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scbriml
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Re: AF signs MOU for 60 A220 plus 30 options and 30 purchase rights, A380's to be retired by 2022

Thu Aug 08, 2019 12:43 pm

VV wrote:
First I am not sure the MTOW increase if retrofit table to the current fleet.
Even if it is the case there will be induced cost for recertification of individual aircraft that also include the documentation. It it not just "paper certification" there's a lot to do and it costs a lot of man-hours.

Would an airline spend money on something they do not need?

Now, let's assume they want to do the very hypothetical routes you mentioned. Do they need to retrofit all aircraft in the fleet to achieve the high MTOW? That's costs.


The additional MTOW is very unlikely to be available as a retrofit. If you accept that, then your other questions become moot.

VV wrote:
Do they want to have a subfleet with hight MTOW? That's two sets of everything.

I still think it doesn't make sense for Delta to have the A220 with the high MTOW, especially when they have other narrowbody to address other exotic things you mentioned.


Clearly Delta sees a need for the higher MTOW and has ordered accordingly. It may be that the additional cost for the higher MTOW version is something they're prepared to pay in return for the extra flexibility it gives them. They clearly see a benefit, otherwise they wouldn't have ordered them.

It appears to make sense to them (which is all that matters).
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lightsaber
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Re: AF signs MOU for 60 A220 plus 30 options and 30 purchase rights, A380's to be retired by 2022

Thu Aug 08, 2019 3:02 pm

VV wrote:
lightsaber wrote:
Why? They and KE were two airlines asking for it.

Perhaps DL is going to connect Alaska and southern foreign destinations? Perhaps Caribean to further.

...

Lightsaber


Why? It's very simple.

First I am not sure the MTOW increase if retrofit table to the current fleet.
Even if it is the case there will be induced cost for recertification of individual aircraft that also include the documentation. It it not just "paper certification" there's a lot to do and it costs a lot of man-hours.

Would an airline spend money on something they do not need?

Now, let's assume they want to do the very hypothetical routes you mentioned. Do they need to retrofit all aircraft in the fleet to achieve the high MTOW? That's costs.

Do they want to have a subfleet with hight MTOW? That's two sets of everything.

I still think it doesn't make sense for Delta to have the A220 with the high MTOW, especially when they have other narrowbody to address other exotic things you mentioned.

Please remember that yields usually drops with stage length. You would prefer have bigger aircraft for long routes.

The MTOW increase was analysis/license. To my knowledge, there is no physical change to the aircraft, just buying the right paper and updating the maintenance plan.

Delta requested the update. So obviously it makes sense to them.

As an AirFrance thread, it makes sense to me for them to buy it.

Other than fractionally higher ATC fees and the licence/maintenance costs, why wouldn't DL buy the flexibility? Why wouldn't AF?

Every MTOW increase I ever worked sold far better than expectations. This one seems to, as we Americans say, hit the ball out of the park. Clean out of the park...

CFRP is wonderful. It is always built first with too much margin, then MTOW is increased.

AirFrance would be able to use the highest MTOW for great flexibility to/from Africa.

Just as AirFrance would benefit from a higher MTOW 787-10, possibly their next order.

When someone has already paid for something, it is best to ask why they did instead of claiming it makes no sense. The MTOW increase for the A220 is in such demand a future increase, with structural changes, only makes sense.

Before my very first aerospace engineering meeting with a customer, my manager warned us "smile when they throw money our way and tell them the advantages of buying the PiP. Never tell them they don't need it as we always find other customers willing to buy that PiP." In that meeting we convinced the customer to give us $500,000 more profit per engine. Later the customer showed me how it increased their profit $500,000/year per aircraft with the PiP.

Delta knows how to make money. If they want a MTOW increase, they get it. I have no idea if they paid a fee or if it was agreed to as part of a top off order.

Lightsaber
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VV
Posts: 839
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Re: AF signs MOU for 60 A220 plus 30 options and 30 purchase rights, A380's to be retired by 2022

Thu Aug 08, 2019 3:12 pm

Well, if they want to pay for something very hypothetical in the future then it's okay for me.
I won't spend anything since that's not my airline.

I just find it extremely strange a cost conscious airline would do that.
 
PHLCVGAMTK
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Re: AF signs MOU for 60 A220 plus 30 options and 30 purchase rights, A380's to be retired by 2022

Thu Aug 08, 2019 6:16 pm

lightsaber wrote:
This is why the A380 is going. The last seats sell too cheap. The same market forces work on the narrowbody market, just with different constants in the equation.

P2P is here. Long haul (787/A350), mid haul (xLR, possible 797), or short (now out to 3300nm still air).

AF must rationalize their long haul network. Triangle routes are despised by the highest yield customers. Get them off private jets, back into J by offering a competitive route structure that avoids less than daily frequency and stopping points.

It sounds like AF's management is waking up to their primary revenue issues. They'll need to do a lot more on costs, but this is an encouraging start.


It's worth noting that another consequence of the A380 and its yields for AF, is that it's very late to the party in terms of fragmenting its TATL nonstops. AF and its JV partners do not fly nonstop from Paris to EWR (!), PHL (seasonal DL ended 2017), PIT (seasonal DL ended 2018), and other large and midsized destinations that sit in the heart of B757/A321XLR range. The complaint is often made here, that the three big TATL JVs are bad for competition; if we take that complaint at face value, how much worse is it when one of the three just doesn't show up? Not having to protect the yields on the A380 flights out of JFK won't be a magic bullet, but it will make adding spokes throughout the Northeast US much more feasible.
 
wrongwayup
Posts: 372
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Re: AF signs MOU for 60 A220 plus 30 options and 30 purchase rights, A380's to be retired by 2022

Thu Aug 08, 2019 9:59 pm

VV wrote:
Well, if they want to pay for something very hypothetical in the future then it's okay for me.
I won't spend anything since that's not my airline.

I just find it extremely strange a cost conscious airline would do that.


MTOW is all about revenue generation. You're correct that yields fall at longer ranges, but so do costs. And flying one passenger direct versus between the same O&D pair connecting, is far cheaper, especially when an A220-100 has the same economcs as the NGs/CEOs (to say nothing of the RJs) connecting between hubs. Delta knows what they're doing here.
 
VV
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Re: AF signs MOU for 60 A220 plus 30 options and 30 purchase rights, A380's to be retired by 2022

Thu Aug 08, 2019 10:37 pm

wrongwayup wrote:
VV wrote:
Well, if they want to pay for something very hypothetical in the future then it's okay for me.
I won't spend anything since that's not my airline.

I just find it extremely strange a cost conscious airline would do that.


MTOW is all about revenue generation. You're correct that yields fall at longer ranges, but so do costs. And flying one passenger direct versus between the same O&D pair connecting, is far cheaper, especially when an A220-100 has the same economcs as the NGs/CEOs (to say nothing of the RJs) connecting between hubs. Delta knows what they're doing here.


It is about potential revenue generation. The reality is that very-very few Delta's routes are above 2,000 nm. In addition they already have a lot of narrowbody to do those long missions.

The dream about thin long routes below 150 seat is just a dream. Small aircraft are mostly for short distances. The yield goes down quickly such that the only way to get a profitable "thin" route is to have an aircraft with high fare. I am not sure the one or two hours extra journey is worth the hundreds of dollars to spend. In addition those high yield aircraft will need to have specific configuration.

You say that Delta knows what they are doing. I sincerely hope they know what they are doing. This said, I find it extremely strange they would make their operation more expensive and more complicate with possible double documentation and sub-fleet.
Again, if they want to do it then it is okay for me. It is not my money, but I would find it a little bit stupid considering the navigation fees and landing fees that would potentially increase.

But hey, it is really not my money.
 
ZPhoto
Posts: 8
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Re: AF signs MOU for 60 A220 plus 30 options and 30 purchase rights, A380's to be retired by 2022

Thu Aug 08, 2019 10:39 pm

About the A220-500 stretch... would it be a 100% Airbus plane or 50.01%? Would Bombardier have a stake in the new plane?
 
jbs2886
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Re: AF signs MOU for 60 A220 plus 30 options and 30 purchase rights, A380's to be retired by 2022

Thu Aug 08, 2019 11:08 pm

VV wrote:
wrongwayup wrote:
VV wrote:
Well, if they want to pay for something very hypothetical in the future then it's okay for me.
I won't spend anything since that's not my airline.

I just find it extremely strange a cost conscious airline would do that.


MTOW is all about revenue generation. You're correct that yields fall at longer ranges, but so do costs. And flying one passenger direct versus between the same O&D pair connecting, is far cheaper, especially when an A220-100 has the same economcs as the NGs/CEOs (to say nothing of the RJs) connecting between hubs. Delta knows what they're doing here.


It is about potential revenue generation. The reality is that very-very few Delta's routes are above 2,000 nm. In addition they already have a lot of narrowbody to do those long missions.

The dream about thin long routes below 150 seat is just a dream. Small aircraft are mostly for short distances. The yield goes down quickly such that the only way to get a profitable "thin" route is to have an aircraft with high fare. I am not sure the one or two hours extra journey is worth the hundreds of dollars to spend. In addition those high yield aircraft will need to have specific configuration.

You say that Delta knows what they are doing. I sincerely hope they know what they are doing. This said, I find it extremely strange they would make their operation more expensive and more complicate with possible double documentation and sub-fleet.
Again, if they want to do it then it is okay for me. It is not my money, but I would find it a little bit stupid considering the navigation fees and landing fees that would potentially increase.

But hey, it is really not my money.


We get it. You don’t agree. Please stop hijacking the AF thread to discuss DL.
 
wrongwayup
Posts: 372
Joined: Thu Jan 07, 2016 6:23 pm

Re: AF signs MOU for 60 A220 plus 30 options and 30 purchase rights, A380's to be retired by 2022

Thu Aug 08, 2019 11:32 pm

VV wrote:

It is about potential revenue generation. The reality is that very-very few Delta's routes are above 2,000 nm. In addition they already have a lot of narrowbody to do those long missions.

The dream about thin long routes below 150 seat is just a dream. Small aircraft are mostly for short distances. The yield goes down quickly such that the only way to get a profitable "thin" route is to have an aircraft with high fare. I am not sure the one or two hours extra journey is worth the hundreds of dollars to spend. In addition those high yield aircraft will need to have specific configuration.

You say that Delta knows what they are doing. I sincerely hope they know what they are doing. This said, I find it extremely strange they would make their operation more expensive and more complicate with possible double documentation and sub-fleet.
Again, if they want to do it then it is okay for me. It is not my money, but I would find it a little bit stupid considering the navigation fees and landing fees that would potentially increase.

But hey, it is really not my money.


All revenue is "potential" until you go and fly it. Small aircraft have been mostly for short distances in the past because there was never a small aircraft with the capability to fly any further than 2000nm or so in the first place. This is all about new opportunity. Revenue and profit that was either not flying at all, or flying on your competitor. Yes - there will be some traffic that Delta had been previously carrying as connecting traffic, but at current 88% load factors they're already spilling more than you'll cannibalize and so could use the capacity.

Passengers want frequent, direct flights - they will pick a direct flight on your airline over connecting on another and pay more to do so. I shouldn't have to cite sources here, this is fairly well established fact. The case in point is the 787 It blew open direct connectivity smaller market flying for a lot of carriers. Many who ordered it to replace the 767, ended up keeping the 67s and flew the 87s on new markets. Ben Smith saw this at AC and has now committed two world-leading airlines to this concept on the A220. David Neeleman is launching an airline entirely based on this concept. Compare airBaltic's route map with what they flew with the 737 Classics - Abu Dhabi is a LONG way from Riga.

I think you're missing the forest for the trees here, the cost of weight is really insignificant in the grand scheme of things. The cost to the airline to go from basic to the highest weight is <10% of the capital cost of an airplane. Delta's capital cost of everything in the entire airline, plus aircraft rents (i.e. the sum of the depreciation and amortization and aircraft rent line items from their latest earnings report) is <8% of total operating cost. We are talking about literal fractions of fractions of the cost of running an airline.

Network airlines are masters of managing complexity. When you see inside a modern operations control center for one of the big three, it becomes immediately obvious. There are also commercial ways to mitigate complexity, for example a pay-per-use weight agreement from the OEM. Ditto with weight-based charges like enroute and landing fees.

I really don't understand why you're digging in on an opinion that differs so drastically from a decision made by a team of experienced professionals with access to information that is more accurate, complete, and precise than yours.
 
T4thH
Posts: 292
Joined: Thu Jun 06, 2019 11:17 pm

Re: AF signs MOU for 60 A220 plus 30 options and 30 purchase rights, A380's to be retired by 2022

Fri Aug 09, 2019 12:02 am

VV wrote:
wrongwayup wrote:
VV wrote:
Well, if they want to pay for something very hypothetical in the future then it's okay for me.
I won't spend anything since that's not my airline.

I just find it extremely strange a cost conscious airline would do that.


MTOW is all about revenue generation. You're correct that yields fall at longer ranges, but so do costs. And flying one passenger direct versus between the same O&D pair connecting, is far cheaper, especially when an A220-100 has the same economcs as the NGs/CEOs (to say nothing of the RJs) connecting between hubs. Delta knows what they're doing here.


It is about potential revenue generation. The reality is that very-very few Delta's routes are above 2,000 nm. In addition they already have a lot of narrowbody to do those long missions.

The dream about thin long routes below 150 seat is just a dream. Small aircraft are mostly for short distances. The yield goes down quickly such that the only way to get a profitable "thin" route is to have an aircraft with high fare. I am not sure the one or two hours extra journey is worth the hundreds of dollars to spend. In addition those high yield aircraft will need to have specific configuration.

You say that Delta knows what they are doing. I sincerely hope they know what they are doing. This said, I find it extremely strange they would make their operation more expensive and more complicate with possible double documentation and sub-fleet.
Again, if they want to do it then it is okay for me. It is not my money, but I would find it a little bit stupid considering the navigation fees and landing fees that would potentially increase.

But hey, it is really not my money.


Sorry, but are you aware, with increasing MTOW, you have either to pay more, or less? It depends on the airport. As example, Germany.
"Regional airport":
Nuremberg airport: Here the increase of weight will cost more. The 2.4 t increase will cost 4.18 € per t (started at total MTOW) more for a start and landing (So start and landing together little more than 16€, if you reach 3 t more, than 24€). Gateway fees and out field fees are also MTOW depended, but only if you park more than 90 min at gateways and more than 4 h at outfield, less is free of charge.
https://www.airport-nuernberg.de/flughafenentgelte-770d9326c17c504a
Only in German.

International airport.
Frankfurt airport. By bad luck, the A220-100 with MTOW increase will be still little bit to light, only by few hundred kg. With more than 66 t, you have not to pay the start and landing (fee once for start and once for landing). A220-300 is free of charge of start and landing fee as MTOW is above 66 t (with and without MTOW increase)
The fees for noise level and NOx level are several times more important. Noise level: it starts per movement with around 80 € and ends up around at 22.000 €. and during evening and night it gets more expensive. So the noiseless and NOx less A220 family will have such a big benefit....So do not fly with an AN124 to Frankfurt it is in the highest of all classes. A start in the middle of the night will cost 66.000 and a landing again the same. (only the noise level + additional all other fees).
Landing and start fees according MTOW:
more than 66 t: free of charge
35 t to 66 t: around 34 €
15 t to 35 t:: around 137 €
up to 15 t: around 226.4 €
https://www.fraport.de/content/fraport/de/business-partner/airlines-cargo/flughafenentgelte.html
*.pdf*s are in German and English.

International Airport Munich:
Start and landing-fees are MTOW dependent. 2.77 € per started t. So something around 11 € more for start and landing together (or around 16 €, if increased MTOW will be more than 3 t started). Also here, fees regarding noise and NOx are several times more important.
https://www.munich-airport.de/flughafenentgelte-1311759
*.pdf*s are in German and English.

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