Scotron12
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Re: Reuters: Tim Clark: won't take new planes unless engines are truly ready

Sat Sep 07, 2019 6:27 pm

As Lightsaber rightly mentions, BA..UA and AA were late operators of the 77W. In fact, WW at BA says he would have ordered more at the time if he had known just how good an airplane it turned out to be.

Having said that..AA and UA would be a long time from considering the 779 seeing as they are all pretty new..plus UA still has 4 77Ws on order IIRC.
 
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Re: Reuters: Tim Clark: won't take new planes unless engines are truly ready

Sat Sep 07, 2019 6:53 pm

musman9853 wrote:
SEPilot wrote:
The 77W hit a sweet spot in the market with no competition, a situation that is unlikely to ever happen again. It offered stellar range AND CASM that only the A380 could beat, but not by enough of a margin to justify the huge increase in capacity and cost. Until the 787 and A350 became available if you wanted to fly long-haul, your choices were the 77W, the A340, the A380, or the 747. Out of those the 77W was an easy choice, and the one most airlines made. And the time period where this was the choice was long enough for the 77W to pile up very impressive sales. And it still compares well enough to the new offerings (787, A350 and 77X) that airlines flying them will be in no hurry to replace them.



Not to mention airlines are still taking newbuild 77ws even when 787/a350 etc are available

True, but that is most likely because of price and availability. You can have an A3510 in, what, 2025 or you can have a 77W next year for around 2/3 the price. If an airline needs lift NOW it is a reasonable option. But your point is valid; if it’s economics were that much worse no airline would take them. Just look at how many took A346s after the 77W proved what it could do in spite of all the inducements John Leahy could conjure up.
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Re: Reuters: Tim Clark: won't take new planes unless engines are truly ready

Sat Sep 07, 2019 7:47 pm

Scotron12 wrote:
As Lightsaber rightly mentions, BA..UA and AA were late operators of the 77W. In fact, WW at BA says he would have ordered more at the time if he had known just how good an airplane it turned out to be.

Having said that..AA and UA would be a long time from considering the 779 seeing as they are all pretty new..plus UA still has 4 77Ws on order IIRC.

I agree AA and UA will take a long time evaluating the 779, I would add DL.

If performance beats expectations, earlier.

Rumors are starting with EK's last 77W order, Boeing and GE dropped pricing. This allows for an earlier retirement (assuming tax law complies, as it does for US and AA).
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Re: Reuters: Tim Clark: won't take new planes unless engines are truly ready

Sat Sep 07, 2019 8:09 pm

lightsaber wrote:
That depends if the 779 meets or beats, a la 77W, the promised performance. If it beats, US3, ME3, EU3, CH3, ANA, JAL, TK, ET, and possibly a few more. If it only makes promise, fewer.


lightsaber wrote:
Scotron12 wrote:
As Lightsaber rightly mentions, BA..UA and AA were late operators of the 77W. In fact, WW at BA says he would have ordered more at the time if he had known just how good an airplane it turned out to be.

Having said that..AA and UA would be a long time from considering the 779 seeing as they are all pretty new..plus UA still has 4 77Ws on order IIRC.

I agree AA and UA will take a long time evaluating the 779, I would add DL.

If performance beats expectations, earlier.

Rumors are starting with EK's last 77W order, Boeing and GE dropped pricing. This allows for an earlier retirement (assuming tax law complies, as it does for US and AA).

IAG and LH Group are 777X customers, would not be surprised if AF/KL eventually join, KE too.
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Re: Reuters: Tim Clark: won't take new planes unless engines are truly ready

Sat Sep 07, 2019 8:49 pm

RJMAZ wrote:
I have no idea why Emirates does not have a huge fleet of GE powered 787-10's.


EK is still trying to get a deal it likes out of any combination of airframe and engine OEMs. That is an entirely possible outcome.

h1fl1er wrote:
He's not looking for an engine; he wants a plane. The 350 is not that plane and neither is any other currently in-production frame.


That's very unclear. What he doesn't want is to sign a contract at current (1) pricing and (2) levels of risk. He is trying to get OEMs to either sell him cheaper equipment, retire some of the risk around things like engine-related groundings, or both.

As far as what he actually wants in the end, my guess is a combination of 787s, A350s, and 777-9s, all at rock-bottom prices. I'll put my marker in the sand: 30x 787-9, 50x 787-10, 60x A350-1000 (with half being HGW variants for ULH), 60x 777-9.
 
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Re: Reuters: Tim Clark: won't take new planes unless engines are truly ready

Sat Sep 07, 2019 9:00 pm

ewt340 wrote:
I feel like they would be changing their strategy soon enough. The A380/B777-300ER era might be ending sooner than we are expecting.

I won't be surprised if B787-9 and A350-900 became the face of Emirates in upcoming future.



EKs model requires some number of A380s. They fly 6 per day to LHR and it is doubtful that they will get any more slots. Smaller planes mean fewer passengers, and to places like LHR they need a lot of seats to satisfy the demand to fly to LHR across their network.

As for the others destinations, it may be that EK wants to have fewer cheap seats. It will be interesting to see how such a strategy works versus P2P flying over the years. But most P2P flying in competition with EK destination to destination flying is ULH flying and it would seem that it will remain cheaper to stop in DXB. But if the strategy works, EK flies a lot of their legs on A350s / A339s / (maybe 78Js), and saves a lot of fuel. If.
 
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Re: Reuters: Tim Clark: won't take new planes unless engines are truly ready

Sat Sep 07, 2019 9:39 pm

jagraham wrote:
ewt340 wrote:
I feel like they would be changing their strategy soon enough. The A380/B777-300ER era might be ending sooner than we are expecting.

I won't be surprised if B787-9 and A350-900 became the face of Emirates in upcoming future.



EKs model requires some number of A380s. They fly 6 per day to LHR and it is doubtful that they will get any more slots. Smaller planes mean fewer passengers, and to places like LHR they need a lot of seats to satisfy the demand to fly to LHR across their network.

As for the others destinations, it may be that EK wants to have fewer cheap seats. It will be interesting to see how such a strategy works versus P2P flying over the years. But most P2P flying in competition with EK destination to destination flying is ULH flying and it would seem that it will remain cheaper to stop in DXB. But if the strategy works, EK flies a lot of their legs on A350s / A339s / (maybe 78Js), and saves a lot of fuel. If.


TK is doing that to some degree using a combination of all types of aircraft from narrowbodies to the bigger widebodies.
Point to point via IST. Their yields are sh*t especially in premium cabins, the model just doesn't work with a large premium cabin on a smaller widebody.

On a big widebody, even if the yields are bad in the premium cabin, if they can get enough out of the economy cabin, it is sustainable. Not profitable, but sustainable.

The B787-10 is the most efficient of the B787 family, no doubt.
Where are the orders though? Even big B787 customers with an obvious use for them are not taking any of them.
Boeing is probably asking too much premium for them.
So fuel efficient yes, but not necessarily cheaper to operate.
 
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Re: Reuters: Tim Clark: won't take new planes unless engines are truly ready

Sat Sep 07, 2019 11:31 pm

jagraham wrote:
ewt340 wrote:
I feel like they would be changing their strategy soon enough. The A380/B777-300ER era might be ending sooner than we are expecting.

I won't be surprised if B787-9 and A350-900 became the face of Emirates in upcoming future.



EKs model requires some number of A380s. They fly 6 per day to LHR and it is doubtful that they will get any more slots. Smaller planes mean fewer passengers, and to places like LHR they need a lot of seats to satisfy the demand to fly to LHR across their network.

As for the others destinations, it may be that EK wants to have fewer cheap seats. It will be interesting to see how such a strategy works versus P2P flying over the years. But most P2P flying in competition with EK destination to destination flying is ULH flying and it would seem that it will remain cheaper to stop in DXB. But if the strategy works, EK flies a lot of their legs on A350s / A339s / (maybe 78Js), and saves a lot of fuel. If.

Too much of that demand isn't profitable. EK must downsize as is noted. Going from 115 to 90 to 100 A380s isn't a big deal.

The competition isn't just ULH. It is going to be widebodies from other London airports bypassing Dubai. The ULH is the most dramatic and highest premium bypass.

Direct flights always have higher yield. The A321xlr at Indigo will drain some EK yield. NEOs and MAXs flying direct will bypass EK.

The new planes cost less per passenger and since they are smaller, significantly less per flight. New routes will open up.

As you note, EK needs fewer cheap seats. With only 2% profit, far fewer. Even to London. But the bigger issue is pricey seats desire to bypass the hub. BA with their huge number of LHR slots can up gauge narrowbody flights to free up frequencies for A350s or 787-10s to bypass EK.

Most destinations are not slot limited, so as cheaper to fly aircraft bypass hubs, yield drops.

EK must cut capacity to raise yield. Hotel yields in Dubai dropped 10% YoY, so the city looks to be losing premium traffic.

https://gulfnews.com/amp/business/touri ... 1.66064412

EK must adapt.

Lightsaber
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Re: Reuters: Tim Clark: won't take new planes unless engines are truly ready

Sat Sep 07, 2019 11:39 pm

Waterbomber2 wrote:
Where are the orders though? Even big B787 customers with an obvious use for them are not taking any of them.


Remember that Boeing is, for the moment, capacity constrained on 787-10s. 787 production is currently 50/50 between Everett and Charleston, and 787-10s can only be built in Charleston, because the center section (made in Charleston) is too long to fit on a Dreamlifter. Until they can ramp up production in Charleston, Boeing is going to have an incentive to demand a price premium on the 787-10.

I think they will drop the price a bit as the 787 backlog continues to shrink, but for the moment you'll continue to see some airlines that you might expect to order 787-10s order more 787-9s instead. The airlines that will get 787-10s are the blue chips and the ones for whom it will generate the highest revenue premium.
 
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Re: Reuters: Tim Clark: won't take new planes unless engines are truly ready

Sun Sep 08, 2019 12:37 am

lightsaber wrote:
jagraham wrote:
ewt340 wrote:
I feel like they would be changing their strategy soon enough. The A380/B777-300ER era might be ending sooner than we are expecting.

I won't be surprised if B787-9 and A350-900 became the face of Emirates in upcoming future.



EKs model requires some number of A380s. They fly 6 per day to LHR and it is doubtful that they will get any more slots. Smaller planes mean fewer passengers, and to places like LHR they need a lot of seats to satisfy the demand to fly to LHR across their network.

As for the others destinations, it may be that EK wants to have fewer cheap seats. It will be interesting to see how such a strategy works versus P2P flying over the years. But most P2P flying in competition with EK destination to destination flying is ULH flying and it would seem that it will remain cheaper to stop in DXB. But if the strategy works, EK flies a lot of their legs on A350s / A339s / (maybe 78Js), and saves a lot of fuel. If.

Too much of that demand isn't profitable. EK must downsize as is noted. Going from 115 to 90 to 100 A380s isn't a big deal.

The competition isn't just ULH. It is going to be widebodies from other London airports bypassing Dubai. The ULH is the most dramatic and highest premium bypass.

Direct flights always have higher yield. The A321xlr at Indigo will drain some EK yield. NEOs and MAXs flying direct will bypass EK.

The new planes cost less per passenger and since they are smaller, significantly less per flight. New routes will open up.

As you note, EK needs fewer cheap seats. With only 2% profit, far fewer. Even to London. But the bigger issue is pricey seats desire to bypass the hub. BA with their huge number of LHR slots can up gauge narrowbody flights to free up frequencies for A350s or 787-10s to bypass EK.

Most destinations are not slot limited, so as cheaper to fly aircraft bypass hubs, yield drops.

EK must cut capacity to raise yield. Hotel yields in Dubai dropped 10% YoY, so the city looks to be losing premium traffic.

https://gulfnews.com/amp/business/touri ... 1.66064412

EK must adapt.

Lightsaber


I must correct you on many regards.

Superhubs can't cut capacity to increase yields, because whatever capacity they cut will result in demand flowing through other superhubs. If EK wants to downsize, there will be 30 competitors waiting to take-over that market share, even if it's at the bottom of the market.
EK replaces A380's by B779's in LHR or even AMS? No problem, people in London or Amsterdam still have plenty of options to fly to where they need to fly to, without having to pay more. Less people will choose EK, but the demand will quickly be filled by other competitors. In the meanwhile, the B779 will land in DXB with less passengers to connect, so you might as well be ready to downsize the B77W flights to smaller aircraft as well.
At the end of the day, EK and Dubai will have a fleet of smaller aircraft, less traffic, still the same overhead costs and structure if not higher if they need to increase airframe count, yields at the mercy of competitors, less airport revenue, less visitors to Dubai, etc...

BA can't open up more slots by increasing the size of their narrowbodies. BA runs multiple daily short haul banks that connect with mutliple daily long haul banks.
So in fact, an increase in the short hual fleet average size would have to be followed by a proportional growth in the long haul fleet average size.

Direct flights have higher yields per occupied seat, but are not always more profitable.
Many airlines make the mistake of asking too high fares for O&D, so that they chase away a big portion of the actual O&D onto connecting options, and end up having to fill their own flights with connecting passengers, at lower yields and higher cost. Point to point high yields only works if you are reasonably priced against other options. For instance, ask a 50-100% premium over 1-stop fares, a common practice, and you are going to have to fill your "point to point" flight with low yield connecting pax. Not so point-to-point anymore is it?
 
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Q

Sun Sep 08, 2019 1:10 am

Waterbomber2 wrote:
lightsaber wrote:
jagraham wrote:


EKs model requires some number of A380s. They fly 6 per day to LHR and it is doubtful that they will get any more slots. Smaller planes mean fewer passengers, and to places like LHR they need a lot of seats to satisfy the demand to fly to LHR across their network.

As for the others destinations, it may be that EK wants to have fewer cheap seats. It will be interesting to see how such a strategy works versus P2P flying over the years. But most P2P flying in competition with EK destination to destination flying is ULH flying and it would seem that it will remain cheaper to stop in DXB. But if the strategy works, EK flies a lot of their legs on A350s / A339s / (maybe 78Js), and saves a lot of fuel. If.

Too much of that demand isn't profitable. EK must downsize as is noted. Going from 115 to 90 to 100 A380s isn't a big deal.

The competition isn't just ULH. It is going to be widebodies from other London airports bypassing Dubai. The ULH is the most dramatic and highest premium bypass.

Direct flights always have higher yield. The A321xlr at Indigo will drain some EK yield. NEOs and MAXs flying direct will bypass EK.

The new planes cost less per passenger and since they are smaller, significantly less per flight. New routes will open up.

As you note, EK needs fewer cheap seats. With only 2% profit, far fewer. Even to London. But the bigger issue is pricey seats desire to bypass the hub. BA with their huge number of LHR slots can up gauge narrowbody flights to free up frequencies for A350s or 787-10s to bypass EK.

Most destinations are not slot limited, so as cheaper to fly aircraft bypass hubs, yield drops.

EK must cut capacity to raise yield. Hotel yields in Dubai dropped 10% YoY, so the city looks to be losing premium traffic.

https://gulfnews.com/amp/business/touri ... 1.66064412

EK must adapt.

Lightsaber


I must correct you on many regards.

Superhubs can't cut capacity to increase yields, because whatever capacity they cut will result in demand flowing through other superhubs. If EK wants to downsize, there will be 30 competitors waiting to take-over that market share, even if it's at the bottom of the market.
EK replaces A380's by B779's in LHR or even AMS? No problem, people in London or Amsterdam still have plenty of options to fly to where they need to fly to, without having to pay more. Less people will choose EK, but the demand will quickly be filled by other competitors. In the meanwhile, the B779 will land in DXB with less passengers to connect, so you might as well be ready to downsize the B77W flights to smaller aircraft as well.
At the end of the day, EK and Dubai will have a fleet of smaller aircraft, less traffic, still the same overhead costs and structure if not higher if they need to increase airframe count, yields at the mercy of competitors, less airport revenue, less visitors to Dubai, etc...

BA can't open up more slots by increasing the size of their narrowbodies. BA runs multiple daily short haul banks that connect with mutliple daily long haul banks.
So in fact, an increase in the short hual fleet average size would have to be followed by a proportional growth in the long haul fleet average size.

Direct flights have higher yields per occupied seat, but are not always more profitable.
Many airlines make the mistake of asking too high fares for O&D, so that they chase away a big portion of the actual O&D onto connecting options, and end up having to fill their own flights with connecting passengers, at lower yields and higher cost. Point to point high yields only works if you are reasonably priced against other options. For instance, ask a 50-100% premium over 1-stop fares, a common practice, and you are going to have to fill your "point to point" flight with low yield connecting pax. Not so point-to-point anymore is it?



P2P is adjusting. Before the A350 and the 787, there was a lot of expense to fly a point to point flight. The new planes reduce that expense by about 20% relative to a 77L, and even more relative to a 744. So more P2P flights become viable.

In addition, it's the only way airlines like Qantas survive. Unless giving in to the ME3 is the business plan, long haul P2P flying is necessary. The new planes also make life better for airlines like SQ.

But back to the topic. Despite what Sir Tim says, I believe he just can't bear to let a good crisis (the engine problems) go to waste. But yes, once the engine problems are solved, more expat flight crews will be needed . . .
 
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Re: Reuters: Tim Clark: won't take new planes unless engines are truly ready

Sun Sep 08, 2019 2:26 am

Waterbomber2 wrote:
I must correct you on many regards.
Superhubs can't cut capacity to increase yields, because whatever capacity they cut will result in demand flowing through other superhubs. If EK wants to downsize, there will be 30 competitors waiting to take-over that market share, even if it's at the bottom of the market.
EK replaces A380's by B779's in LHR or even AMS? No problem, people in London or Amsterdam still have plenty of options to fly to where they need to fly to, without having to pay more. Less people will choose EK, but the demand will quickly be filled by other competitors. In the meanwhile, the B779 will land in DXB with less passengers to connect, so you might as well be ready to downsize the B77W flights to smaller aircraft as well.
At the end of the day, EK and Dubai will have a fleet of smaller aircraft, less traffic, still the same overhead costs and structure if not higher if they need to increase airframe count, yields at the mercy of competitors, less airport revenue, less visitors to Dubai, etc...

BA can't open up more slots by increasing the size of their narrowbodies. BA runs multiple daily short haul banks that connect with mutliple daily long haul banks.
So in fact, an increase in the short hual fleet average size would have to be followed by a proportional growth in the long haul fleet average size.

Direct flights have higher yields per occupied seat, but are not always more profitable.
Many airlines make the mistake of asking too high fares for O&D, so that they chase away a big portion of the actual O&D onto connecting options, and end up having to fill their own flights with connecting passengers, at lower yields and higher cost. Point to point high yields only works if you are reasonably priced against other options. For instance, ask a 50-100% premium over 1-stop fares, a common practice, and you are going to have to fill your "point to point" flight with low yield connecting pax. Not so point-to-point anymore is it?

Agree totally with you.
I'll add two things I have said in the DWC thread :
1) Traffic flows obey dynamic equations ( solution based on second derivative ), anyone using linear logic is off.
2) 2% Profit is immaterial to EK. Aircraft purchases, investment & royalties are higher up in accountancy. As an SOE (state owned enterprise ), EK could well post 0 profit & augment their investments. And all run commercially & with certified auditing.
Not unlike some japanese & chinese heavy weights.
 
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Re: Reuters: Tim Clark: won't take new planes unless engines are truly ready

Sun Sep 08, 2019 2:48 am

Waterbomber2 wrote:
lightsaber wrote:
jagraham wrote:


EKs model requires some number of A380s. They fly 6 per day to LHR and it is doubtful that they will get any more slots. Smaller planes mean fewer passengers, and to places like LHR they need a lot of seats to satisfy the demand to fly to LHR across their network.

As for the others destinations, it may be that EK wants to have fewer cheap seats. It will be interesting to see how such a strategy works versus P2P flying over the years. But most P2P flying in competition with EK destination to destination flying is ULH flying and it would seem that it will remain cheaper to stop in DXB. But if the strategy works, EK flies a lot of their legs on A350s / A339s / (maybe 78Js), and saves a lot of fuel. If.

Too much of that demand isn't profitable. EK must downsize as is noted. Going from 115 to 90 to 100 A380s isn't a big deal.

The competition isn't just ULH. It is going to be widebodies from other London airports bypassing Dubai. The ULH is the most dramatic and highest premium bypass.

Direct flights always have higher yield. The A321xlr at Indigo will drain some EK yield. NEOs and MAXs flying direct will bypass EK.

The new planes cost less per passenger and since they are smaller, significantly less per flight. New routes will open up.

As you note, EK needs fewer cheap seats. With only 2% profit, far fewer. Even to London. But the bigger issue is pricey seats desire to bypass the hub. BA with their huge number of LHR slots can up gauge narrowbody flights to free up frequencies for A350s or 787-10s to bypass EK.

Most destinations are not slot limited, so as cheaper to fly aircraft bypass hubs, yield drops.

EK must cut capacity to raise yield. Hotel yields in Dubai dropped 10% YoY, so the city looks to be losing premium traffic.

https://gulfnews.com/amp/business/touri ... 1.66064412

EK must adapt.

Lightsaber


I must correct you on many regards.

Superhubs can't cut capacity to increase yields, because whatever capacity they cut will result in demand flowing through other superhubs. If EK wants to downsize, there will be 30 competitors waiting to take-over that market share, even if it's at the bottom of the market.
EK replaces A380's by B779's in LHR or even AMS? No problem, people in London or Amsterdam still have plenty of options to fly to where they need to fly to, without having to pay more. Less people will choose EK, but the demand will quickly be filled by other competitors. In the meanwhile, the B779 will land in DXB with less passengers to connect, so you might as well be ready to downsize the B77W flights to smaller aircraft as well.
At the end of the day, EK and Dubai will have a fleet of smaller aircraft, less traffic, still the same overhead costs and structure if not higher if they need to increase airframe count, yields at the mercy of competitors, less airport revenue, less visitors to Dubai, etc...

BA can't open up more slots by increasing the size of their narrowbodies. BA runs multiple daily short haul banks that connect with mutliple daily long haul banks.
So in fact, an increase in the short hual fleet average size would have to be followed by a proportional growth in the long haul fleet average size.

Direct flights have higher yields per occupied seat, but are not always more profitable.
Many airlines make the mistake of asking too high fares for O&D, so that they chase away a big portion of the actual O&D onto connecting options, and end up having to fill their own flights with connecting passengers, at lower yields and higher cost. Point to point high yields only works if you are reasonably priced against other options. For instance, ask a 50-100% premium over 1-stop fares, a common practice, and you are going to have to fill your "point to point" flight with low yield connecting pax. Not so point-to-point anymore is it?

I'm afraid I have to disagree. If EK doesn't shrink to higher yield, they are done.

The natural trend if full hubs is reallocate slots for higher yield. EK is down gauging. Since the most profitable slots are full, that means fewer people.

Delta replaced mainline with RJs to boost yield at ATL, there is a precident.

BA routinely allocates slots for profit. If a widebody cannot make more profit than a narrowbody, obviously there is no business case.

EK cut capacity to rebuild a runway, so this fiscal year will be worse than the last. STC is on the right strategy.

Lightsaber
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Re: Reuters: Tim Clark: won't take new planes unless engines are truly ready

Sun Sep 08, 2019 3:24 am

Found a link showing EK has 0.9% profit. Not even one percent and due to the runway closeure this fiscal year will be worse.

https://www.forbes.com/sites/michaelgol ... lanes/amp/

Emirates’ load factor, or the percentage of seats filled with paying passengers, actually fell to 76.8% from 77.5% a year earlier. By comparison, the worldwide average load factor rose to 82.1% by 2019.

EK has too much capacity. STC is adapting. As already noted, later than it should have been.

Lightsaber
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Re: Reuters: Tim Clark: won't take new planes unless engines are truly ready

Sun Sep 08, 2019 3:49 am

lightsaber wrote:
There will, eventually, be a freight version if the 777x and that adds all the freight companies as there won't be any efficient competition. IMHO, they freighter is launched as soon as Boeing accepts the 748F line needs to be scheduled for shutdown.

I don't think the 777X freighter is as critical as some make out. If the 777-8 gets canned, Boeing has other options that in my opinion are actually better in the long run.

If Boeing had to have only two freighter aircraft in production to keep the largest spectrum of roles it would be a 787-8 freighter and the current 747-8F.

Your suggestion of the having the 777X freighter and 767F as the only two freighters and getting rid of the 747-8F is not as versatile. It could open the door for a huge quantity of A330 conversions.

A 787-8 freighter would have the advantages of both the 777F and 767F in the one aircraft and would capture the majority of sales. With no 777x freighter it would increase demand for the 747-8F allowing it to continue production for another 10 years.

The 787-8 freighter would burn the same fuel as the 767F while carrying 50% more payload.
 
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Re: Reuters: Tim Clark: won't take new planes unless engines are truly ready

Sun Sep 08, 2019 6:50 am

lightsaber wrote:
Found a link showing EK has 0.9% profit. Not even one percent and due to the runway closeure this fiscal year will be worse.

https://www.forbes.com/sites/michaelgol ... lanes/amp/

Emirates’ load factor, or the percentage of seats filled with paying passengers, actually fell to 76.8% from 77.5% a year earlier. By comparison, the worldwide average load factor rose to 82.1% by 2019.

EK has too much capacity. STC is adapting. As already noted, later than it should have been.

Lightsaber


Runway closure was during an off-peak season including Ramadan (which adds to reduced travel esp in the region). The timing of the runway repair may infact have been beneficial for fiscal 2020. However will wait to see the FH results in Nov'19.
 
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Re: Reuters: Tim Clark: won't take new planes unless engines are truly ready

Sun Sep 08, 2019 7:13 am

I don't think a freighter version in any form is the number one priority right now.

The 748F and 777F are still being produced and selling.
 
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Re: Reuters: Tim Clark: won't take new planes unless engines are truly ready

Sun Sep 08, 2019 8:09 am

RJMAZ wrote:
lightsaber wrote:
There will, eventually, be a freight version if the 777x and that adds all the freight companies as there won't be any efficient competition. IMHO, they freighter is launched as soon as Boeing accepts the 748F line needs to be scheduled for shutdown.

I don't think the 777X freighter is as critical as some make out. If the 777-8 gets canned, Boeing has other options that in my opinion are actually better in the long run.

If Boeing had to have only two freighter aircraft in production to keep the largest spectrum of roles it would be a 787-8 freighter and the current 747-8F.

Your suggestion of the having the 777X freighter and 767F as the only two freighters and getting rid of the 747-8F is not as versatile. It could open the door for a huge quantity of A330 conversions.

A 787-8 freighter would have the advantages of both the 777F and 767F in the one aircraft and would capture the majority of sales. With no 777x freighter it would increase demand for the 747-8F allowing it to continue production for another 10 years.

The 787-8 freighter would burn the same fuel as the 767F while carrying 50% more payload.


The 787F would have the same disadvantage mentioned for the A330F, to wide a wingspan compared to the 767F, taking to much space on the ramp.
 
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Re: Reuters: Tim Clark: won't take new planes unless engines are truly ready

Sun Sep 08, 2019 8:41 am

Article says STC is not concerned with the second hand market since the A380s are leased. Who is the lessor?
 
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Re: Reuters: Tim Clark: won't take new planes unless engines are truly ready

Sun Sep 08, 2019 10:29 am

In the end it is just a way of saying " we do not need more aircraft at the moment", but instead of saying this you say that no OEM can deliver planes matching your demand. Face saving is a big part of the ME culture and it looks much better to say " we can not take more planes as our demands are not met" than "we can not take more planes because we can not fill them".
 
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Re: Reuters: Tim Clark: won't take new planes unless engines are truly ready

Sun Sep 08, 2019 10:56 am

justloveplanes wrote:
Article says STC is not concerned with the second hand market since the A380s are leased. Who is the lessor?


Many of EK's early A380s are leased from Doric.

Doric's site mentions 17 380s for EK, not sure how up to date that figure is though.

https://transport.doric.com/fleet/
 
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Re: Reuters: Tim Clark: won't take new planes unless engines are truly ready

Sun Sep 08, 2019 11:00 am

seahawk wrote:
In the end it is just a way of saying " we do not need more aircraft at the moment", but instead of saying this you say that no OEM can deliver planes matching your demand. Face saving is a big part of the ME culture and it looks much better to say " we can not take more planes as our demands are not met" than "we can not take more planes because we can not fill them".

Other than the middle east cultural generalisation, I agree with the thrust of your argument.
 
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Re: Reuters: Tim Clark: won't take new planes unless engines are truly ready

Sun Sep 08, 2019 12:53 pm

EK7777 wrote:
justloveplanes wrote:
Article says STC is not concerned with the second hand market since the A380s are leased. Who is the lessor?


Many of EK's early A380s are leased from Doric.

Doric's site mentions 17 380s for EK, not sure how up to date that figure is though.

https://transport.doric.com/fleet/

If STC's statement about peaking at 115 then declining to 90-100 by 2025 holds true, then we'll see 15-25 EK A380s hitting the second hand market over the next six years or so.

It makes me wonder how many spare parts the active fleet will need.
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Re: Reuters: Tim Clark: won't take new planes unless engines are truly ready

Sun Sep 08, 2019 3:30 pm

majano wrote:
seahawk wrote:
In the end it is just a way of saying " we do not need more aircraft at the moment", but instead of saying this you say that no OEM can deliver planes matching your demand. Face saving is a big part of the ME culture and it looks much better to say " we can not take more planes as our demands are not met" than "we can not take more planes because we can not fill them".

Other than the middle east cultural generalisation, I agree with the thrust of your argument.

First, I agree with the general thrust of the comment but do not believe this is face saving. I believe it is contract negotiations to slow delivery and to acheive a lower price.

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Re: Reuters: Tim Clark: won't take new planes unless engines are truly ready

Sun Sep 08, 2019 3:42 pm

seahawk wrote:
In the end it is just a way of saying " we do not need more aircraft at the moment", but instead of saying this you say that no OEM can deliver planes matching your demand. Face saving is a big part of the ME culture and it looks much better to say " we can not take more planes as our demands are not met" than "we can not take more planes because we can not fill them".


Disagree with this because they do need aircraft at the moment. Specifically, they desperately need smaller aircraft. Clark knows this and early delivery is the reason he signed up for the A330neo, rather than ordering all A350s from Airbus.

The sooner he can retire his maintenance-hog early A380s and downgauge marginal A380 routes, the less cash he'll bleed.
 
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Re: Reuters: Tim Clark: won't take new planes unless engines are truly ready

Sun Sep 08, 2019 4:20 pm

seabosdca wrote:
seahawk wrote:
In the end it is just a way of saying " we do not need more aircraft at the moment", but instead of saying this you say that no OEM can deliver planes matching your demand. Face saving is a big part of the ME culture and it looks much better to say " we can not take more planes as our demands are not met" than "we can not take more planes because we can not fill them".


Disagree with this because they do need aircraft at the moment. Specifically, they desperately need smaller aircraft. Clark knows this and early delivery is the reason he signed up for the A330neo, rather than ordering all A350s from Airbus.

The sooner he can retire his maintenance-hog early A380s and downgauge marginal A380 routes, the less cash he'll bleed.


Yes, but ending lease contracts early and returning financed planes early, will give them different conditions for future acquisitions. And down gauging A380 routes is not going to help much, as long as he has that big 777W running. Without the feed from the A380 fleet the hub wave won´t have enough passengers to feed the 777W part of the wave. And remember they have still A380s coming in and a huge 777X order is waiting as well.
 
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Re: Reuters: Tim Clark: won't take new planes unless engines are truly ready

Mon Sep 09, 2019 11:36 am

seabosdca wrote:
seahawk wrote:
In the end it is just a way of saying " we do not need more aircraft at the moment", but instead of saying this you say that no OEM can deliver planes matching your demand. Face saving is a big part of the ME culture and it looks much better to say " we can not take more planes as our demands are not met" than "we can not take more planes because we can not fill them".


Disagree with this because they do need aircraft at the moment. Specifically, they desperately need smaller aircraft. Clark knows this and early delivery is the reason he signed up for the A330neo, rather than ordering all A350s from Airbus.

The sooner he can retire his maintenance-hog early A380s and downgauge marginal A380 routes, the less cash he'll bleed.


The 787-10 is also available.

This is not quite true about the A330neo's and A350's for EK.

They are the compensation of a contract that will not be honored for not being able to take delivery of A380's whose production must cease...
 
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Re: Reuters: Tim Clark: won't take new planes unless engines are truly ready

Mon Sep 09, 2019 11:47 am

Fare to say Emirates bought too many a380's and now the last tranch with Rolls engines, coupled with A380 canceled program means the airline have to stop to another air bus offering - and with Rolls engines.

has the emirates backed itself into a corner? Like yes. They do not want rolls to power all jets, they also want 78710 as they talk to the Etihad who operate the same with genX engine and sir Tim is happy.

But coming out of the airbus contract and rolls contract has tied the emirates' hands. Thats why the a33neo and A350 is no firmed.
 
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Re: Reuters: Tim Clark: won't take new planes unless engines are truly ready

Mon Sep 09, 2019 11:53 am

I find it interesting we spend so much energy debating which aircraft. EK will downsize. The prior quotes on the ANZ 787-10 order show Boeing and GE are willing to price cheaper than Airbus or RR. STC must get a better deal for EK as the airline is barely break even.

As people are discussing above, EK must downsize. It will be a mixture of A380s and 777s downsizing. The question is how quickly (I agree needs to be done desperately).

Both sides of the hub must be balanced. The really impacted destinations (LHR) will keep the A380 until 2030 or maybe longer (I believe the A380 just won't be profitable after the 777x and/or A350 receive a major fuel reduction PiP).

Loved the A380 here for decades. But without PiPs, airframes are retired early. The wing twist isn't retrifitable either. Where is an updated wing tip treatment? The one fuel reduction engine PiP was botched.


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Re: Reuters: Tim Clark: won't take new planes unless engines are truly ready

Mon Sep 09, 2019 11:56 am

In my opinion the best EK could do is get rid of the 777X order (completely) as well as the A330. Use the A350 as future flagship with low density and the 77W as higher density option. Buy a lot of 787s in all variants to use them to their strength from long thin routes (-8) to medium high volume routes in asia (-10). On top of that buy 300+ A321(xlr). Get off the whole "only WB aircraft stuff".

A fleet of A321(xlr)/A350 and 787/77W would be competitive from the ME. In the long run the A350 and or upgraded 787 can replace the 77W. The only way a hub in the ME with the current trend of bypassing hubs is to connect Asian/African cities to Dubai that do not have (or only sparse) service to Europe and the A321(xlr)/787 is the best option for this. Then fill the big aircrafts 787-10/A350/77W towards NA and Europe and also Australia and SA.
 
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Re: Reuters: Tim Clark: won't take new planes unless engines are truly ready

Mon Sep 09, 2019 1:13 pm

FluidFlow wrote:
In my opinion the best EK could do is get rid of the 777X order (completely) as well as the A330. Use the A350 as future flagship with low density and the 77W as higher density option. Buy a lot of 787s in all variants to use them to their strength from long thin routes (-8) to medium high volume routes in asia (-10). On top of that buy 300+ A321(xlr). Get off the whole "only WB aircraft stuff".

A fleet of A321(xlr)/A350 and 787/77W would be competitive from the ME. In the long run the A350 and or upgraded 787 can replace the 77W. The only way a hub in the ME with the current trend of bypassing hubs is to connect Asian/African cities to Dubai that do not have (or only sparse) service to Europe and the A321(xlr)/787 is the best option for this. Then fill the big aircrafts 787-10/A350/77W towards NA and Europe and also Australia and SA.


A321 XLR is probably a very bad long-term strategy for a hub that'll max out that distance. STC rightly prefers tailor-made frames for long-haul travel. The 797 is the vastly superior option for long+thin routes, and he's happy to be a launch customer.

The A350 NEO is a much more competitive frame than the 777X, not denying that, but Airbus is 4 years too late to make Emirates drop the 777X order. EK needs frames in hand NOW before the bottom falls out from under the A380 on a lot of their routes. Oman is stealing traffic, SQ is, and bypasses are becoming more common. Routes like DXB-AKL-BNE-DXB can't be sustained on an A380 for much longer. Once ANZ gets their GE-based 787s or get their RR ETOPS 330 back, they'll be running their own ferry service to London through DXB or SIN. Project Sunrise will steal a fair amount of traffic from MEL/SYD through DXB as well. That's only 4-10 daily flights affected, but that's only the beginning. ANA and JAL will also rise again when RR sorts out the Trent 1000. It's going to all come to a head in the next 5-10 years and Emirates needs down-gauged A380 substitutes NOW.
 
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Re: Reuters: Tim Clark: won't take new planes unless engines are truly ready

Mon Sep 09, 2019 1:15 pm

Checklist787 wrote:

The 787-10 is also available.

This is not quite true about the A330neo's and A350's for EK.

They are the compensation of a contract that will not be honored for not being able to take delivery of A380's whose production must cease...

Isn't the 787 order book basically full until 2026? The 789 is also available by the same token, and at least it can fly the same distance the 777-300ER can.
 
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Re: Reuters: Tim Clark: won't take new planes unless engines are truly ready

Mon Sep 09, 2019 1:16 pm

Checklist787 wrote:
This is not quite true about the A330neo's and A350's for EK.

They are the compensation of a contract that will not be honored for not being able to take delivery of A380's whose production must cease...


A380 production is ceasing because EK decided they no longer needed all those they had on order. You manage to make it sound as though Airbus is forcing these planes on EK. They’re not, it was EK’s decision to take A330s and A350s in lieu of the (still to be) cancelled A380s.
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Re: Reuters: Tim Clark: won't take new planes unless engines are truly ready

Mon Sep 09, 2019 1:18 pm

lightsaber wrote:
I find it interesting we spend so much energy debating which aircraft. EK will downsize. The prior quotes on the ANZ 787-10 order show Boeing and GE are willing to price cheaper than Airbus or RR. STC must get a better deal for EK as the airline is barely break even.

As people are discussing above, EK must downsize. It will be a mixture of A380s and 777s downsizing. The question is how quickly (I agree needs to be done desperately).

Both sides of the hub must be balanced. The really impacted destinations (LHR) will keep the A380 until 2030 or maybe longer (I believe the A380 just won't be profitable after the 777x and/or A350 receive a major fuel reduction PiP).

Loved the A380 here for decades. But without PiPs, airframes are retired early. The wing twist isn't retrifitable either. Where is an updated wing tip treatment? The one fuel reduction engine PiP was botched.

Lightsaber


Which aircraft is easy. There is only one tried and tested and affordable option - which is the 787 with GE engines. The challenge is to get out of the Airbus contracts without paying too much money or better paying none.
 
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Re: Reuters: Tim Clark: won't take new planes unless engines are truly ready

Mon Sep 09, 2019 1:37 pm

seahawk wrote:

Yes, but ending lease contracts early and returning financed planes early, will give them different conditions for future acquisitions.


I want to focus on the leasing part. It is always expensive to return early. EK is a blue Chip Leasing customer. One of the best customers in the business in terms of ensuring they meet contract. To my knowledge, only SQ is a better customer.


What this is going to ensure is the leasing company minimizes their exposure to any one airline. it is going to ensure the leasing companies avoid or really changed the terms on an oddball air frames. Emirates is looking to buy the most liquid aircraft on the market except for the 777X.

one negative consequence as it could mean Emirates has to buy the most popular engine for each frame. for example of Rolls-Royce powered 757 as much easier resale than a Pratt. shrinks or the ultra long-haul aircraft are going to be much harder to finance.


EK will thrive, they will just have to buy more A359, 787-10 and other popular aircraft. Cest la vie. This hurts tepid selling aircraft though such as the A339. I wonder if financing the A339 is behind the rant.

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Re: Reuters: Tim Clark: won't take new planes unless engines are truly ready

Mon Sep 09, 2019 2:19 pm

Just a reminder to keep your posts on topic and keep political comments out of the discussion
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Re: Reuters: Tim Clark: won't take new planes unless engines are truly ready

Mon Sep 09, 2019 2:22 pm

lightsaber wrote:
seahawk wrote:

Yes, but ending lease contracts early and returning financed planes early, will give them different conditions for future acquisitions.


I want to focus on the leasing part. It is always expensive to return early. EK is a blue Chip Leasing customer. One of the best customers in the business in terms of ensuring they meet contract. To my knowledge, only SQ is a better customer.


What this is going to ensure is the leasing company minimizes their exposure to any one airline. it is going to ensure the leasing companies avoid or really changed the terms on an oddball air frames. Emirates is looking to buy the most liquid aircraft on the market except for the 777X.

one negative consequence as it could mean Emirates has to buy the most popular engine for each frame. for example of Rolls-Royce powered 757 as much easier resale than a Pratt. shrinks or the ultra long-haul aircraft are going to be much harder to finance.


EK will thrive, they will just have to buy more A359, 787-10 and other popular aircraft. Cest la vie. This hurts tepid selling aircraft though such as the A339. I wonder if financing the A339 is behind the rant.

Lightsaber



Is EK really looking at early lease returns? Or are they going to tough it out (they aren't losing money yet)? They have to have their MBAs and leasing experts looking at the long term impacts of early lease returns . . . and if there is a significant long term consequence, I would expect EK to tough it out and buy those A339s (cheapest to acquire, cheapest to operate up to 4 hours, very low penalty vs A359 for 4 to 6 or 7 hours, and oh the availability . . and they have Rollers too)
 
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Re: Reuters: Tim Clark: won't take new planes unless engines are truly ready

Mon Sep 09, 2019 3:47 pm

RJMAZ wrote:
I have no idea why Emirates does not have a huge fleet of GE powered 787-10's.

Looking at Emirates route map 90% of the routes are within the 787-10's brochure range. Even better more than 50% of the routes are within the 787-10's range with maximum payload. So payload range is clearly not an issue.

We would all agree the 787-10 is the most efficient widebody when it comes to medium haul.


ultimately it's probably where he's going to end up, whether he wants to be there or not. He has shown next to zero interest in 350 series products. That leaves 78x and 77x. Maybe he goes the biggest plane route and does a 779 order...but operating far less efficiently over the shorter routes than 78x would. Seems like maybe he's denigrating this plane based upon his "10 hour" comment with MZFW. They already push 77Ws out to no-cargo ranges on various routes, so I haven't understood his aversion to 78x. Maybe hot/high performance is bad...dunno.

Part of it *was* ego...as this massive 380 operator, he had cachet- look at the planes MY airline flies, and scoff at the handful of 72Es an operator like UA had. Being a 78x operator; his airline is now the same as everyone else's. The market won't let him fly superjumbos anymore, so he's left with I suppose the 779. I expect he'll capitulate on 78x at some point and that plus 779s and if built a handful of 778s will be their long haul fleet in 10 years.
 
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Re: Reuters: Tim Clark: won't take new planes unless engines are truly ready

Mon Sep 09, 2019 3:53 pm

While he is at it, better inspect the carpets for perfection as well #learnfromyourneighbours
 
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Re: Reuters: Tim Clark: won't take new planes unless engines are truly ready

Mon Sep 09, 2019 4:08 pm

seabosdca wrote:
h1fl1er wrote:
He's not looking for an engine; he wants a plane. The 350 is not that plane and neither is any other currently in-production frame.


That's very unclear. What he doesn't want is to sign a contract at current (1) pricing and (2) levels of risk. He is trying to get OEMs to either sell him cheaper equipment, retire some of the risk around things like engine-related groundings, or both.

As far as what he actually wants in the end, my guess is a combination of 787s, A350s, and 777-9s, all at rock-bottom prices. I'll put my marker in the sand: 30x 787-9, 50x 787-10, 60x A350-1000 (with half being HGW variants for ULH), 60x 777-9.


Per airbus, there won't be rock bottom anything going forward. They're focused on profit per frame, not market share. Additionally, I haven't seen anything out of EK that suggests that they have any real interest in the A350 and certainly not the J. Even their 380 swap LOI they took zero Js. I don't know why they would take that frame alongside the others you mentioned...doesn't seem plausible. I think 30 778s and 90 779s are more realistic. He may never really take 787s en masse...hasn't yet.
 
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Re: Reuters: Tim Clark: won't take new planes unless engines are truly ready

Mon Sep 09, 2019 4:24 pm

h1fl1er wrote:
The market won't let him fly superjumbos anymore, so he's left with I suppose the 779. I expect he'll capitulate on 78x at some point and that plus 779s and if built a handful of 778s will be their long haul fleet in 10 years.

The market will let him fly super jumbos, just not the 138 or so he had on order.

There will be a draw down to profitability, but the issue is he still does have contracts signed for a large number of Whales with leases running many years out in to the future.

https://www.fool.com/investing/2019/05/ ... e-slo.aspx says 2019 load factor fell to 76.8% from 77.5% a year earlier and 2019 airline profit was 0.9%.

It suggests that a lot of that load factor is being flown at break even or below.

Obviously down sizing to smaller and more efficient aircraft can make a huge difference, but EK over committed during their growth phase and are stuck with planes and engines they don't want.

It will be a big problem for them to sort out.
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Re: Reuters: Tim Clark: won't take new planes unless engines are truly ready

Mon Sep 09, 2019 4:28 pm

h1fl1er wrote:
Per airbus, there won't be rock bottom anything going forward. They're focused on profit per frame, not market share.
Well that's contrary to where airlines are going with fuel prices on the rise so...good luck, especially in the wake of Brexit.
Additionally, I haven't seen anything out of EK that suggests that they have any real interest in the A350 and certainly not the J. Even their 380 swap LOI they took zero Js. I don't know why they would take that frame alongside the others you mentioned...doesn't seem plausible. I think 30 778s and 90 779s are more realistic. He may never really take 787s en masse...hasn't yet.

I think he's waiting for the 787 NG honestly. The 787-10 is already an amazing trunk route flier for the 12-hour and below segment (Africa, U.S. east coast, Singapore, Kuala Lumpur, Brisbane/Auckland via SIN). Since there really aren't delivery slots available en masse until post-2025, STC may just wait out Boeing and GE going it alone on the Dreamliner NG with the GE9X.

The A359 has the same capacity as the 787-10 but is built with 18h range, so loads of wasted airframe weight for those closer routes. It's too niche. The A35K has the benefit of being a drop-in 77W capacity replacement, so older 77Ws on packed routes get the ax. Those 77Ws can transfer to underperforming A380 routes, maybe open new routes, be resold, or retire.

The other benefit with the A350 is the NEO will start flying 2026/27 with the Trent Ultrafan, so getting the training on the K now might make the A359 NEO or potentially A358 NEO much more economical to Emirates than their current equivalents. I don't see the A330 NEO being with Emirates long-term. It's a stop-gap.
 
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Re: Reuters: Tim Clark: won't take new planes unless engines are truly ready

Mon Sep 09, 2019 4:38 pm

Revelation wrote:
The market will let him fly super jumbos, just not the 138 or so he had on order.

There will be a draw down to profitability, but the issue is he still does have contracts signed for a large number of Whales with leases running many years out in to the future.

https://www.fool.com/investing/2019/05/ ... e-slo.aspx says 2019 load factor fell to 76.8% from 77.5% a year earlier and 2019 airline profit was 0.9%.

It suggests that a lot of that load factor is being flown at break even or below.

Obviously down sizing to smaller and more efficient aircraft can make a huge difference, but EK over committed during their growth phase and are stuck with planes and engines they don't want.

It will be a big problem for them to sort out.


I agree and I see the situation as more dire than that...anyone majorly involved with the 380 program is going to get hit hard. It rightfully should have sunk Airbus and it may sink EK.

Other airlines can operate similar routes far more profitably per passenger than EK. Their margins tell you what you need to know...the notion of filling big planes, lots of passengers...it doesn't matter if the frame can't operate at a profit. It's all irrelevant in that case. This is precisely why the US3 don't fly giant aircraft anymore. Everything is about margins.

As 789s proliferate, they are eviscerating other airframes on similar routes. An imaginary airline operating from a ME airport could fly 2 789s on the same route as EK flies a 380 and charge less or make higher profit or both. A 78x airline might even beat EK by a bigger margin depending on the mission length.

EK is in for some trouble is my estimation. They need to get rid of these planes as fast as is possible and accept where the industry went in the past 10 years. If they firm their Airbus replacement LOI, they will make the most money, profit, from their 330Neos if you consider all factors together inc purchase price.

EK grossly miscalculated in so many ways, now they will pay the price for it. It is not much of an exaggeration to say STC bet his airline on the A380.

The other benefit with the A350 is the NEO will start flying 2026/27 with the Trent Ultrafan, so getting the training on the K now might make the A359 NEO or potentially A358 NEO much more economical to Emirates than their current equivalents. I don't see the A330 NEO being with Emirates long-term. It's a stop-gap.


bringing as-yet undeveloped engines and planes into the mix isn't that useful. If the 350 with an ultrafan, why not the 78x with one? There is no 358Neo and won't be. A 359Neo is a compelling plane, no doubt, but if it still costs $20M more than the 789NG, it won't sell either.

the 339 is of course a stopgap for EK but it will ironically earn them the best profit margin of the frames they have on order (assuming they take no 787s)
 
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Re: Reuters: Tim Clark: won't take new planes unless engines are truly ready

Mon Sep 09, 2019 4:46 pm

Revelation wrote:
h1fl1er wrote:
The market won't let him fly superjumbos anymore, so he's left with I suppose the 779. I expect he'll capitulate on 78x at some point and that plus 779s and if built a handful of 778s will be their long haul fleet in 10 years.

The market will let him fly super jumbos, just not the 138 or so he had on order.

There will be a draw down to profitability, but the issue is he still does have contracts signed for a large number of Whales with leases running many years out in to the future.

https://www.fool.com/investing/2019/05/ ... e-slo.aspx says 2019 load factor fell to 76.8% from 77.5% a year earlier and 2019 airline profit was 0.9%.

It suggests that a lot of that load factor is being flown at break even or below.

Obviously down sizing to smaller and more efficient aircraft can make a huge difference, but EK over committed during their growth phase and are stuck with planes and engines they don't want.

It will be a big problem for them to sort out.


Yet the A380s are only the tip of the iceberg. The huge 777 fleet would be equally oversized without the large number of A380s.
 
Scotron12
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Re: Reuters: Tim Clark: won't take new planes unless engines are truly ready

Mon Sep 09, 2019 4:46 pm

This is all rumor...totally! Where has STC said he doesn't want the A339/A350?

And that all he wants is Boeing?
 
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Re: Reuters: Tim Clark: won't take new planes unless engines are truly ready

Mon Sep 09, 2019 4:55 pm

seahawk wrote:
Yet the A380s are only the tip of the iceberg. The huge 777 fleet would be equally oversized without the large number of A380s.

Might be true if all are full, but this isn't the case.

A380s are 1/3rd bigger than 777W and worse at cargo.

Getting rid of A380s lets you retain frequency as you add 777Xs.

Adding A350/789 is an even better idea, but hands may be tied.

We saw this in the post-9/11 downsizing: big inefficient 747s were sent to the breakers, A330/767/777 were kept, most flying till this very day.
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Re: Reuters: Tim Clark: won't take new planes unless engines are truly ready

Mon Sep 09, 2019 4:57 pm

Scottron12:

We know he is pushing back on RR deliveries per the quotes. It happens to be all Airbus short term

We know EK has not signed the 779 delivery contract due to uncertainty. So it is also impacted on GE engines and spectacular descriptions of a cargo door opening on a proof test.

I believe EK is in cash preserving mode and negotiating in the media for better deals such as the aircraft/engine deal ANZ received that links were provided earlier (RR complained they wouldn't meet GE's offer).

So tons of speculation. But what we know is EK asked more of RR than they were willing to put in writing.

The flowing contracts are unsigned for final delivery:. A339, A359, and 779. Note:. It is too early to discuss/sign for 778.

I interpret prior STC comments that EK is trying to slow/stop A380 deliveries by any means possible. Due to T900 issues (sand errosion, fuel burn miss), it is probable he has some legal ground.

Until the 779 issues are fixed, EK is only receive Airbus aircraft powered by RR. Hence why so much discussion on those two.

I believe both the A380 and 77W fleet need to be reduced.l and I don't mean all with 779s either.

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Re: Reuters: Tim Clark: won't take new planes unless engines are truly ready

Mon Sep 09, 2019 5:00 pm

h1fl1er wrote:
EK grossly miscalculated in so many ways, now they will pay the price for it. It is not much of an exaggeration to say STC bet his airline on the A380.

Meh, I think he estimated correctly up front, but should have seen the winds changing and knocked 40 A380s off his order a number of years ago so he could be pivoting right now.

The other benefit with the A350 is the NEO will start flying 2026/27 with the Trent Ultrafan, so getting the training on the K now might make the A359 NEO or potentially A358 NEO much more economical to Emirates than their current equivalents. I don't see the A330 NEO being with Emirates long-term. It's a stop-gap.


bringing as-yet undeveloped engines and planes into the mix isn't that useful. If the 350 with an ultrafan, why not the 78x with one? There is no 358Neo and won't be. A 359Neo is a compelling plane, no doubt, but if it still costs $20M more than the 789NG, it won't sell either.

787 operators won't trust RR with the NG, no way. GE will get exclusive rights to it with a GE9x derivative or end up in a 2-way race with PW. So, the Ultrafan goes to the A350 NEO exclusively to start. The A359 NEO by a bit of napkin math has the range of the 778 (10% range uplift at the same fuel capacity is not unreasonable going by the A330 NEO) while having far better flight economics and passenger comfort than the 778.

Eh... I don't really see an A330 NEO 2. The future is composite frames, and the A330-800 is basically dead in the water because it just fails miserably against the 788/9. The A358 NEO has economics the original didn't, so given the cockpit commonality, it may not be what airlines "want", but what they really don't want is a bitter pill AND having to retrain pilots for a Boeing frame.

The 339 is of course a stopgap for EK but it will ironically earn them the best profit margin of the frames they have on order (assuming they take no 787s)

How does it beat the A350 on profit margin?
 
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Re: Reuters: Tim Clark: won't take new planes unless engines are truly ready

Mon Sep 09, 2019 5:21 pm

lightsaber wrote:
Scottron12:

We know he is pushing back on RR deliveries per the quotes. It happens to be all Airbus short term

We know EK has not signed the 779 delivery contract due to uncertainty. So it is also impacted on GE engines and spectacular descriptions of a cargo door opening on a proof test.

I believe EK is in cash preserving mode and negotiating in the media for better deals such as the aircraft/engine deal ANZ received that links were provided earlier (RR complained they wouldn't meet GE's offer).

So tons of speculation. But what we know is EK asked more of RR than they were willing to put in writing.

The flowing contracts are unsigned for final delivery:. A339, A359, and 779. Note:. It is too early to discuss/sign for 778.

I interpret prior STC comments that EK is trying to slow/stop A380 deliveries by any means possible. Due to T900 issues (sand errosion, fuel burn miss), it is probable he has some legal ground.

Until the 779 issues are fixed, EK is only receive Airbus aircraft powered by RR. Hence why so much discussion on those two.

I believe both the A380 and 77W fleet need to be reduced.l and I don't mean all with 779s either.

Lightsaber



I agree with you, if I haven't got your point wrong, that EK is using all they have at their disposal to try and readjust their order book to change their strategy going forward. I will once again take issue with your assertion that it is only Airbus in the firing line with his quotes. Yes the article in the OP certainly focuses on Airbus but if you look around you can see Boeing and GE is in the spotlight as well.

With 115 777-9s and 35 -8s on order since November 2013 the delay is something Clark is not happy with: “First flight should have been by October last year and in June we were told it won’t be flying until Q1 next year. That, of course, affects deliveries to us. We were due to receive the first aircraft in June next year, we had 6 or 9 coming on delivery after that but all is now set back. Let’s assume that Boeing has a 13-16 months certification-program, that means we can’t be sure when we will get these airplanes. We are keen to get them, but they should be reliable.”


And then this,

“There is no stability in the Rolls-Royce program at the moment as we see it. Until such time we have definitive guarantees that if we power our aircraft with their engines that will be fit-for-purpose from day one without any restrictions, we are not prepared to make those commitments at this stage”, says Clark. “I am a little bit irritated that over the years we as an airline and I think the industry has been subjected to the requirements of engine manufacturers and take whatever consequences when they don’t work. We are not in a business where aircraft don’t function properly. I need a 99.5 percent dispatch reliability to make it work”.


So it is clear he is focusing on RR and it looks like he wants to use this as a way to get leverage, but his position isn't consistent at all. He is very down on the RR engines but he was supposed to get his first 779 in June. He also wants a 99.5% reliability, I doubt he will get it on the 777X so again if we are consistent and take him at his word on the Airbus and RR criticisms, on the 777X we can assume that this means that he will delay deliveries to 2024 or 2025, when they reach 99.5% dispatch reliability. Seeing that the 787 only got to 99.4% in January 2018, good luck to him getting any new aircraft with new engines.

So what position can we take on this? I don't know what his plans are with these statements, whether to get out of the Airbus contract and RR contract or to downsize, but we can acknowledge that there is a inconsistency in his statements that will make him a hypocrite either way.

Quotes from this article, Sir Tim Clark: I only take delivery of reliable aircraft and engines (update)
 
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Re: Reuters: Tim Clark: won't take new planes unless engines are truly ready

Mon Sep 09, 2019 5:23 pm

h1fl1er wrote:
Per airbus, there won't be rock bottom anything going forward. They're focused on profit per frame, not market share. Additionally, I haven't seen anything out of EK that suggests that they have any real interest in the A350 and certainly not the J. Even their 380 swap LOI they took zero Js. I don't know why they would take that frame alongside the others you mentioned...doesn't seem plausible. I think 30 778s and 90 779s are more realistic. He may never really take 787s en masse...hasn't yet.


I think the widely rumored high-gross-weight A350-1000 would be clearly superior to the 778 on the missions he was expecting to use the 778 to fly.

As for his previous lack of interest in the normal-weight A350-1000: that was when he was still in gangbusters growth mode, and was expecting to use the A350-1000 as his smallest aircraft, on mostly regional service, as a stepping stone to 777-9s and A380s. With that vision, he got upset when Airbus made the -1000 heavier. Now that he is in shrink mode instead, the role of the A350-1000 would be as a 77W replacement, where he doesn't need the greater capacity of the 777-9. Without the A350-1000, his alternatives are to grow capacity in the face of low load factors (777-9) or to shrink dramatically (787, A350-900).

I think both A350 variants have a role to play, but Airbus is very reluctant to discount the A350 heavily thus far, and Tim is looking hard for discounts.

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