexibility is key. The person who *must* sell the most seats doesn't command yields. He must accept the lowest yields, because he has no choice to say no to those customers. The one with the smaller capacity can sell to the highest bidders, and then stop selling well before the other one can.

Your thinking is off, I think, because at the lower yields, the fare is actually generating an operating *loss* to the airline. Yes, a few bucks is better than nothing, so the loss is less than not selling the seat at all. But it's still a loss, and as the saying goes, if you lose money on every sale, you can't make it up with volume. So if you have an A380 in which you must fill 100 seats with junk fares generating losses, and your competitor has a 777 in which he only has to sell 40 junk fares, your competitor will come out far, far ahead of you.

It gets even worse when comparing to a 787. At least the A380 still beats a 777 in seat-mile costs, so those junk fare seats cost a few dollars less in expenses (not enough to compensate for the fact that you need to sell 60 more of them). A 787 is actually less expensive than an A380, so not only does the A380 have to sell more junk fares, each junk fare generates a higher loss than in a 787. It's a double whammy.

3) Cargo is *very* profitable. It's one of the main reasons the 777 is so favored for longhauls. The inability to haul large amounts of cargo (relative to its size) is absolutely a big knock against the A380 for the longhaul routes that an A380 flies. Check out this article: https://thepointsguy.com/news/how-airli ... rom-cargo/
Here's a choice quote: “On average, 50% or more of international flights are only profitable due to cargo’s contribution”

4) I'll throw you a bone on this one :-) JFK is one of the few routes where an A380 *might* make sense, simply because a) BA already flies almost hourly. So additional frequency doesn't help; b) JFK itself is tight on slots, and, not being the hub operator there, BA can't just adjust slots from other routes; c) it's a massive O&D market where BA is preferred by a large group of passengers. When all those conditions are met, yes, an A380 might allow BA to capture more passengers at a reasonable yield to make more money than a 747 or 777. But how many other markets are like that for BA, where BA doesn't already fly the A380? Heck, even Chicago, the #2 financial and business destination in the US, with similar (albeit smaller) market characteristics to JFK, can't sustain more than 1 A380 in the summer months.

Let me be clear: I'm not saying that the current A380 fleet is being badly used or isn't profitable for BA. I'll agree that they're probably doing okay with their current fleet. It's that *additional* A380s really don't make sense, because I just don't see many additional routes that need an A380.

The irony of all this is that as a passenger, I like the A380 and hate the 787. And yet I totally understand why airline executives are the exact opposite :-)
 
chidino
Posts: 175
Joined: Fri Mar 30, 2018 12:36 pm

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

Mon Apr 15, 2019 4:53 pm

:checkmark: Well said, both BA777FO and muralir. Thank you.
 
Waterbomber2
Posts: 450
Joined: Mon Feb 04, 2019 3:44 am

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

Mon Apr 15, 2019 6:02 pm

muralir wrote:
Waterbomber2 wrote:

-First of all, about flying frames for 30 years. We don't know that yet. A few non-standard frames being sent to the scrappers, others going to wetlease operators, and all so far to be immediately replaced by standard frames. Thisd should not be any indicator of how things will evolve from now on.

- About low yields in the low season. This is a global market.
Any fare searches will produce hundreds of flight options for any given date and city pairs. They are then visualised by potential purchasers according to fares, or schedule, or a combination of both.
What yields you capture does not depend on what aircraft size you offer, but who books your seats at what fares and why. What the A380 allows you to do is to compete against B779/A350/B787/A330 operators and force them off a route.
By having the most seats on offer in a market, you command the yields. A B787 operator tries to undercut you? Undercut him until he pushes his fares back up, and then push your fares up. He is going to fly empty, you are going to fly full. Some seats at low yields, some at higher yields. A few seasons of that and they will be off the route and you can jack the yields up. Even if you have to sell 30 seats here and 20 seats there at low yields, losing 30 seats even at low yields is a heavy loss for a 200 seat B789, while it's pocket change for an A380.
That's the power of the A380.

-Imho, cargo is comparable to very low yield passengers. It increases fuel burn, it lengthens turn-around times and causes delays, you need to carry around empty ULD's to reposition them, it requires an entire infra-structure and sales departments dedicated to it, it's ultra-seasonal and could be uni-directional, etc... Cargo is just a way to make up for wasted space in the underfloor hold of long haul aircraft.
On short to midhaul routes, there is little to no cargo. So why complain about the A380 specifically when BA has hundreds of A320's flying all around the place barely hauling any cargo?
If anything one should question why the long tubes have so much cargo capacity and how much waste that generates?

-ASK's and RPK's have been up worldwide in the past decade so absolute RPK and ASK growth is meaningless.
This is the same as talking about inflation. Did BA's figures grow faster than the general market or is it lagging behind and actually downsizing relative to the total market size?
Also, BA has been adding new capacity without retiring the airframes that they're coming to replace, creating an overlap. You can see this at many airlines taking B787's and A350's. They are not retiring the old frames that they're supposed to replace as fast as they're getting new ones. It can bve considered proper fleet planning, and those old frames will be gone at the next market downturn, so it's meaningless to take spot figures.

-A B787-10 LHR-JFK operation will be profitable short-term. But it will be up to what the competition will do.
For example, what will happen if DL takes used A380 and start dumping capacity on the route? Can BA compete with their teeny tiny B787-10's or will they eventually start to lose a grip and start losing money?
If BA had a dedicated A380 operation for the route, they would have been able to force DL/VS to retreat.
If you have a profitable market, you protect it and try to maximise its potential. You don't downsize to increase unit profit.


With all due respect, I think your logic is exactly backwards on these points. @BA777FO made a lot of good points, but I'd like to add a few additional ones to consider.

1) Slot constraints generally lead to upgauging the *small* flights first, especially for the dominant hub operator. Yes, if you're a small African / Asian airline with only a few precious slots at LHR, and you're only running longhaul service on a 777, then your only option is to upguage to something bigger (747, a380). Which is why Emirates runs A380s to a lot of slot-constrained airports. But if you're BA, you have literally hundreds of shorthaul NB flights into mundane places all over Europe. If you need more capacity into JFK/HKG/whatever, you don't upguage that route to an A380. You upguage a bunch of your daily flights into Paris, allowing you to save a slot, which you then use to launch an additional frequency. The hub operators *always* have flexibility to manage their slots in a slot-restricted airport.

2) If two airlines are competing and one has an A380 and the other flies 2 787s, all other factors being equal (e.g. hub dominance, connecting flows, etc), I would bet my money on the latter winning that competition. Any day of the week. Flexibility is key. The person who *must* sell the most seats doesn't command yields. He must accept the lowest yields, because he has no choice to say no to those customers. The one with the smaller capacity can sell to the highest bidders, and then stop selling well before the other one can.

Your thinking is off, I think, because at the lower yields, the fare is actually generating an operating *loss* to the airline. Yes, a few bucks is better than nothing, so the loss is less than not selling the seat at all. But it's still a loss, and as the saying goes, if you lose money on every sale, you can't make it up with volume. So if you have an A380 in which you must fill 100 seats with junk fares generating losses, and your competitor has a 777 in which he only has to sell 40 junk fares, your competitor will come out far, far ahead of you.

It gets even worse when comparing to a 787. At least the A380 still beats a 777 in seat-mile costs, so those junk fare seats cost a few dollars less in expenses (not enough to compensate for the fact that you need to sell 60 more of them). A 787 is actually less expensive than an A380, so not only does the A380 have to sell more junk fares, each junk fare generates a higher loss than in a 787. It's a double whammy.

3) Cargo is *very* profitable. It's one of the main reasons the 777 is so favored for longhauls. The inability to haul large amounts of cargo (relative to its size) is absolutely a big knock against the A380 for the longhaul routes that an A380 flies. Check out this article: https://thepointsguy.com/news/how-airli ... rom-cargo/
Here's a choice quote: “On average, 50% or more of international flights are only profitable due to cargo’s contribution”

4) I'll throw you a bone on this one :-) JFK is one of the few routes where an A380 *might* make sense, simply because a) BA already flies almost hourly. So additional frequency doesn't help; b) JFK itself is tight on slots, and, not being the hub operator there, BA can't just adjust slots from other routes; c) it's a massive O&D market where BA is preferred by a large group of passengers. When all those conditions are met, yes, an A380 might allow BA to capture more passengers at a reasonable yield to make more money than a 747 or 777. But how many other markets are like that for BA, where BA doesn't already fly the A380? Heck, even Chicago, the #2 financial and business destination in the US, with similar (albeit smaller) market characteristics to JFK, can't sustain more than 1 A380 in the summer months.

Let me be clear: I'm not saying that the current A380 fleet is being badly used or isn't profitable for BA. I'll agree that they're probably doing okay with their current fleet. It's that *additional* A380s really don't make sense, because I just don't see many additional routes that need an A380.

The irony of all this is that as a passenger, I like the A380 and hate the 787. And yet I totally understand why airline executives are the exact opposite :-)



Differing views, interesting discussion.
I have heard many times how people are saying that BA is better served upgauging its narrowbody fleet to make better use of it slots. Some even are suggesting that the NMA would be the preferred option.

This is the problem though.
As much as London is a huge market with a lot of O&D, LHR is what it is because it's a huge connector hub first.
That is why BA operates a huge fleet of narrowbodies next to its fleet of widebodies. Do those narrowbodies fly around Europe carrying O&D to from London? Of course there is O&D, but if you are O&Ding to london there is a myriad of options: Eurostar, LCY, LTN, STN, LGW, SEN, or the road.
The higher yield shorthaul O&D's will opt for Eurostar or LCY. The budget-conscious leisure O&D's will opt for STN, LTN, Flixbus or Eurotunnel.
Somewhere in the middle you have LHR.

No matter how much BA would love to carry a max amount of O&D to/from london, their A320 fleet is there primarily to feed their huge long haul fleet.
So it's pointless to upgauge the A320 fleet if you don't grow the longhaul fleet at the same pace.

Now you can see that without larger widebodies, the narrowbodies can't grow either.
You can bring in larger A321's to maximise the slot potential. But how do you get rid of the additional pax coming off those A321s if your smaller widebodies are full to the gills because, well, they are smaller.

An A380 fleet's added capacity trickles down to the narrow body fleet which will be given the opportunity to grow in tandem. Growing the narrowbody fleet while shrinking the widebody fleet is utterly pointless.
 
GripenFan
Posts: 31
Joined: Tue Jul 12, 2016 7:41 pm

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

Mon Apr 15, 2019 6:30 pm

jagraham wrote:
...the seats should not have made that much difference. We are not hearing the whole story.


airliners.net is getting right up there with Above Top Secret and Infowars in terms of conspiracy theories, especially when it comes to why airline X or Y didn't buy more A380s...
 
eurotrader85
Posts: 41
Joined: Wed Oct 24, 2018 8:45 pm

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

Mon Apr 15, 2019 6:31 pm

muralir wrote:
Waterbomber2 wrote:

-First of all, about flying frames for 30 years. We don't know that yet. A few non-standard frames being sent to the scrappers, others going to wetlease operators, and all so far to be immediately replaced by standard frames. Thisd should not be any indicator of how things will evolve from now on.

- About low yields in the low season. This is a global market.
Any fare searches will produce hundreds of flight options for any given date and city pairs. They are then visualised by potential purchasers according to fares, or schedule, or a combination of both.
What yields you capture does not depend on what aircraft size you offer, but who books your seats at what fares and why. What the A380 allows you to do is to compete against B779/A350/B787/A330 operators and force them off a route.
By having the most seats on offer in a market, you command the yields. A B787 operator tries to undercut you? Undercut him until he pushes his fares back up, and then push your fares up. He is going to fly empty, you are going to fly full. Some seats at low yields, some at higher yields. A few seasons of that and they will be off the route and you can jack the yields up. Even if you have to sell 30 seats here and 20 seats there at low yields, losing 30 seats even at low yields is a heavy loss for a 200 seat B789, while it's pocket change for an A380.
That's the power of the A380.

-Imho, cargo is comparable to very low yield passengers. It increases fuel burn, it lengthens turn-around times and causes delays, you need to carry around empty ULD's to reposition them, it requires an entire infra-structure and sales departments dedicated to it, it's ultra-seasonal and could be uni-directional, etc... Cargo is just a way to make up for wasted space in the underfloor hold of long haul aircraft.
On short to midhaul routes, there is little to no cargo. So why complain about the A380 specifically when BA has hundreds of A320's flying all around the place barely hauling any cargo?
If anything one should question why the long tubes have so much cargo capacity and how much waste that generates?

-ASK's and RPK's have been up worldwide in the past decade so absolute RPK and ASK growth is meaningless.
This is the same as talking about inflation. Did BA's figures grow faster than the general market or is it lagging behind and actually downsizing relative to the total market size?
Also, BA has been adding new capacity without retiring the airframes that they're coming to replace, creating an overlap. You can see this at many airlines taking B787's and A350's. They are not retiring the old frames that they're supposed to replace as fast as they're getting new ones. It can bve considered proper fleet planning, and those old frames will be gone at the next market downturn, so it's meaningless to take spot figures.

-A B787-10 LHR-JFK operation will be profitable short-term. But it will be up to what the competition will do.
For example, what will happen if DL takes used A380 and start dumping capacity on the route? Can BA compete with their teeny tiny B787-10's or will they eventually start to lose a grip and start losing money?
If BA had a dedicated A380 operation for the route, they would have been able to force DL/VS to retreat.
If you have a profitable market, you protect it and try to maximise its potential. You don't downsize to increase unit profit.


With all due respect, I think your logic is exactly backwards on these points. @BA777FO made a lot of good points, but I'd like to add a few additional ones to consider.

1) Slot constraints generally lead to upgauging the *small* flights first, especially for the dominant hub operator. Yes, if you're a small African / Asian airline with only a few precious slots at LHR, and you're only running longhaul service on a 777, then your only option is to upguage to something bigger (747, a380). Which is why Emirates runs A380s to a lot of slot-constrained airports. But if you're BA, you have literally hundreds of shorthaul NB flights into mundane places all over Europe. If you need more capacity into JFK/HKG/whatever, you don't upguage that route to an A380. You upguage a bunch of your daily flights into Paris, allowing you to save a slot, which you then use to launch an additional frequency. The hub operators *always* have flexibility to manage their slots in a slot-restricted airport.

2) If two airlines are competing and one has an A380 and the other flies 2 787s, all other factors being equal (e.g. hub dominance, connecting flows, etc), I would bet my money on the latter winning that competition. Any day of the week. Flexibility is key. The person who *must* sell the most seats doesn't command yields. He must accept the lowest yields, because he has no choice to say no to those customers. The one with the smaller capacity can sell to the highest bidders, and then stop selling well before the other one can.


But this is the point, specifically in the case of BA at LHR, it can only increase capacity on WB routes with one hand taking away capacity from NB elsewhere. Lightsaber makes the point that if you have 3 x 319 daily reduce it to 2 daily and add a WB slot to increase capacity. From someone who now has to live at a non hub airport and needs the connection to a hub I can tell you, LH with their 5 a day to FRA get a lot more of my business than BA with their reduced 2 to LHR for obvious connection reasons. Absolutely right, if their are plenty of slots available, or juggling of slots/schedules is easy than two 787s is going to win hands down for the reasons stated above, but this is not the case at LHR which has basically been full for 15 years and only eking out more pax with the amount of A380s and other WB that have been rotated in.

muralir wrote:
3) Cargo is *very* profitable. It's one of the main reasons the 777 is so favored for longhauls. The inability to haul large amounts of cargo (relative to its size) is absolutely a big knock against the A380 for the longhaul routes that an A380 flies. Check out this article: https://thepointsguy.com/news/how-airli ... rom-cargo/
Here's a choice quote: “On average, 50% or more of international flights are only profitable due to cargo’s contribution”

4) I'll throw you a bone on this one :-) JFK is one of the few routes where an A380 *might* make sense, simply because a) BA already flies almost hourly. So additional frequency doesn't help; b) JFK itself is tight on slots, and, not being the hub operator there, BA can't just adjust slots from other routes; c) it's a massive O&D market where BA is preferred by a large group of passengers. When all those conditions are met, yes, an A380 might allow BA to capture more passengers at a reasonable yield to make more money than a 747 or 777. But how many other markets are like that for BA, where BA doesn't already fly the A380? Heck, even Chicago, the #2 financial and business destination in the US, with similar (albeit smaller) market characteristics to JFK, can't sustain more than 1 A380 in the summer months.

Let me be clear: I'm not saying that the current A380 fleet is being badly used or isn't profitable for BA. I'll agree that they're probably doing okay with their current fleet. It's that *additional* A380s really don't make sense, because I just don't see many additional routes that need an A380.

The irony of all this is that as a passenger, I like the A380 and hate the 787. And yet I totally understand why airline executives are the exact opposite :-)


Yes granted, cargo is a very weak point of the A380 but in the case of BA, I don't believe cargo is as big a weight of thought as others such as CX etc. Don't get me wrong, as much as I too am a big fan of the A380 as a passenger, this is not a flag bearer piece for the aircraft. It doesn't work for the majority of airlines because they don't need what it gives (debated to exhaustion on other threads), but BA at LHR is a unique situation. The plane that was 'built for the airport' does in most cases work well for the airport, as you state above, and even WW has said they like what they have. My thought though is they run their aircraft long and hard and a 3rd runway at LHR is not there until 2026 at the very best. Pax globally is only going to increase, and ceteris paribas, BA/IAG probably want to be part of that. Reducing high J 747s for what is marginally above former mid J is puzzling. As you point out above, maybe not today, but certainly in the future, routes which take a 777/747 now might well profitably do with up-gauging in the future. I would have thought a mixed order would have been workable for BA, something like 2-6 more A380s and rest 779 and give them more aircraft to grow into going forwards.
 
Vladex
Posts: 362
Joined: Sat Oct 26, 2013 2:44 pm

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

Mon Apr 15, 2019 7:57 pm

Business prices are totally made up and most people don't pay them so it's not relevant
 
User avatar
flyingclrs727
Posts: 2419
Joined: Thu Apr 19, 2007 7:44 am

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

Mon Apr 15, 2019 9:07 pm

Revelation wrote:
Aither wrote:
No A380 and no more frequencies will mean more capacity and pricing pressure from competition. There is a strong value to be the dominant player on a market. The 100 additional seats of the A380 are used to kick off anybody trying to get your key O&D markets.

If it was such strong value, BA wouldn't have been rummaging through the bargain bins, they would have worked with EK to twist RR and Airbus's arms and do a proper T7000 style NEO back when they had the chance in 2014-6.

You do remember the time Airbus was saying they wanted to do an A380 NEO but would not do so just for EK, don't you?

All it would have taken IMHO was BA to commit to rolling over its A380 fleet to NEO and IMHO we'd still be seeing them made till circa 2025 or so.

The Airbus management of the time (Bregier et al) certainly did want to find a way to keep A380 alive till UltraFan could become a factor. :yes:

Yet the only way BA could make A380 pass muster was if they bought second hand models dirt cheap i.e. at scrap value, and no operator was ready to sell on those terms.

This is proof to me at least that the A380 really does not represent strong value to BA.

ElroyJetson wrote:
The A380 is an inefficient fuel guzzling dinosaur. This is particularly true with the advent of the 787, A350, and the 777X.

There is simply no solid business case for the A380 anymore. Folks, please, just let it go. Much like the 747 it's day has passed.

:checkmark:

Once the production line winds up several parts will never be made ever again and many parts will become much more expensive.

Adding used frames to a fleet that's out of production is just not a good long term move.

See our DL MD-90 thread for evidence of such.


I bet Boeing has been talking with BA about their performance numbers for the 777-9. Why would BA want to pay Airbus' prices for the A380 when they know the 777-9 will have a better CASM. At this point the A380's value for BA is its ability to conserve slots at LHR.
 
User avatar
Revelation
Posts: 21414
Joined: Wed Feb 09, 2005 9:37 pm

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

Mon Apr 15, 2019 9:33 pm

flyingclrs727 wrote:
At this point the A380's value for BA is its ability to conserve slots at LHR.

And that must not represent much value, since BA could not justify buying more new or used A380 CEOs, nor could it justify participating in the various A380 NEO proposals Airbus was floating.

My thinking mirrors:

muralir wrote:
Slot constraints generally lead to upgauging the *small* flights first, especially for the dominant hub operator. Yes, if you're a small African / Asian airline with only a few precious slots at LHR, and you're only running longhaul service on a 777, then your only option is to upguage to something bigger (747, a380). Which is why Emirates runs A380s to a lot of slot-constrained airports. But if you're BA, you have literally hundreds of shorthaul NB flights into mundane places all over Europe. If you need more capacity into JFK/HKG/whatever, you don't upguage that route to an A380. You upguage a bunch of your daily flights into Paris, allowing you to save a slot, which you then use to launch an additional frequency. The hub operators *always* have flexibility to manage their slots in a slot-restricted airport.

Thanks, muralir, for a more expansive rendering of something I was trying to express earlier in the thread.
Wake up to find out that you are the eyes of the world
The heart has its beaches, its homeland and thoughts of its own
Wake now, discover that you are the song that the morning brings
The heart has its seasons, its evenings and songs of its own
 
muralir
Posts: 102
Joined: Mon May 27, 2013 3:44 pm

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

Mon Apr 15, 2019 10:01 pm

Waterbomber2 wrote:
Differing views, interesting discussion.
I have heard many times how people are saying that BA is better served upgauging its narrowbody fleet to make better use of it slots. Some even are suggesting that the NMA would be the preferred option.

This is the problem though.
As much as London is a huge market with a lot of O&D, LHR is what it is because it's a huge connector hub first.
That is why BA operates a huge fleet of narrowbodies next to its fleet of widebodies. Do those narrowbodies fly around Europe carrying O&D to from London? Of course there is O&D, but if you are O&Ding to london there is a myriad of options: Eurostar, LCY, LTN, STN, LGW, SEN, or the road.
The higher yield shorthaul O&D's will opt for Eurostar or LCY. The budget-conscious leisure O&D's will opt for STN, LTN, Flixbus or Eurotunnel.
Somewhere in the middle you have LHR.

No matter how much BA would love to carry a max amount of O&D to/from london, their A320 fleet is there primarily to feed their huge long haul fleet.
So it's pointless to upgauge the A320 fleet if you don't grow the longhaul fleet at the same pace.

Now you can see that without larger widebodies, the narrowbodies can't grow either.
You can bring in larger A321's to maximise the slot potential. But how do you get rid of the additional pax coming off those A321s if your smaller widebodies are full to the gills because, well, they are smaller.

An A380 fleet's added capacity trickles down to the narrow body fleet which will be given the opportunity to grow in tandem. Growing the narrowbody fleet while shrinking the widebody fleet is utterly pointless.


If you upguage say 5 A319 into 4 A321s, this gives you an extra slot pair to launch a 777 longhaul. And your NB capacity has gone up (5x144 passengers = 720 vs 4x220=880). That means your NB fleet capacity *and* your longhaul capacity has increased, without using any more slots, and without needing an A380. Given how extensive BA's operations are at LHR, their fleet planners could do this all day to make up the difference between a 777 and an A380.

Yes, the fact that LHR is slot-constrained affects BA's expansion possibilities in general. But we're talking specifically about BA buying maybe an extra 6-10 A380s vs. 777-9's. Assuming these extra planes are used once daily, with a passenger count difference of say 50 pax between an A380 and a 777-9, you're talking about a daily difference of at best 500 seats, which translates to maybe 2 extra slots required to compensate for going with the 777s. Even within a capacity-constrained operation like LHR, BA's route planners could easily open up those few slots with some targeted upgauging of NB routes. And in exchange, they'll get a newer plane with better seat economics, more flexibility in route planning (due to smaller number of seats per flight, more airports that can handle the 777, etc.), and commonality with the rest of their longhaul fleet.

Now, if BA was talking about going in with a massive A380 order to essentially transform LHR into DXB-North and massively upgrade longhaul capacity, that's one thing (likely a suicidal thing :-). But adding a few additional A380s to an already small, relatively oddball fleet, when a newer generation, less expensive plane a-la the 777-9x is coming up soon, doesn't sound like a good deal unless the planes are coming for essentially free.

Also, we think of BA as essentially a single hub at LHR, but they've been expanding at LGW. I could see them routing more and more intra-european transit passengers through LGW and preserving LHR for intercontinental operations in order to deal with LHR limitations. The bottomline is that a large airline with complex networks have an almost limitless number of options for increasing / decreasing capacity, even within slot constraints and all sorts of other system limits. Adding A380s is only one option, one that's much more visible to casual observers like us, but in the end, not necessarily the most economic compared to the much less visible work of optimizing their network with other, more efficient planes.
 
Waterbomber2
Posts: 450
Joined: Mon Feb 04, 2019 3:44 am

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

Tue Apr 16, 2019 12:56 am

muralir wrote:
Waterbomber2 wrote:
Differing views, interesting discussion.
I have heard many times how people are saying that BA is better served upgauging its narrowbody fleet to make better use of it slots. Some even are suggesting that the NMA would be the preferred option.

This is the problem though.
As much as London is a huge market with a lot of O&D, LHR is what it is because it's a huge connector hub first.
That is why BA operates a huge fleet of narrowbodies next to its fleet of widebodies. Do those narrowbodies fly around Europe carrying O&D to from London? Of course there is O&D, but if you are O&Ding to london there is a myriad of options: Eurostar, LCY, LTN, STN, LGW, SEN, or the road.
The higher yield shorthaul O&D's will opt for Eurostar or LCY. The budget-conscious leisure O&D's will opt for STN, LTN, Flixbus or Eurotunnel.
Somewhere in the middle you have LHR.

No matter how much BA would love to carry a max amount of O&D to/from london, their A320 fleet is there primarily to feed their huge long haul fleet.
So it's pointless to upgauge the A320 fleet if you don't grow the longhaul fleet at the same pace.

Now you can see that without larger widebodies, the narrowbodies can't grow either.
You can bring in larger A321's to maximise the slot potential. But how do you get rid of the additional pax coming off those A321s if your smaller widebodies are full to the gills because, well, they are smaller.

An A380 fleet's added capacity trickles down to the narrow body fleet which will be given the opportunity to grow in tandem. Growing the narrowbody fleet while shrinking the widebody fleet is utterly pointless.


If you upguage say 5 A319 into 4 A321s, this gives you an extra slot pair to launch a 777 longhaul. And your NB capacity has gone up (5x144 passengers = 720 vs 4x220=880). That means your NB fleet capacity *and* your longhaul capacity has increased, without using any more slots, and without needing an A380. Given how extensive BA's operations are at LHR, their fleet planners could do this all day to make up the difference between a 777 and an A380.

Yes, the fact that LHR is slot-constrained affects BA's expansion possibilities in general. But we're talking specifically about BA buying maybe an extra 6-10 A380s vs. 777-9's. Assuming these extra planes are used once daily, with a passenger count difference of say 50 pax between an A380 and a 777-9, you're talking about a daily difference of at best 500 seats, which translates to maybe 2 extra slots required to compensate for going with the 777s. Even within a capacity-constrained operation like LHR, BA's route planners could easily open up those few slots with some targeted upgauging of NB routes. And in exchange, they'll get a newer plane with better seat economics, more flexibility in route planning (due to smaller number of seats per flight, more airports that can handle the 777, etc.), and commonality with the rest of their longhaul fleet.

Now, if BA was talking about going in with a massive A380 order to essentially transform LHR into DXB-North and massively upgrade longhaul capacity, that's one thing (likely a suicidal thing :-). But adding a few additional A380s to an already small, relatively oddball fleet, when a newer generation, less expensive plane a-la the 777-9x is coming up soon, doesn't sound like a good deal unless the planes are coming for essentially free.

Also, we think of BA as essentially a single hub at LHR, but they've been expanding at LGW. I could see them routing more and more intra-european transit passengers through LGW and preserving LHR for intercontinental operations in order to deal with LHR limitations. The bottomline is that a large airline with complex networks have an almost limitless number of options for increasing / decreasing capacity, even within slot constraints and all sorts of other system limits. Adding A380s is only one option, one that's much more visible to casual observers like us, but in the end, not necessarily the most economic compared to the much less visible work of optimizing their network with other, more efficient planes.


At airports where runway capacity is the bottleneck problem, I don't think that A320 slots count the same as B777X slots.
In addition, merging 5 A319 slots into 4 A321 means that you are no longer going to feed a longhaul departure wave somewhere. So it only works on paper.
If capacity could be merged, they would have done it already, it's not like the A321 was launched yesterday.
The fact is that short haul feeding is just as important as the long haul flights.
If you want to grow short haul, you need to grow long haul, and vice-versa.

BA is setting itself up for flatlining at best. The growth potential has been set to zero by their fleet decisions.
If major competitors such as DL start overwhelming them, BA is going to face downsizing and they wouldn't be able to do anything about it.
We'll see how this plays out.
 
jagraham
Posts: 924
Joined: Sun Jul 17, 2016 11:10 pm

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

Tue Apr 16, 2019 1:46 am

GripenFan wrote:
jagraham wrote:
...the seats should not have made that much difference. We are not hearing the whole story.


airliners.net is getting right up there with Above Top Secret and Infowars in terms of conspiracy theories, especially when it comes to why airline X or Y didn't buy more A380s...


NOT a conspiracy theory here . . new or old, BA will be buying seats if they bring in an A380. Yes, the seats in an A380 cost more, but if an A380 costs $30 million to equip with seats (assume 472 seats), the 779 will be about $23 million. The 779 is cheaper but not earth shattering. I would expect trip cost to be the true deciding factor (and not needing F gates), not $7 million or so in seats.
 
User avatar
Matt6461
Posts: 2910
Joined: Wed Oct 16, 2013 9:36 pm

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

Tue Apr 16, 2019 3:08 am

BA's calculation shows once again that the A380's lack of meaningful efficiency edge prevented it from selling better.

For a 12 year lease, a $30-50mn Capex delta works out to annual payments equivalent to 4-8% of A380's annual fuel burn depending on fuel price and utilization.

So a slightly better A388 could have sold maybe a half-dozen more new frames this year. A bigger fuel delta would have garnered more sales over each year of the program.
 
ELBOB
Posts: 295
Joined: Sun Jun 21, 2015 6:56 am

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

Tue Apr 16, 2019 6:53 am

$50 million sounds like a lot to us plebs, but in the airline world it's just daily expenses. A single Trent 900 under an A380 wing had a list price of $25 million new though I don't think airlines could even buy it for that 'little' due to additional spares and maintenance packages. The list price for a single GE9X for the 777X is $42 million.
 
oldannyboy
Posts: 2383
Joined: Wed Jun 15, 2016 8:28 am

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

Tue Apr 16, 2019 7:39 am

Vladex wrote:
He may or may not be right but whose airplanes would he take ?
BA is not really taking care of A380 anyway so why do would they bother taking more of them?
See for your self.
https://www.youtube.com/watch?v=YKLGq9GUSa4
https://www.youtube.com/watch?v=DNbBhQg-qv8


The relevance of these videos to the A380 conversation is really close to zero actually.
 
moa999
Posts: 549
Joined: Tue Mar 13, 2018 6:37 am

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

Tue Apr 16, 2019 10:41 am

While it may not have worked for BA...
You'd think at some point it has to work for someone.

Only so many A380s can be parted out before you have an oversupply of parts, and there isn't a massive amount of value in pure scrap.

On a passenger aircraft, you should be able to buy it and refit cheaper than say a new 787/350
The question becomes is what routes can you fill it ??
 
BA777FO
Posts: 348
Joined: Sun Apr 22, 2018 2:58 pm

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

Tue Apr 16, 2019 12:25 pm

Waterbomber2 wrote:
At airports where runway capacity is the bottleneck problem, I don't think that A320 slots count the same as B777X slots.
In addition, merging 5 A319 slots into 4 A321 means that you are no longer going to feed a longhaul departure wave somewhere. So it only works on paper.


I get your point on slots but that's not how it works. A slot pair is a slot pair - although a medium needs more spacing behind a heavy that doesn't mean the slot pairs are treated any differently. The flow rates are down to NATS to manage.

Also, Heathrow isn't a "banked" hub - there's no spare capacity to build waves into the operation. So that point doesn't stand either. Additionally, the ratio of connections to O&D at Heathrow is one of the lowest of the European hubs - comnections play an important role but no where near as important as they are to KLM at Amsterdam or Air France at Paris.

Waterbomber2 wrote:
If capacity could be merged, they would have done it already, it's not like the A321 was launched yesterday.
The fact is that short haul feeding is just as important as the long haul flights.
If you want to grow short haul, you need to grow long haul, and vice-versa.


They are doing it already. A321neos and A320neos are replacing A319s and older A320s. The shorthaul fleet is also being densified to have ~5% more seats per departure. The 777s are getting between 60 and 110 extra seats as they undergo densification. There's plenty of growth without requiring extra slots.

Waterbomber2 wrote:
BA is setting itself up for flatlining at best. The growth potential has been set to zero by their fleet decisions.
If major competitors such as DL start overwhelming them, BA is going to face downsizing and they wouldn't be able to do anything about it.
We'll see how this plays out.


Except it's not flatlining. Capacity at Gatwick is up over 20%, 3 777-200s are being replaced with 4 777-300ERs, 777-200ERs are being densified, additional capacity will be released to grow Gatwick. IAG's own projections show BA to grow by 2-3% per year until the end of their current business plan so the facts disprove you. Just because BA isn't buying more aircraft which they don't need, especially if a 3rd runway ever gets built, doesn't mean they're "flatlining".

How will Delta overwhelm BA? Aside from Detroit and Minneapolis BA is overwhelming them on every other route across the Atlantic from London. Delta can't obtain the slots to overwhelm BA, so that point is null and void as well.

I reckon this will play out with BA increasing its profitability.
 
tonystan
Posts: 1667
Joined: Sat Jan 07, 2006 7:39 am

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

Tue Apr 16, 2019 5:16 pm

speedbird52 wrote:
Vladex wrote:
He may or may not be right but whose airplanes would he take ?
BA is not really taking care of A380 anyway so why do would they bother taking more of them?
See for your self.
https://www.youtube.com/watch?v=YKLGq9GUSa4
https://www.youtube.com/watch?v=DNbBhQg-qv8

Not sure if the club world review is up to date. I most certainly did have three choices of starter in Club World flying form Heathrow to Seattle four days ago. The food was also very good, despite not being Do&Co. The only complaints I have were that the cabin lights were not switched off until five hours into the flight, (And only after I asked the flight attendant...) and that bedding is not provided on such a long flight.


Totally detracting from the thread so apologies but you are aware that the bedding was loaded in a pack on your seat right? It’s a dark grey White Company pack about the size of a satchel with three items inside, a mattress topper, a day blanket and a duvet which is placed under the pillow on every Club world seat on every flight even the short ones like Moscow or Beirut. You may have inadvertently placed it in the locker or the floor when boarding and the crew may have placed it securely away for takeoff but you definitely would have had bedding.

Also, LHR-SEA is a day flight, the lights as per the BA customer service standard are to remain on at a dimmed level. Yes inconsistencies do occur regularly on this topic but technically the crew simply granted a request, they didn’t do anything wrong.
My views are my own and do not reflect any other person or organisation.
 
nry
Posts: 111
Joined: Tue Aug 20, 2013 11:42 pm

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

Tue Apr 16, 2019 8:38 pm

Vladex wrote:
Business prices are totally made up and most people don't pay them so it's not relevant


LOL.

Enough said.
B727, B737, B747, B757, B767, B777, B787, DC9/MD80, DC10, MD11
A319, A320, A321, A340 (surprisingly no A330 yet)
L1011
ATR77, CRJ200, CRJ700, E145, E170, E175
 
BA777FO
Posts: 348
Joined: Sun Apr 22, 2018 2:58 pm

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

Wed Apr 17, 2019 6:28 am

tonystan wrote:
Also, LHR-SEA is a day flight, the lights as per the BA customer service standard are to remain on at a dimmed level. Yes inconsistencies do occur regularly on this topic but technically the crew simply granted a request, they didn’t do anything wrong.


This is something that has always frustrated me. After the service, turn off the lights, even on daylight service - if you want to work or read that's what your reading light is for. Even on a daylight service, flights of 7+ hours usually get a significant number of people wanting to sleep/nap, keeping the lights on doesn't help!
 
User avatar
seabosdca
Posts: 6511
Joined: Sat Sep 01, 2007 8:33 am

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

Wed Apr 17, 2019 6:54 am

Waterbomber2 wrote:
BA is well equipped for future downsizing, which is what they are already doing.
A few more airframes but smaller average frame size.
That is literally called downsizing.


Uh, no, downsizing would be reducing ASMs. There is no suggestion that BA plans to do that. BA has a deeply unique asset—a generous allocation of slots at the highest-yielding airport in the world. It can compensate for downgauging by increasing frequency, which is exactly what airlines all over the world have sought to do in recent years.

JFK-LHR is doing great. But look what they have on the route now. The queen of the skies is bringing home the profits.

There is no reason to think that the similar-sized B777X won't do the same, or is there? How does a paid-off B744 stack against a 200 mill shiny new B777X?
Can the lower fuel and maintenance bills of the B777X offset the higher capital cost in a low utilization operation such as Jfk-lhr where more time is spent on the ground parked or taxiing than flying?


The replacement for the 744 on the bulk of JFK-LHR frequencies will almost certainly be a premium-configured 787-10. Same premium capacity, three-fifths of the fuel burn, what's not to love? I'm sure 777X frames will fly some utilization rotations there in between the longer-range flights they are being purchased to serve, but the 787-10 is almost perfectly optimized, will fly the majority of flights, and will make back its capital cost ludicrously quickly.

The industry proverb "if it ain't flying, it ain't earning" reminds us that capital costs are very high in this business.
Every minute that a B777X will spend on the ground will cost BA over 30 pounds in lease costs alone.
If you have 30 of them in a fleet, that's about 1000 pounds every minute that they are on the ground.
Food for thought.


And? BA has improved its fleet utilization over the years, and they are making that money back every moment they are in the air, bringing in as much revenue as a 744 with much lower operating cost.

At the end of the day, there won't be much difference between the B744 and the B777X, cost wise.


BA, not known for wasting pennies, is putting a tremendous amount of money down on your being wrong.

And there lies the problem imo.
You don't spend billions on a new subfleet for a status-quo, when you can expand an existing A380 fleet with commonality, savings of scale, a better product, while increasing capacity and dominance on your core market.


Increasing "dominance," or just increasing seasonal risk and (given that the A380 is overweight and has aging engines) fuel burn?
 
JayinKitsap
Posts: 1478
Joined: Sat Nov 26, 2005 9:55 am

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

Wed Apr 17, 2019 7:05 am

GripenFan wrote:
jagraham wrote:
...the seats should not have made that much difference. We are not hearing the whole story.


airliners.net is getting right up there with Above Top Secret and Infowars in terms of conspiracy theories, especially when it comes to why airline X or Y didn't buy more A380s...


It was bad a decade ago, the "WN should get A380's" were quite often
 
Boeing74741R
Posts: 1189
Joined: Tue Apr 17, 2007 5:44 am

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

Wed Apr 17, 2019 11:17 am

seabosdca wrote:
The replacement for the 744 on the bulk of JFK-LHR frequencies will almost certainly be a premium-configured 787-10. Same premium capacity, three-fifths of the fuel burn, what's not to love?


Likelihood of reduced Y cabins? I understand why BA target those who would only travel Business or First, I know there's a lot of demand for these kind of cabins on the London-New York route and I know that's what makes their flights profitable (this came from a BA employee I was chatting to a few years ago and it was in general, not just NYC), but not everyone who can afford or is able to fly in those cabins is likely to share in the love as you put it.

The 747's have served BA very well over the years and I'm not arguing the fact that there are newer, far more efficient planes out there which is why some airlines have long ditched the -400's and a lot of those who still have them in their fleets have replacement plans for them.
 
A330
Posts: 709
Joined: Wed May 19, 1999 12:31 am

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

Wed Apr 17, 2019 11:44 am

Waterbomber2 wrote:
Interior mod prices for the A380 are being exagerated.
It should be the same pro rata as any other airliner, airlines have just been using this as an excuse.
The fact is that BA is doing fine for now, but they are setup for a dwindling future.
LHR will progressively lose relevance as other London airports grow, and point to point options bypass hubs such as LHR.

By letting the A380 die, BA is going against its core business model centered around the LHR mega hub. Point to point from a mega hub is not a strategy, it's an invitation to be overwhelmed by competition.
The B777X can fulfill the same role as the B744 and do it slightly better.
But the A380 could have offered BA much much more.

Going for B777X over A380 was a strategic mistake for BA, while Airbus should have done more to get BA to commit to the A380.
Lose-lose. Only Boeing won.

We'll see.
That BA is losing relevance in all its markets, from Asia to TATL and the Kangaroo route is a certainty. Short-term profits, long-term disaster.



Air Atlanta Icelandic was offered used A380’s by Airbus recently. They asked for 30 million US$ to change the cabin layout. AAI wisely sent them back to Toulouse...
Hifly is draining money with their sole A380 at the moment by the way. If you have no long-term ACMI placement, this bird will kill your company.
Shiek!
 
moa999
Posts: 549
Joined: Tue Mar 13, 2018 6:37 am

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

Wed Apr 17, 2019 2:31 pm

Depends what you're paying for it.
HiFly had almost nothing internal mods, engines presumably on power by hour deal..

Still waiting to understand their summer customer
 
oldannyboy
Posts: 2383
Joined: Wed Jun 15, 2016 8:28 am

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

Wed Apr 17, 2019 3:32 pm

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.
 
User avatar
Polot
Posts: 9478
Joined: Thu Jul 28, 2011 3:01 pm

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

Wed Apr 17, 2019 3:48 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.

Again you are not considering plumbing, wiring, and galley changes to get to BA standards. It is not just switching seats. EK’s A380s, for example, has showers. BA’s does not. Do you think every A380 is plumbed to allow showers in the forward upper deck? Do you think BA wants to haul around empty plumbing and water tanks if they pick up a used EK A380. Other A380s may not have the exact electrical needs for BA’s first class cabin (because they had something else there that have different requirements), and so on and so forth.

Airbus allowed extensive customization for the A380, that was one of its selling points (and also something they used to blame delays, high prices, etc). You can’t assume that every A380 out there just matches what BA’s interiors need to function. Or you end up with a hodgepodge of various different configurations and seat types.
 
oldannyboy
Posts: 2383
Joined: Wed Jun 15, 2016 8:28 am

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

Wed Apr 17, 2019 3:57 pm

Polot wrote:
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.

Again you are not considering plumbing, wiring, and galley changes to get to BA standards. It is not just switching seats. EK’s A380s, for example, has showers. BA’s does not. Do you think every A380 is plumbed to allow showers in the forward upper deck? Do you think BA wants to haul around empty plumbing and water tanks if they pick up a used EK A380. Other A380s may not have the exact electrical needs for BA’s first class cabin (because they had something else there that have different requirements), and so on and so forth.

Airbus allowed extensive customization for the A380, that was one of its selling points (and also something they used to blame delays, high prices, etc). You can’t assume that every A380 out there just matches what BA’s interiors need to function. Or you end up with a hodgepodge of various different configurations and seat types.


Yeah, you are indeed right - I can see your point. And I agree with you really. I am just not believing the numbers.
Also, would having a sub-fleet of A380s with a different configuration be SUCH a drastic limitation for BA? I mean, it's not as if they are the best at standardization anyway. They have quite the hodgepodge of configurations anyway.
 
speedbird52
Posts: 769
Joined: Sat Nov 26, 2016 5:30 am

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

Wed Apr 17, 2019 4:30 pm

tonystan wrote:
speedbird52 wrote:
Vladex wrote:
He may or may not be right but whose airplanes would he take ?
BA is not really taking care of A380 anyway so why do would they bother taking more of them?
See for your self.
https://www.youtube.com/watch?v=YKLGq9GUSa4
https://www.youtube.com/watch?v=DNbBhQg-qv8

Not sure if the club world review is up to date. I most certainly did have three choices of starter in Club World flying form Heathrow to Seattle four days ago. The food was also very good, despite not being Do&Co. The only complaints I have were that the cabin lights were not switched off until five hours into the flight, (And only after I asked the flight attendant...) and that bedding is not provided on such a long flight.


Totally detracting from the thread so apologies but you are aware that the bedding was loaded in a pack on your seat right? It’s a dark grey White Company pack about the size of a satchel with three items inside, a mattress topper, a day blanket and a duvet which is placed under the pillow on every Club world seat on every flight even the short ones like Moscow or Beirut. You may have inadvertently placed it in the locker or the floor when boarding and the crew may have placed it securely away for takeoff but you definitely would have had bedding.

Also, LHR-SEA is a day flight, the lights as per the BA customer service standard are to remain on at a dimmed level. Yes inconsistencies do occur regularly on this topic but technically the crew simply granted a request, they didn’t do anything wrong.

The crew were excellent, my issue has more to do with the policy. Also, I believe I may have accidentally used the duvet as a blanket, thank you for pointing this out.
 
Waterbomber2
Posts: 450
Joined: Mon Feb 04, 2019 3:44 am

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

Wed Apr 17, 2019 6:52 pm

Polot wrote:
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.

Again you are not considering plumbing, wiring, and galley changes to get to BA standards. It is not just switching seats. EK’s A380s, for example, has showers. BA’s does not. Do you think every A380 is plumbed to allow showers in the forward upper deck? Do you think BA wants to haul around empty plumbing and water tanks if they pick up a used EK A380. Other A380s may not have the exact electrical needs for BA’s first class cabin (because they had something else there that have different requirements), and so on and so forth.

Airbus allowed extensive customization for the A380, that was one of its selling points (and also something they used to blame delays, high prices, etc). You can’t assume that every A380 out there just matches what BA’s interiors need to function. Or you end up with a hodgepodge of various different configurations and seat types.


Galleys are modular units. If the wiring is standard, then it's plug and play. Removing it is unplug and done.

Removing plumbing can be done as part of a C-check if access allows it. If there is no access, you empty the plumbing and cap it. Overall, the weight of the plumbing and systems that are not removable is probably going to be like 0.001% of the total aircraft weight. The dust that accumulates iver the years is probably going to exceed that weight.

The real issue and costs are not the galleys, lavatories and such, it's the cabin fittings pertaining to passengers.
Removing a cabin class to install a different one for instance, results in a lot of work because you need to remove/install IFE, air vent ducts, personal lighting, call buttons. In terms of materials, cabin fittings, seats and IFE are going to be major cost centers.

But 50 million gets you a new A320, so that is grossly exagerated. For 50 million, you can probably convert it into a flying palace configuration, with gold handles, bedrooms, missile warnings and anti-missile flares.
Perhaps we should differentiate between what executives are dreaming to have for Christmas and what the airline needs.

If you fi d used aircraft in the configuration that you require and limit yourself to changing seat covers, applying branding and fixing a few things right and left, you should be able to get it done within 10 million. Ask Hifly.
It's ok to have different products within the same fleet. Even if they look different, it's the level of comfort that matters and it's not like BA's hard or soft products are anything to brag about.
 
nikeherc
Posts: 660
Joined: Thu Sep 13, 2012 8:40 pm

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

Wed Apr 17, 2019 7:15 pm

Galleys are modular units. If the wiring is standard, then it's plug and play. Removing it is unplug and done.

Removing plumbing can be done as part of a C-check if access allows it. If there is no access, you empty the plumbing and cap it. Overall, the weight of the plumbing and systems that are not removable is probably going to be like 0.001% of the total aircraft weight. The dust that accumulates iver the years is probably going to exceed that weight.

That may be true if you are removing these items. If you are adding them, you would need plumbing and electrical connectivity at the new locations. If you are adding or removing seats, you will need to add or remove the customer support features. Even if you don't wind up with a bog standard aircraft for you fleet, you do need to make sure that the branding and amenities are pretty darn close to the rest of your fleet. If the man said $50 million, it is probably close.
DC6 to 777 and most things in between
 
JayinKitsap
Posts: 1478
Joined: Sat Nov 26, 2005 9:55 am

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

Wed Apr 17, 2019 8:19 pm

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.
 
Waterbomber2
Posts: 450
Joined: Mon Feb 04, 2019 3:44 am

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

Wed Apr 17, 2019 8:50 pm

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.


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").


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.

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...


IMHO Cruz is steering BA into dangerous waters.
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

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.
Last edited by Waterbomber2 on Wed Apr 17, 2019 9:17 pm, edited 2 times in total.
 
jomur
Posts: 222
Joined: Sun Jun 19, 2016 6:36 pm

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

Wed Apr 17, 2019 9:14 pm

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

Popular Searches On Airliners.net

Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

Military Aircraft Every type from fighters to helicopters from air forces around the globe

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos