Moderators: jsumali2, richierich, ua900, PanAm_DC10, hOMSaR

 
oldJoe
Posts: 400
Joined: Fri Jan 10, 2020 11:04 pm

Re: The case for more aircraft production cuts/playing chicken

Tue Dec 15, 2020 5:46 pm

morrisond wrote:
lightsaber wrote:
Leeham has a new article on estimated deliveries for Boeing and Airbus (includes A220):

https://leehamnews.com/2020/12/15/hotr- ... y-in-2025/

Fairly robust narrowbody recovery, except for A220 ramp... isn't much of a ramp with the ratio of A320NEO to MAX quite plausible.

The article goes into the chargeoffs for widebodies. That is a brutal acceptance of reality that hasn't yet happened.

Lightsaber


It forecasts Boeing delivering more units than Airbus the next 4 years and significantly more by value due to its lead in Widebodies. Interesting.


I take this article with a grain of salt. Wich accuracy can I expect when the actual real numbers for this year are not correct.
An article from today wth a Bernstein Research forecast from yesterday tells us : A220 31 dliveries where as end of November already 32 deliveries took place !
A380 deliveris in 2020 and 2021 total 3 ! Where are the other six frames left ? Boeing 747 deliveries 2020 3. At end of November already 4 delivered.
And so on ... They better cheked the delivery thread here on a-net !
When they can`t make a forecast for only one month what we expect for 5 years ?
 
StTim
Posts: 3800
Joined: Thu Aug 08, 2013 7:39 am

Re: The case for more aircraft production cuts/playing chicken

Tue Dec 15, 2020 5:51 pm

lightsaber wrote:
StTim wrote:
Seems quite bullish about the 777X for what I see as a niche product. 50 frames in 2025 yet only 86 for the much more versatile 787. Doesn't feel right to me.

I believe this is based on a freighter being offered. With that assumption, plausible. I also have seen data on 779 efficiency. While I haven't seen overall costs, I believe it will be the lowest cost way to transit passengers for flights over 3000nm.

Lightsaber

As ever lowest cost depends very much on the load factors.
 
User avatar
lightsaber
Moderator
Topic Author
Posts: 21175
Joined: Wed Jan 19, 2005 10:55 pm

Re: The case for more aircraft production cuts/playing chicken

Tue Dec 15, 2020 6:37 pm

Forecasts of any value take months to develop, so will lag. If more A220 deliveries happen in 2020, it probably means less in a future year. I always allow for some peanut buttering of deliveries.

I personally think there will be more A220 deliveries, but that could be my hope. In particular if the rumored range increase happens. I see Breeze, IAG, JetBlue, and Korean Air taking advantage of thin long with the type.

That analysis is more optimistic overall than I am... which is generally how the market performs. (We engineers should be conservative.)

I have been a c-series/A220 cheerleader forever; the concept is that good. But since I have always been too enthusiastic on the type, I will accept there is a good chance of a slower ramp up. Actually, that whole size category (A220 plus E2-190/195) has done far worse than my expectations. :cry2: May I be shown to be pessimistic in the next few years on both!

StTim wrote:
lightsaber wrote:
StTim wrote:
Seems quite bullish about the 777X for what I see as a niche product. 50 frames in 2025 yet only 86 for the much more versatile 787. Doesn't feel right to me.

I believe this is based on a freighter being offered. With that assumption, plausible. I also have seen data on 779 efficiency. While I haven't seen overall costs, I believe it will be the lowest cost way to transit passengers for flights over 3000nm.

Lightsaber

As ever lowest cost depends very much on the load factors.

Of course. Some of the 777x initial deliveries will only happen due to contract enforcement, at least in my opinion. The market will either recover ir stall at some new lower level. Either way, carrying passengers cheaply is a plus. If cheap enough for the size, then they sell. There is always the caviat that the extra seats on larger aircraft have lower yield (either discounting to stimulate demand or let some fly empty, so called "abuse" of larger aircraft).

By now we have interacted enough that you probably realized I favor P2P heavily. However, what I saw on the GE9x convinced me it is a full generation ahead of every other widebody engine. That means low fuel burn, but also "teething issues." I think the 777x will sell well within its lifetime.

Obviously, we must first dig out if the hole the debt crisis we were going into Covid19 or not (made worse, far worse in my opinion by money printing and the misalocation of resources that causes/enables) and now the global Covid19 recession.

Getting through 2021 us the challenge, then back to growth. It gets off topic to question how much bad policies might slow growth. But with growth, eventually, comes demand. We should debate when that demand happens.

Lightsaber
3 months without TV. The best decision of my life.
 
Opus99
Posts: 1514
Joined: Thu May 30, 2019 10:51 pm

Re: The case for more aircraft production cuts/playing chicken

Tue Dec 15, 2020 6:46 pm

lightsaber wrote:
Forecasts of any value take months to develop, so will lag. If more A220 deliveries happen in 2020, it probably means less in a future year. I always allow for some peanut buttering of deliveries.

I personally think there will be more A220 deliveries, but that could be my hope. In particular if the rumored range increase happens. I see Breeze, IAG, JetBlue, and Korean Air taking advantage of thin long with the type.

That analysis is more optimistic overall than I am... which is generally how the market performs. (We engineers should be conservative.)

I have been a c-series/A220 cheerleader forever; the concept is that good. But since I have always been too enthusiastic on the type, I will accept there is a good chance of a slower ramp up. Actually, that whole size category (A220 plus E2-190/195) has done far worse than my expectations. :cry2: May I be shown to be pessimistic in the next few years on both!

StTim wrote:
lightsaber wrote:
I believe this is based on a freighter being offered. With that assumption, plausible. I also have seen data on 779 efficiency. While I haven't seen overall costs, I believe it will be the lowest cost way to transit passengers for flights over 3000nm.

Lightsaber

As ever lowest cost depends very much on the load factors.

Of course. Some of the 777x initial deliveries will only happen due to contract enforcement, at least in my opinion. The market will either recover ir stall at some new lower level. Either way, carrying passengers cheaply is a plus. If cheap enough for the size, then they sell. There is always the caviat that the extra seats on larger aircraft have lower yield (either discounting to stimulate demand or let some fly empty, so called "abuse" of larger aircraft).

By now we have interacted enough that you probably realized I favor P2P heavily. However, what I saw on the GE9x convinced me it is a full generation ahead of every other widebody engine. That means low fuel burn, but also "teething issues." I think the 777x will sell well within its lifetime.

Obviously, we must first dig out if the hole the debt crisis we were going into Covid19 or not (made worse, far worse in my opinion by money printing and the misalocation of resources that causes/enables) and now the global Covid19 recession.

Getting through 2021 us the challenge, then back to growth. It gets off topic to question how much bad policies might slow growth. But with growth, eventually, comes demand. We should debate when that demand happens.

Lightsaber

Like I said. The performance of the GE9X will be the saving grace of the 779! Will it have a slow start? Probably but nevertheless it will sell well. So does what you’re seeing surpass 10% lower fuel burn than the GE90-115B?

I do think production for the jet will probably stay below 5 till the middlish of the decade. But i suspect early adopters will be happy with the performance which means repeat business for the likes of BA and LH. If you can get repeat business it helps with new sales. But I also suspect one more sale will close before EIS
 
iamlucky13
Posts: 1352
Joined: Wed Aug 08, 2007 12:35 pm

Re: The case for more aircraft production cuts/playing chicken

Wed Dec 16, 2020 12:23 am

oldJoe wrote:
I take this article with a grain of salt. Wich accuracy can I expect when the actual real numbers for this year are not correct.
An article from today wth a Bernstein Research forecast from yesterday tells us : A220 31 dliveries where as end of November already 32 deliveries took place !
A380 deliveris in 2020 and 2021 total 3 ! Where are the other six frames left ? Boeing 747 deliveries 2020 3. At end of November already 4 delivered.
And so on ... They better cheked the delivery thread here on a-net !
When they can`t make a forecast for only one month what we expect for 5 years ?


Deliveries are really difficult to predict in the short term right now because of the messed up demand, the accumulation of undelivered frames, and the percentage volatility that occurs with small changes in low production rates.

If the forecast is based on a production and demand model focused on long term trends, it's not necessarily a concern to me if it misses short term volatility, especially at a time when production and delivery uncertainty is unusually high, but expected to stabilize over the next 6-12 months.

StTim wrote:
Seems quite bullish about the 777X for what I see as a niche product. 50 frames in 2025 yet only 86 for the much more versatile 787. Doesn't feel right to me.


4 per month is not bullish. The 777 was a 7+/month product for a while. Deliveries were already in a big slump before the pandemic due to airlines having already reacted to the excess of large widebodies. The over-supply of large widebodies is already in the process of being worked through, with the cut of the 777 rate to around 4, and then to 2, including freighters, plus the slowing and pending shutdown of the 747-8 and A380 lines.

The oversupply of the rest of the widebodies has only just started to be addressed, and yet the 787 and A350 still dominate forecast deliveries.

Looked at another way, of the widebodies to be delivered during 2020 through 2025, Bernstein thinks only 10% of them will be the 777X (140 of 1,392 frames). They think the 787 and A350 will each deliver at least 3 times as many frames.

Also, I agree with Lightsaber that some of those 777X deliveries will be driven mainly due to contractual obligations. That will likely keep deliveries ahead of demand for several additional years, shaving the peak future demand.

lightsaber wrote:
Obviously, we must first dig out if the hole the debt crisis we were going into Covid19 or not (made worse, far worse in my opinion by money printing and the misalocation of resources that causes/enables) and now the global Covid19 recession.


Don't read the sentiments on investing forums about the "debt crisis." It will knot your stomach up to see how widespread the sentiment is that cheap debt is the new normal, so we should not worry about high debt loads because the low cost of borrowing will help drive the markets up-up-up!
 
User avatar
seahawk
Posts: 9997
Joined: Fri May 27, 2005 1:29 am

Re: The case for more aircraft production cuts/playing chicken

Wed Dec 16, 2020 8:58 am

Opus99 wrote:
lightsaber wrote:
Forecasts of any value take months to develop, so will lag. If more A220 deliveries happen in 2020, it probably means less in a future year. I always allow for some peanut buttering of deliveries.

I personally think there will be more A220 deliveries, but that could be my hope. In particular if the rumored range increase happens. I see Breeze, IAG, JetBlue, and Korean Air taking advantage of thin long with the type.

That analysis is more optimistic overall than I am... which is generally how the market performs. (We engineers should be conservative.)

I have been a c-series/A220 cheerleader forever; the concept is that good. But since I have always been too enthusiastic on the type, I will accept there is a good chance of a slower ramp up. Actually, that whole size category (A220 plus E2-190/195) has done far worse than my expectations. :cry2: May I be shown to be pessimistic in the next few years on both!

StTim wrote:
As ever lowest cost depends very much on the load factors.

Of course. Some of the 777x initial deliveries will only happen due to contract enforcement, at least in my opinion. The market will either recover ir stall at some new lower level. Either way, carrying passengers cheaply is a plus. If cheap enough for the size, then they sell. There is always the caviat that the extra seats on larger aircraft have lower yield (either discounting to stimulate demand or let some fly empty, so called "abuse" of larger aircraft).

By now we have interacted enough that you probably realized I favor P2P heavily. However, what I saw on the GE9x convinced me it is a full generation ahead of every other widebody engine. That means low fuel burn, but also "teething issues." I think the 777x will sell well within its lifetime.

Obviously, we must first dig out if the hole the debt crisis we were going into Covid19 or not (made worse, far worse in my opinion by money printing and the misalocation of resources that causes/enables) and now the global Covid19 recession.

Getting through 2021 us the challenge, then back to growth. It gets off topic to question how much bad policies might slow growth. But with growth, eventually, comes demand. We should debate when that demand happens.

Lightsaber

Like I said. The performance of the GE9X will be the saving grace of the 779! Will it have a slow start? Probably but nevertheless it will sell well. So does what you’re seeing surpass 10% lower fuel burn than the GE90-115B?

I do think production for the jet will probably stay below 5 till the middlish of the decade. But i suspect early adopters will be happy with the performance which means repeat business for the likes of BA and LH. If you can get repeat business it helps with new sales. But I also suspect one more sale will close before EIS


Performance is one thing, size is another. And nobody knows how air travel will develop in the future. By mid 2021 (when vaccines might make it possible to return to a more normal situation) companies will have worked 1 year with a lot less business travel, one can speculate if it will return ´to the previous levels or not. I believe it won´t because video conferencing has proven itself in the meantime.

Less business travel means less demand for premium seats, means cabins will move to a higher density configuration, which means the same capacity can be offered on smaller planes.
 
Opus99
Posts: 1514
Joined: Thu May 30, 2019 10:51 pm

Re: The case for more aircraft production cuts/playing chicken

Wed Dec 16, 2020 9:44 am

seahawk wrote:
Opus99 wrote:
lightsaber wrote:
Forecasts of any value take months to develop, so will lag. If more A220 deliveries happen in 2020, it probably means less in a future year. I always allow for some peanut buttering of deliveries.

I personally think there will be more A220 deliveries, but that could be my hope. In particular if the rumored range increase happens. I see Breeze, IAG, JetBlue, and Korean Air taking advantage of thin long with the type.

That analysis is more optimistic overall than I am... which is generally how the market performs. (We engineers should be conservative.)

I have been a c-series/A220 cheerleader forever; the concept is that good. But since I have always been too enthusiastic on the type, I will accept there is a good chance of a slower ramp up. Actually, that whole size category (A220 plus E2-190/195) has done far worse than my expectations. :cry2: May I be shown to be pessimistic in the next few years on both!


Of course. Some of the 777x initial deliveries will only happen due to contract enforcement, at least in my opinion. The market will either recover ir stall at some new lower level. Either way, carrying passengers cheaply is a plus. If cheap enough for the size, then they sell. There is always the caviat that the extra seats on larger aircraft have lower yield (either discounting to stimulate demand or let some fly empty, so called "abuse" of larger aircraft).

By now we have interacted enough that you probably realized I favor P2P heavily. However, what I saw on the GE9x convinced me it is a full generation ahead of every other widebody engine. That means low fuel burn, but also "teething issues." I think the 777x will sell well within its lifetime.

Obviously, we must first dig out if the hole the debt crisis we were going into Covid19 or not (made worse, far worse in my opinion by money printing and the misalocation of resources that causes/enables) and now the global Covid19 recession.

Getting through 2021 us the challenge, then back to growth. It gets off topic to question how much bad policies might slow growth. But with growth, eventually, comes demand. We should debate when that demand happens.

Lightsaber

Like I said. The performance of the GE9X will be the saving grace of the 779! Will it have a slow start? Probably but nevertheless it will sell well. So does what you’re seeing surpass 10% lower fuel burn than the GE90-115B?

I do think production for the jet will probably stay below 5 till the middlish of the decade. But i suspect early adopters will be happy with the performance which means repeat business for the likes of BA and LH. If you can get repeat business it helps with new sales. But I also suspect one more sale will close before EIS


Performance is one thing, size is another. And nobody knows how air travel will develop in the future. By mid 2021 (when vaccines might make it possible to return to a more normal situation) companies will have worked 1 year with a lot less business travel, one can speculate if it will return ´to the previous levels or not. I believe it won´t because video conferencing has proven itself in the meantime.

Less business travel means less demand for premium seats, means cabins will move to a higher density configuration, which means the same capacity can be offered on smaller planes.

Very good points raised. But like I’ve said we all use teleconferencing in the work place. It had proven itself long ago. It did replace some travel but not all. Until it absolutely had to. I’m not sure how businesses will react when we do not have to. Especislly businesses that count on in person sales, client meetings etc. Business travel will come back in phases but it will take a long time. If we are saying pre pandemic levels will return, does that exclude business travel? Will there be nobody traveling for business again? What’s the extent? Will it means less frequencies? Or just less equipment. In this pandemic and lockdown people were still traveling for work. Very small but yes. Look at China domestic, did they not use teleconferencing under lockdown, that has now returned Pre pandemic levels.

EDIT: Also performance means the 777X has low fuel burn right, a big issue with big planes is their size inherently increases their fuel burn making them expensive. Every big jet has had the same issue. Too expensive to operate, so when you don’t get enough people it fails and becomes “too big”. Per the 380. But you fill it up seasonally but not always so it’s high risk. If I have a 777X that is much cheaper to operate than a 20 year old 77W both per seat and per trip. If you’re hitting fuel burn numbers of around 6-6.4 tonnes per hour (A35K numbers). How much risk it attached to it? Depends on your numbers but. You also raised another good point. Some might densify. But you sacrifice cargo capacity especially in the APAC region where the 77W is holding up a lot of routes. Even pre pandemic levels.
Last edited by Opus99 on Wed Dec 16, 2020 9:55 am, edited 2 times in total.
 
FluidFlow
Posts: 831
Joined: Wed Apr 10, 2019 6:39 am

Re: The case for more aircraft production cuts/playing chicken

Wed Dec 16, 2020 9:51 am

Opus99 wrote:
seahawk wrote:
Opus99 wrote:
Like I said. The performance of the GE9X will be the saving grace of the 779! Will it have a slow start? Probably but nevertheless it will sell well. So does what you’re seeing surpass 10% lower fuel burn than the GE90-115B?

I do think production for the jet will probably stay below 5 till the middlish of the decade. But i suspect early adopters will be happy with the performance which means repeat business for the likes of BA and LH. If you can get repeat business it helps with new sales. But I also suspect one more sale will close before EIS


Performance is one thing, size is another. And nobody knows how air travel will develop in the future. By mid 2021 (when vaccines might make it possible to return to a more normal situation) companies will have worked 1 year with a lot less business travel, one can speculate if it will return ´to the previous levels or not. I believe it won´t because video conferencing has proven itself in the meantime.

Less business travel means less demand for premium seats, means cabins will move to a higher density configuration, which means the same capacity can be offered on smaller planes.

Very good points raised. But like I’ve said we all use teleconferencing in the work place. It had proven itself long ago. It did replace some travel but not all. Until it absolutely had to. I’m not sure how businesses will react when we do not have to. Especislly businesses that count on in person sales, client meetings etc. Business travel will come back in phases but it will take a long time. If we are saying pre pandemic levels will return, does that exclude business travel? Will there be nobody traveling for business again? What’s the extent? Will it means less frequencies? Or just less equipment. In this pandemic and lockdown people were still traveling for work. Very small but yes. Look at China domestic, did they not use teleconferencing under lockdown, that has now returned Pre pandemic levels


The question will be, what is the split between leisure and business traffic. Now this are just pure fantasy numbers, as I do not have data available right now. So lets say in 2019 the leisure to business travel ratio was 90/10 and the revenue ratio was 60/40, a shift in leisure to business travel ratio towards 95/5 will depress revenue massively for airlines that rely on business travel revenue. While leisure revenue only increases by a bit over 5% business revenue is halved. EDIT: Under the assumption 100% is the same amount of travelers as in 2019. So while leisure increases by 5 points, business decreases by 5 points.
 
Opus99
Posts: 1514
Joined: Thu May 30, 2019 10:51 pm

Re: The case for more aircraft production cuts/playing chicken

Wed Dec 16, 2020 9:59 am

FluidFlow wrote:
Opus99 wrote:
seahawk wrote:

Performance is one thing, size is another. And nobody knows how air travel will develop in the future. By mid 2021 (when vaccines might make it possible to return to a more normal situation) companies will have worked 1 year with a lot less business travel, one can speculate if it will return ´to the previous levels or not. I believe it won´t because video conferencing has proven itself in the meantime.

Less business travel means less demand for premium seats, means cabins will move to a higher density configuration, which means the same capacity can be offered on smaller planes.

Very good points raised. But like I’ve said we all use teleconferencing in the work place. It had proven itself long ago. It did replace some travel but not all. Until it absolutely had to. I’m not sure how businesses will react when we do not have to. Especislly businesses that count on in person sales, client meetings etc. Business travel will come back in phases but it will take a long time. If we are saying pre pandemic levels will return, does that exclude business travel? Will there be nobody traveling for business again? What’s the extent? Will it means less frequencies? Or just less equipment. In this pandemic and lockdown people were still traveling for work. Very small but yes. Look at China domestic, did they not use teleconferencing under lockdown, that has now returned Pre pandemic levels


The question will be, what is the split between leisure and business traffic. Now this are just pure fantasy numbers, as I do not have data available right now. So lets say in 2019 the leisure to business travel ratio was 90/10 and the revenue ratio was 60/40, a shift in leisure to business travel ratio towards 95/5 will depress revenue massively for airlines that rely on business travel revenue. While leisure revenue only increases by a bit over 5% business revenue is halved. EDIT: Under the assumption 100% is the same amount of travelers as in 2019. So while leisure increases by 5 points, business decreases by 5 points.

Very good analysis here, that makes sense. Is there a way to make leisure more profitable? Or is the late 7000 jfk-lhr really where it’s at?
 
FluidFlow
Posts: 831
Joined: Wed Apr 10, 2019 6:39 am

Re: The case for more aircraft production cuts/playing chicken

Wed Dec 16, 2020 10:24 am

Opus99 wrote:
FluidFlow wrote:
Opus99 wrote:
Very good points raised. But like I’ve said we all use teleconferencing in the work place. It had proven itself long ago. It did replace some travel but not all. Until it absolutely had to. I’m not sure how businesses will react when we do not have to. Especislly businesses that count on in person sales, client meetings etc. Business travel will come back in phases but it will take a long time. If we are saying pre pandemic levels will return, does that exclude business travel? Will there be nobody traveling for business again? What’s the extent? Will it means less frequencies? Or just less equipment. In this pandemic and lockdown people were still traveling for work. Very small but yes. Look at China domestic, did they not use teleconferencing under lockdown, that has now returned Pre pandemic levels


The question will be, what is the split between leisure and business traffic. Now this are just pure fantasy numbers, as I do not have data available right now. So lets say in 2019 the leisure to business travel ratio was 90/10 and the revenue ratio was 60/40, a shift in leisure to business travel ratio towards 95/5 will depress revenue massively for airlines that rely on business travel revenue. While leisure revenue only increases by a bit over 5% business revenue is halved. EDIT: Under the assumption 100% is the same amount of travelers as in 2019. So while leisure increases by 5 points, business decreases by 5 points.

Very good analysis here, that makes sense. Is there a way to make leisure more profitable? Or is the late 7000 jfk-lhr really where it’s at?


On P2P routes, the ULCC model is the most profitable for leisure traffic. Bare minimum service with lots of extra revenue potential.

The real suffering will come for connecting passengers, where there are only a few connections possible. Carriers will squeeze routes where they have a relative monopoly. That's what I would predict. Additional fees are also a possibility. Together with reduced services. More "light" fares with harsh T&Cs especially for booking bags, overweight, oversize, etc.
 
astuteman
Posts: 7237
Joined: Mon Jan 24, 2005 7:50 pm

Re: The case for more aircraft production cuts/playing chicken

Wed Dec 16, 2020 10:53 am

StTim wrote:
Seems quite bullish about the 777X for what I see as a niche product. 50 frames in 2025 yet only 86 for the much more versatile 787. Doesn't feel right to me.


It also shows 737 deliveries matching or exceeding A320 deliveries in the period too, which also doesn't feel right relative to the trend pre-Covid

Rgds
 
User avatar
seahawk
Posts: 9997
Joined: Fri May 27, 2005 1:29 am

Re: The case for more aircraft production cuts/playing chicken

Wed Dec 16, 2020 11:51 am

Opus99 wrote:
seahawk wrote:
Opus99 wrote:
Like I said. The performance of the GE9X will be the saving grace of the 779! Will it have a slow start? Probably but nevertheless it will sell well. So does what you’re seeing surpass 10% lower fuel burn than the GE90-115B?

I do think production for the jet will probably stay below 5 till the middlish of the decade. But i suspect early adopters will be happy with the performance which means repeat business for the likes of BA and LH. If you can get repeat business it helps with new sales. But I also suspect one more sale will close before EIS


Performance is one thing, size is another. And nobody knows how air travel will develop in the future. By mid 2021 (when vaccines might make it possible to return to a more normal situation) companies will have worked 1 year with a lot less business travel, one can speculate if it will return ´to the previous levels or not. I believe it won´t because video conferencing has proven itself in the meantime.

Less business travel means less demand for premium seats, means cabins will move to a higher density configuration, which means the same capacity can be offered on smaller planes.

Very good points raised. But like I’ve said we all use teleconferencing in the work place. It had proven itself long ago. It did replace some travel but not all. Until it absolutely had to. I’m not sure how businesses will react when we do not have to. Especislly businesses that count on in person sales, client meetings etc. Business travel will come back in phases but it will take a long time. If we are saying pre pandemic levels will return, does that exclude business travel? Will there be nobody traveling for business again? What’s the extent? Will it means less frequencies? Or just less equipment. In this pandemic and lockdown people were still traveling for work. Very small but yes. Look at China domestic, did they not use teleconferencing under lockdown, that has now returned Pre pandemic levels.

EDIT: Also performance means the 777X has low fuel burn right, a big issue with big planes is their size inherently increases their fuel burn making them expensive. Every big jet has had the same issue. Too expensive to operate, so when you don’t get enough people it fails and becomes “too big”. Per the 380. But you fill it up seasonally but not always so it’s high risk. If I have a 777X that is much cheaper to operate than a 20 year old 77W both per seat and per trip. If you’re hitting fuel burn numbers of around 6-6.4 tonnes per hour (A35K numbers). How much risk it attached to it? Depends on your numbers but. You also raised another good point. Some might densify. But you sacrifice cargo capacity especially in the APAC region where the 77W is holding up a lot of routes. Even pre pandemic levels.


Do not forget that China slashed ticket prices by around 60%, this has stimulated the demand. I can not see airlines being able to do the same in the west, or governments giving money for that purpose. And when it comes to replacing the 777Ws the 777-9 is a noticeable increase in capacity, the A350 or the 787 could be equally fitting though, especially if you stay away from the long range requirements.
 
StTim
Posts: 3800
Joined: Thu Aug 08, 2013 7:39 am

Re: The case for more aircraft production cuts/playing chicken

Wed Dec 16, 2020 2:34 pm

astuteman wrote:
StTim wrote:
Seems quite bullish about the 777X for what I see as a niche product. 50 frames in 2025 yet only 86 for the much more versatile 787. Doesn't feel right to me.


It also shows 737 deliveries matching or exceeding A320 deliveries in the period too, which also doesn't feel right relative to the trend pre-Covid

Rgds


I looked at that as well and thought it rather reflected the delivery of stored 737's built during the grounding. I suspect that will happen and may lead to the 737 out delivering the 320 for a short period. The underlying rate however will remain lower than the 320.
 
Opus99
Posts: 1514
Joined: Thu May 30, 2019 10:51 pm

Re: The case for more aircraft production cuts/playing chicken

Wed Dec 16, 2020 2:36 pm

https://twitter.com/londonairtravel/sta ... 92899?s=21

Do these BA cancellations mean they’re backing out of point to point?
 
morrisond
Posts: 3129
Joined: Thu Jan 07, 2010 12:22 am

Re: The case for more aircraft production cuts/playing chicken

Wed Dec 16, 2020 2:59 pm

StTim wrote:
astuteman wrote:
StTim wrote:
Seems quite bullish about the 777X for what I see as a niche product. 50 frames in 2025 yet only 86 for the much more versatile 787. Doesn't feel right to me.


It also shows 737 deliveries matching or exceeding A320 deliveries in the period too, which also doesn't feel right relative to the trend pre-Covid

Rgds


I looked at that as well and thought it rather reflected the delivery of stored 737's built during the grounding. I suspect that will happen and may lead to the 737 out delivering the 320 for a short period. The underlying rate however will remain lower than the 320.


That is my take on it as well. I doubt the MAX will ever get to NEO in terms of build rate before being replaced and will always be 10-20 frames behind per month, which is still a lot of aircraft.
 
User avatar
lightsaber
Moderator
Topic Author
Posts: 21175
Joined: Wed Jan 19, 2005 10:55 pm

Re: The case for more aircraft production cuts/playing chicken

Wed Dec 16, 2020 3:06 pm

StTim wrote:
astuteman wrote:
StTim wrote:
Seems quite bullish about the 777X for what I see as a niche product. 50 frames in 2025 yet only 86 for the much more versatile 787. Doesn't feel right to me.


It also shows 737 deliveries matching or exceeding A320 deliveries in the period too, which also doesn't feel right relative to the trend pre-Covid

Rgds


I looked at that as well and thought it rather reflected the delivery of stored 737's built during the grounding. I suspect that will happen and may lead to the 737 out delivering the 320 for a short period. The underlying rate however will remain lower than the 320.

I agree. Boeing has a huge stored supply. Long term, A320s are out-delivering the MAX by a plausible ratio.

Any surge is just the slingshot effect of over-production.

Lightsaber

Late edit, the 737 production will be about 50 per year less in 2025 than the A320 and that difference will probably grow (I would think by more A320 production, long term). I dislike talking monthly as Boeing at 52.5/month = Airbus at 60/month = 630/year
3 months without TV. The best decision of my life.
 
User avatar
Revelation
Posts: 25232
Joined: Wed Feb 09, 2005 9:37 pm

Re: The case for more aircraft production cuts/playing chicken

Wed Dec 16, 2020 3:25 pm

morrisond wrote:
I doubt the MAX will ever get to NEO in terms of build rate before being replaced and will always be 10-20 frames behind per month, which is still a lot of aircraft.

Right, MAX was never aiming to win the production rate race. Boeing only has one FAL site and a supply chain sized / structured to feed that one site. The idea was to maximize the profit produced by that infrastructure even if it means leaving a lot of potential volume to the competitors. Now the 'maximization' (pun not intended) has been derailed by the MCAS tragedy and the COVID crisis, but it still doesn't change the fact that even in ideal circumstances MAX was never going to outproduce the NEO. Airbus has four FAL sites with more individual FAL lines to feed which is a plus when all are at full rate but a minus when they are not.
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
 
User avatar
lightsaber
Moderator
Topic Author
Posts: 21175
Joined: Wed Jan 19, 2005 10:55 pm

Re: The case for more aircraft production cuts/playing chicken

Wed Dec 16, 2020 3:28 pm

I just summed up the estimated difference in 2019-2025 deliveries
A320: 3765 aircraft
737: 2852 aircraft
A220: 322 aircraft.

Or a difference of 913 aircraft. That seems a plausible difference.

Note: I am more bearish than that estimate. That estimate has 2019-2025 at 6,939 narrowbodies + E295. I estimate over a thousand less in demand. I hope I am wrong.

Note: the only reason I consider the MAX/NEO ratio plausible is the heavy discounting Boeing is doing. If that stops or Airbus matches discounts (which I consider unlikely), the ratio will change.

Lightsaber
3 months without TV. The best decision of my life.
 
User avatar
lightsaber
Moderator
Topic Author
Posts: 21175
Joined: Wed Jan 19, 2005 10:55 pm

Re: The case for more aircraft production cuts/playing chicken

Thu Dec 31, 2020 4:46 pm

Capa article noting:
With many aircraft parked and international traffic in the doldrums, airlines are scrambling to negotiate new financing and are looking to defer as many short term aircraft deliveries as possible. The traffic and demand growth assumptions that have formed the basis of airline plans have been rendered obsolete by the pandemic, forcing them to launch business reviews as they recognise the need to streamline their operations.
https://centreforaviation.com/analysis/ ... try-534197

I know I am a broken record, but I see no need for the elevated production rates. I know Boeing must deliver MAXs to survive, but as there isn't a need for the already delivered, that will push down the values of older 737s. No market is independent. Too many airlines fly both, could switch, or just must compete against what I see are the coming discounts, so this has and will continue to hit all versions of the A320:

I repost this link:
https://leehamnews.com/2020/11/09/ponti ... ts-plunge/

-8 MAX at $38 million
-9 MAX at $41 million (a few million less than -8 prior to grounding/Covid19) (about 20% less than before).
A320NEO prices are vague, but Airbus doesn't seem willing to go down to $41 million, at least as I interpreted that link.
A321NEO is still above $50 million, but I cannot see that holding.

I'm not discussing widebodies as I just do not see demand for years. There must be freight conversions and scrapping to get the fleet down to the 2023 demand (which I estimate is going to be 20% below 2019).

Lightsaber
3 months without TV. The best decision of my life.
 
pugman211
Posts: 558
Joined: Thu Dec 20, 2012 1:55 pm

Re: The case for more aircraft production cuts/playing chicken

Thu Dec 31, 2020 5:34 pm

Thanks @Lightsaber! 2021 is going to be interesting all round for all programmes.
 
User avatar
flee
Posts: 1410
Joined: Mon Oct 12, 2009 8:14 am

Re: The case for more aircraft production cuts/playing chicken

Fri Jan 01, 2021 2:42 am

lightsaber wrote:
A321NEO is still above $50 million, but I cannot see that holding.

I'm not discussing widebodies as I just do not see demand for years. There must be freight conversions and scrapping to get the fleet down to the 2023 demand (which I estimate is going to be 20% below 2019).

Lightsaber

We will be in the middle of significant numbers of B777 and A330 end of lease retirements in the coming years. Many of these aircraft will not be replaced at all. For airlines that need to replace them, I foresee the A321Neo XLR will be chosen - widebodies will only be needed if they need more range.
 
Opus99
Posts: 1514
Joined: Thu May 30, 2019 10:51 pm

Re: The case for more aircraft production cuts/playing chicken

Fri Jan 01, 2021 7:31 am

flee wrote:
lightsaber wrote:
A321NEO is still above $50 million, but I cannot see that holding.

I'm not discussing widebodies as I just do not see demand for years. There must be freight conversions and scrapping to get the fleet down to the 2023 demand (which I estimate is going to be 20% below 2019).

Lightsaber

We will be in the middle of significant numbers of B777 and A330 end of lease retirements in the coming years. Many of these aircraft will not be replaced at all. For airlines that need to replace them, I foresee the A321Neo XLR will be chosen - widebodies will only be needed if they need more range.

Or more people or more cargo. People get so fixated on one aircraft that they think can do ALL things
 
User avatar
flee
Posts: 1410
Joined: Mon Oct 12, 2009 8:14 am

Re: The case for more aircraft production cuts/playing chicken

Fri Jan 01, 2021 1:32 pm

Opus99 wrote:
flee wrote:
lightsaber wrote:
A321NEO is still above $50 million, but I cannot see that holding.

I'm not discussing widebodies as I just do not see demand for years. There must be freight conversions and scrapping to get the fleet down to the 2023 demand (which I estimate is going to be 20% below 2019).

Lightsaber

We will be in the middle of significant numbers of B777 and A330 end of lease retirements in the coming years. Many of these aircraft will not be replaced at all. For airlines that need to replace them, I foresee the A321Neo XLR will be chosen - widebodies will only be needed if they need more range.

Or more people or more cargo. People get so fixated on one aircraft that they think can do ALL things

For more people, airliners.net common wisdom is to increase frequencies. For more cargo, we have already seen an increase in P2F projects by the many cargo carriers. Still, it will be interesting to see how the aviation industry moves along post Covid-19.
 
MIflyer12
Posts: 8976
Joined: Mon Feb 18, 2013 11:58 pm

Re: The case for more aircraft production cuts/playing chicken

Fri Jan 01, 2021 2:17 pm

Opus99 wrote:
Or more people or more cargo. People get so fixated on one aircraft that they think can do ALL things


The 321XLR is the latest shiny and new to cause mass perseveration among a.netters, as the A220 had been. Observe that, thirteen years after Board approval to offer, only three of North America's largest 15 marketing airlines by fleet count have even ordered the A220. If my quick look is right, eight have ordered MAXs (call it 9 1/2 years after launch) and nine have ordered 32Xneos (ten years last month).
 
Gremlinzzzz
Posts: 144
Joined: Fri Jan 24, 2020 4:28 am

Re: The case for more aircraft production cuts/playing chicken

Fri Jan 01, 2021 2:48 pm

flee wrote:
We will be in the middle of significant numbers of B777 and A330 end of lease retirements in the coming years. Many of these aircraft will not be replaced at all. For airlines that need to replace them, I foresee the A321Neo XLR will be chosen - widebodies will only be needed if they need more range.
There is a market where wide body aircraft and narrow body aircraft can coexist.

If you had great success with the 777 or A330, why would you down gauge to the A321?
 
morrisond
Posts: 3129
Joined: Thu Jan 07, 2010 12:22 am

Re: The case for more aircraft production cuts/playing chicken

Fri Jan 01, 2021 3:49 pm

Gremlinzzzz wrote:
flee wrote:
We will be in the middle of significant numbers of B777 and A330 end of lease retirements in the coming years. Many of these aircraft will not be replaced at all. For airlines that need to replace them, I foresee the A321Neo XLR will be chosen - widebodies will only be needed if they need more range.
There is a market where wide body aircraft and narrow body aircraft can coexist.

If you had great success with the 777 or A330, why would you down gauge to the A321?


In an ERA of probable continued high on-line ordering and the US abandoning America First meaning continuing production of goods in low cost labour areas - the ability to carry cargo will continue to get even more attention from Airlines to pad weak customer demand.

The achilles heel of NB's flying longer range is the inability to carry basically any cargo. In reality an A321NEOXLR is not an 5,000 NM aircraft - but more like 3,700-4,000 with 180ish Passengers in real conditions with long range baggage and no cargo.

Widebodies will have a place but it won't be the A350/777X sized ones - A330 NEO will probably survive and lots more inexpensive 787 coming off the lines with the 787 probably due for a PIP sooner than any of the above driving economics and sales. Consolidation of 787 production in one site will also help profitability.

Cost per frame to do the job will be the name of the game new vs used. A350 and 777X will not win this battle - both are way too expensive.

That being said - given the existing widebody glut - its hard to see much more than 15ish or so 330/787 coming off the lines per month for the foreseeable future.
 
jeffrey0032j
Posts: 924
Joined: Wed Jun 15, 2016 3:11 pm

Re: The case for more aircraft production cuts/playing chicken

Fri Jan 01, 2021 4:08 pm

flee wrote:
Opus99 wrote:
flee wrote:
We will be in the middle of significant numbers of B777 and A330 end of lease retirements in the coming years. Many of these aircraft will not be replaced at all. For airlines that need to replace them, I foresee the A321Neo XLR will be chosen - widebodies will only be needed if they need more range.

Or more people or more cargo. People get so fixated on one aircraft that they think can do ALL things

For more people, airliners.net common wisdom is to increase frequencies. For more cargo, we have already seen an increase in P2F projects by the many cargo carriers. Still, it will be interesting to see how the aviation industry moves along post Covid-19.

Its cheaper to operate 1 WB vs 1 NB pax + 1 NB Cargo. Plus the fact that most airlines do not have the capabilities or strategic strength in the cargo business to justify operating pure cargo planes.
 
Gremlinzzzz
Posts: 144
Joined: Fri Jan 24, 2020 4:28 am

Re: The case for more aircraft production cuts/playing chicken

Fri Jan 01, 2021 4:11 pm

morrisond wrote:
Gremlinzzzz wrote:
flee wrote:
We will be in the middle of significant numbers of B777 and A330 end of lease retirements in the coming years. Many of these aircraft will not be replaced at all. For airlines that need to replace them, I foresee the A321Neo XLR will be chosen - widebodies will only be needed if they need more range.
There is a market where wide body aircraft and narrow body aircraft can coexist.

If you had great success with the 777 or A330, why would you down gauge to the A321?


In an ERA of probable continued high on-line ordering and the US abandoning America First meaning continuing production of goods in low cost labour areas - the ability to carry cargo will continue to get even more attention from Airlines to pad weak customer demand.

The achilles heel of NB's flying longer range is the inability to carry basically any cargo. In reality an A321NEOXLR is not an 5,000 NM aircraft - but more like 3,700-4,000 with 180ish Passengers in real conditions with long range baggage and no cargo.

Widebodies will have a place but it won't be the A350/777X sized ones - A330 NEO will probably survive and lots more inexpensive 787 coming off the lines with the 787 probably due for a PIP sooner than any of the above driving economics and sales. Consolidation of 787 production in one site will also help profitability.

Cost per frame to do the job will be the name of the game new vs used. A350 and 777X will not win this battle - both are way too expensive.

That being said - given the existing widebody glut - its hard to see much more than 15ish or so 330/787 coming off the lines per month for the foreseeable future.
If cost was the main issue, you would not see airlines ordering more A330 than A350. Airlines and lessors wanted a clean sheet wide body aircraft from Airbus, got one, and then proceeded to order them in huge numbers. Those that want a smaller wide body can get the A330NEO; this is what Delta is doing. Those that want more range, more capacity and cargo ability, go for the A350-900, while those that want more capacity (and they are there) will get the A350-1000.

The airlines that operate trunk routes and more so slot constrained trunk routes will go for the A350/777X to replace some 777/A380. Demand for aviation may be down for a few years, but once the hard times are done, demand will reach where it was, and then grow. As is the case with every business, airlines will want the most efficient aircraft types to better compete, and those just happen to be the 787, A330NEO, A350, and for those that can make it work, the 777X.
 
User avatar
lightsaber
Moderator
Topic Author
Posts: 21175
Joined: Wed Jan 19, 2005 10:55 pm

Re: The case for more aircraft production cuts/playing chicken

Fri Jan 01, 2021 4:23 pm

morrisond wrote:
Gremlinzzzz wrote:
flee wrote:
We will be in the middle of significant numbers of B777 and A330 end of lease retirements in the coming years. Many of these aircraft will not be replaced at all. For airlines that need to replace them, I foresee the A321Neo XLR will be chosen - widebodies will only be needed if they need more range.
There is a market where wide body aircraft and narrow body aircraft can coexist.

If you had great success with the 777 or A330, why would you down gauge to the A321?


In an ERA of probable continued high on-line ordering and the US abandoning America First meaning continuing production of goods in low cost labour areas - the ability to carry cargo will continue to get even more attention from Airlines to pad weak customer demand.

The achilles heel of NB's flying longer range is the inability to carry basically any cargo. In reality an A321NEOXLR is not an 5,000 NM aircraft - but more like 3,700-4,000 with 180ish Passengers in real conditions with long range baggage and no cargo.

Widebodies will have a place but it won't be the A350/777X sized ones - A330 NEO will probably survive and lots more inexpensive 787 coming off the lines with the 787 probably due for a PIP sooner than any of the above driving economics and sales. Consolidation of 787 production in one site will also help profitability.

Cost per frame to do the job will be the name of the game new vs used. A350 and 777X will not win this battle - both are way too expensive.

That being said - given the existing widebody glut - its hard to see much more than 15ish or so 330/787 coming off the lines per month for the foreseeable future.

Before Covid19, cargo was hurting:
https://www.aviationpros.com/airlines/p ... since-2009

All markets except Africa suffered volume declines in 2019.

When widebodies fly again carrying people, that belly space will be back tanking freight rates. There is no way the "light freighters" (passenger aircraft, not converted aircraft, carrying freight with fa on fire watch and horrid turn times requiring mass labor to load/unload) will continue.

In that market, the long range narrowbodies will thrive. It won't just be Airbus, we had the -8 MAX doing well TATL prior to the grounding and I will be shocked if the discussed -9ER (shorter body, add fuel tanks with -10 gear and MTOW) doesn't happen.

I've been on a.net long enough to remember the "people prefer widebody flights" for TCON missions and "passengers prefer quads" for TATL.

There will be widebodies on trunk routes that pay for the big seats.

But first we have to get back to business. The small business owners who are my friends won't be going on a cruise for years. If taxes rise (and they will) that reduces all discretionary spending which will hit air travel.

I believe the low frequency (2x to 4x per week) P2P flights will be the primary growth in the market until the return of business travel (probably 2023, in my best guess) and business travel will gradually return as it did after the last downturn.

I'm curious how much mid size cities will grow. Remote work, in my opinion, will shrink a bit as people are more efficient with interaction. Those that can fly in and out for important meetings will benefit. The loser will be cities with constrained air travel. e.g., Austin Texas is taking business from San Francisco and Los Angeles or Ft. Lauderdale/Miami from New York. I do not believe the impacted cities can be the headquarters of tomorrow's companies.

This bodes well for London (assuming they continue to allow airport expansion). I posted way upthread how BP had a breakthrough on biofuel where every 30% of biofuel reduces carbon 20%. So well managed metropolitan areas will grow.

But it is where and when. I am a bear on aviation for now. By 2025 I believe we will be back on strong growth. So now is the time to invest in infrastructure, including airports (Daxing, DEN, SLC, Navi Mumbai, new IST, SVO, 2nd Sydney, Jarkarta, new airports of India and Indonesia).

Widebodies will recover. Boeing needs a 777xF to save the type. It is keeping them in production until 2025 that shall be the challenge.

Lightsaber
3 months without TV. The best decision of my life.
 
morrisond
Posts: 3129
Joined: Thu Jan 07, 2010 12:22 am

Re: The case for more aircraft production cuts/playing chicken

Fri Jan 01, 2021 5:49 pm

Gremlinzzzz wrote:
morrisond wrote:
Gremlinzzzz wrote:
There is a market where wide body aircraft and narrow body aircraft can coexist.

If you had great success with the 777 or A330, why would you down gauge to the A321?


In an ERA of probable continued high on-line ordering and the US abandoning America First meaning continuing production of goods in low cost labour areas - the ability to carry cargo will continue to get even more attention from Airlines to pad weak customer demand.

The achilles heel of NB's flying longer range is the inability to carry basically any cargo. In reality an A321NEOXLR is not an 5,000 NM aircraft - but more like 3,700-4,000 with 180ish Passengers in real conditions with long range baggage and no cargo.

Widebodies will have a place but it won't be the A350/777X sized ones - A330 NEO will probably survive and lots more inexpensive 787 coming off the lines with the 787 probably due for a PIP sooner than any of the above driving economics and sales. Consolidation of 787 production in one site will also help profitability.

Cost per frame to do the job will be the name of the game new vs used. A350 and 777X will not win this battle - both are way too expensive.

That being said - given the existing widebody glut - its hard to see much more than 15ish or so 330/787 coming off the lines per month for the foreseeable future.
If cost was the main issue, you would not see airlines ordering more A330 than A350. Airlines and lessors wanted a clean sheet wide body aircraft from Airbus, got one, and then proceeded to order them in huge numbers. Those that want a smaller wide body can get the A330NEO; this is what Delta is doing. Those that want more range, more capacity and cargo ability, go for the A350-900, while those that want more capacity (and they are there) will get the A350-1000.

The airlines that operate trunk routes and more so slot constrained trunk routes will go for the A350/777X to replace some 777/A380. Demand for aviation may be down for a few years, but once the hard times are done, demand will reach where it was, and then grow. As is the case with every business, airlines will want the most efficient aircraft types to better compete, and those just happen to be the 787, A330NEO, A350, and for those that can make it work, the 777X.


I think you mixed the A330 and A350 up - A350's are a lot more expensive.

My main point is Airlines won't be able to afford new Large?expensive Widebodies - they won't take the risk for some time and I'll be surprised by any significant orders for some time for A350/777X.

Airlines if they do need new Capacity will be ordering the smallest/least expensive planes that can do the Job - 787/A330. There are tons of low hour 777W and A350 around for the bleeding edge use cases.

I agree with Lightsaber though about 739ER - that's a real no- brainer and applying the same mods to the 738 could be very interesting as well. Smallest aircraft to do the job. - Can't fill an A321 XLR - 739ER MAX then there is the 738ER which might be quite competitive with A321 XLR at least in range.
 
Gremlinzzzz
Posts: 144
Joined: Fri Jan 24, 2020 4:28 am

Re: The case for more aircraft production cuts/playing chicken

Fri Jan 01, 2021 6:15 pm

morrisond wrote:
I think you mixed the A330 and A350 up - A350's are a lot more expensive.

My main point is Airlines won't be able to afford new Large?expensive Widebodies - they won't take the risk for some time and I'll be surprised by any significant orders for some time for A350/777X.

Airlines if they do need new Capacity will be ordering the smallest/least expensive planes that can do the Job - 787/A330. There are tons of low hour 777W and A350 around for the bleeding edge use cases.

I agree with Lightsaber though about 739ER - that's a real no- brainer and applying the same mods to the 738 could be very interesting as well. Smallest aircraft to do the job. - Can't fill an A321 XLR - 739ER MAX then there is the 738ER which might be quite competitive with A321 XLR at least in range.
A330Neo - Cheaper, less orders.
A350 - More expensive, vastly more orders.

Cost has not been a deciding factor between these two types.

Airlines will not be replacing wide bodies with narrow body aircraft. Come on now. Business decisions are not being made on a whim because once in a lifetime pandemic happened. In three or so years, we will be back to where we were, and growing traffic once more if there is no other pandemic, or financial fallout. This pandemic will similarly be the end of some airlines that were not doing great, and airlines by and large will altogether shrink to try and survive.

What they will not do, is take a new narrow body frame for 12 years to replace a wide body jet. There are routes with good enough business traffic, the need to transport cargo, and are trunk routes even in a regional sense.

Airlines, are also not in the position to be taking in new planes. Have you seen how many are looking for deferrals, and how many are looking to talk to OEM's about cancelling orders or reducing some? It is not a wide body issue in isolation.
 
morrisond
Posts: 3129
Joined: Thu Jan 07, 2010 12:22 am

Re: The case for more aircraft production cuts/playing chicken

Fri Jan 01, 2021 6:31 pm

Gremlinzzzz wrote:
morrisond wrote:
I think you mixed the A330 and A350 up - A350's are a lot more expensive.

My main point is Airlines won't be able to afford new Large?expensive Widebodies - they won't take the risk for some time and I'll be surprised by any significant orders for some time for A350/777X.

Airlines if they do need new Capacity will be ordering the smallest/least expensive planes that can do the Job - 787/A330. There are tons of low hour 777W and A350 around for the bleeding edge use cases.

I agree with Lightsaber though about 739ER - that's a real no- brainer and applying the same mods to the 738 could be very interesting as well. Smallest aircraft to do the job. - Can't fill an A321 XLR - 739ER MAX then there is the 738ER which might be quite competitive with A321 XLR at least in range.
A330Neo - Cheaper, less orders.
A350 - More expensive, vastly more orders.

Cost has not been a deciding factor between these two types.

Airlines will not be replacing wide bodies with narrow body aircraft. Come on now. Business decisions are not being made on a whim because once in a lifetime pandemic happened. In three or so years, we will be back to where we were, and growing traffic once more if there is no other pandemic, or financial fallout. This pandemic will similarly be the end of some airlines that were not doing great, and airlines by and large will altogether shrink to try and survive.

What they will not do, is take a new narrow body frame for 12 years to replace a wide body jet. There are routes with good enough business traffic, the need to transport cargo, and are trunk routes even in a regional sense.

Airlines, are also not in the position to be taking in new planes. Have you seen how many are looking for deferrals, and how many are looking to talk to OEM's about cancelling orders or reducing some? It is not a wide body issue in isolation.


What do you think I am blind? I've been more pessimistic than even Lightsaber in this thread.

A350 Offer date July 14, 2006
A330 NEO Offer Date July 14, 2014 - Of course it has fewer orders

This is all Pre-Covid as well.

BTW we are discussing what happens in the next few years and I was only pointing out that the only frames in the WB space that have the largest chance of new orders if needed are the A330NEO and 787 due to their low cost and availability of early slots. Do I expect the 330 to beat the 350 over the next 15 years of course not but that is not what we are discussing.

I suggest you look at how many SA were ordered to replace WB's pre-covid - TATL traffic could have a large share in SA by 2030.
 
User avatar
lightsaber
Moderator
Topic Author
Posts: 21175
Joined: Wed Jan 19, 2005 10:55 pm

Re: The case for more aircraft production cuts/playing chicken

Fri Jan 01, 2021 6:38 pm

Gremlinzzzz wrote:
morrisond wrote:
I think you mixed the A330 and A350 up - A350's are a lot more expensive.

My main point is Airlines won't be able to afford new Large?expensive Widebodies - they won't take the risk for some time and I'll be surprised by any significant orders for some time for A350/777X.

Airlines if they do need new Capacity will be ordering the smallest/least expensive planes that can do the Job - 787/A330. There are tons of low hour 777W and A350 around for the bleeding edge use cases.

I agree with Lightsaber though about 739ER - that's a real no- brainer and applying the same mods to the 738 could be very interesting as well. Smallest aircraft to do the job. - Can't fill an A321 XLR - 739ER MAX then there is the 738ER which might be quite competitive with A321 XLR at least in range.
A330Neo - Cheaper, less orders.
A350 - More expensive, vastly more orders.

Cost has not been a deciding factor between these two types.

Airlines will not be replacing wide bodies with narrow body aircraft. Come on now. Business decisions are not being made on a whim because once in a lifetime pandemic happened. In three or so years, we will be back to where we were, and growing traffic once more if there is no other pandemic, or financial fallout. This pandemic will similarly be the end of some airlines that were not doing great, and airlines by and large will altogether shrink to try and survive.

What they will not do, is take a new narrow body frame for 12 years to replace a wide body jet. There are routes with good enough business traffic, the need to transport cargo, and are trunk routes even in a regional sense.

Airlines, are also not in the position to be taking in new planes. Have you seen how many are looking for deferrals, and how many are looking to talk to OEM's about cancelling orders or reducing some? It is not a wide body issue in isolation.

I think the narrowbody will take more of the mid-haul markets, such as near TATL. The advantage is a narrowbody on 4000nm still air mission is quite efficient on an 800nm still aur mission and anything in between. Widebodies within the US are now repositioning flights that double for cargo and premium.

I see a shift. I see when DUB opens the 2nd runway that they (DUB), MAN, BOS, CLT, and PHL will use smaller gauge aircraft to expand. JetBlue will enter TATL sans widebodies.

I've sat through meetings where AA was trying to convince airframers and engine makers to make a far more efficient narrowbody and why a small improvement in narrowbody economics opens far more P2P markets.

Either way, there is a surplus of both. It will be easier to restart markets with cargo at first, but as my kink above noted, cargo was over-served in 2019. The NMA was cargo light as before Covid19, saving cost per flight was more important than cargo.

I think widebodies won't recover until 2025 while narrowbodies will by 2023. Between now and then, both are in surplus (hence why Boeing is selling -8 MAX for less than the 737NG version to move them).

For now, let us see how Airbus and Boeing playing chicken with high narrowbody deliveries effects the entire market.

Lightsaber
3 months without TV. The best decision of my life.
 
User avatar
lightsaber
Moderator
Topic Author
Posts: 21175
Joined: Wed Jan 19, 2005 10:55 pm

Re: The case for more aircraft production cuts/playing chicken

Fri Jan 01, 2021 7:33 pm

morrisond wrote:
Gremlinzzzz wrote:
morrisond wrote:

In an ERA of probable continued high on-line ordering and the US abandoning America First meaning continuing production of goods in low cost labour areas - the ability to carry cargo will continue to get even more attention from Airlines to pad weak customer demand.

The achilles heel of NB's flying longer range is the inability to carry basically any cargo. In reality an A321NEOXLR is not an 5,000 NM aircraft - but more like 3,700-4,000 with 180ish Passengers in real conditions with long range baggage and no cargo.

Widebodies will have a place but it won't be the A350/777X sized ones - A330 NEO will probably survive and lots more inexpensive 787 coming off the lines with the 787 probably due for a PIP sooner than any of the above driving economics and sales. Consolidation of 787 production in one site will also help profitability.

Cost per frame to do the job will be the name of the game new vs used. A350 and 777X will not win this battle - both are way too expensive.

That being said - given the existing widebody glut - its hard to see much more than 15ish or so 330/787 coming off the lines per month for the foreseeable future.
If cost was the main issue, you would not see airlines ordering more A330 than A350. Airlines and lessors wanted a clean sheet wide body aircraft from Airbus, got one, and then proceeded to order them in huge numbers. Those that want a smaller wide body can get the A330NEO; this is what Delta is doing. Those that want more range, more capacity and cargo ability, go for the A350-900, while those that want more capacity (and they are there) will get the A350-1000.

The airlines that operate trunk routes and more so slot constrained trunk routes will go for the A350/777X to replace some 777/A380. Demand for aviation may be down for a few years, but once the hard times are done, demand will reach where it was, and then grow. As is the case with every business, airlines will want the most efficient aircraft types to better compete, and those just happen to be the 787, A330NEO, A350, and for those that can make it work, the 777X.


I think you mixed the A330 and A350 up - A350's are a lot more expensive.

My main point is Airlines won't be able to afford new Large?expensive Widebodies - they won't take the risk for some time and I'll be surprised by any significant orders for some time for A350/777X.

Airlines if they do need new Capacity will be ordering the smallest/least expensive planes that can do the Job - 787/A330. There are tons of low hour 777W and A350 around for the bleeding edge use cases.

I agree with Lightsaber though about 739ER - that's a real no- brainer and applying the same mods to the 738 could be very interesting as well. Smallest aircraft to do the job. - Can't fill an A321 XLR - 739ER MAX then there is the 738ER which might be quite competitive with A321 XLR at least in range.

While I agree with your ligic on an -8ER and ut should happen just for the *incredible* short field performance it opens up, I think Airbus will counter with an A220 MTOW increase and centerline tanks to take the low end of the market.

So just as the A320CEO and 737NG rewrote the TCON flight map, I think long range narrowbodies will rewrite the up to 4500nm market. Not all if the market, but enough.

Metropolitan areas with insufficient capacity to expand will lose out. Those with demand and expansion capacity will benefit. There will be a transition period and naturally airlines stuck with too many widebodies will do whatever they can to maintain profitable market share.

If there is a -9 ER, I expect FR, UA, and possibly KLM to buy in. B6 will stay Airbus and I would think LH too. IAG and DL are in play (hence why Boeing must develop the -9 ER).

There needs to be a new large narrowbody/small widebody for many markets.

This will hurt the widebody market. It won't go away, but increasing the viable range circle of narrowbodies will create markets for them.

The debate is the recovery curve for widebodies. With so many cities wanting to grow their connections, I see high demand.

Lightsaber
3 months without TV. The best decision of my life.
 
Gremlinzzzz
Posts: 144
Joined: Fri Jan 24, 2020 4:28 am

Re: The case for more aircraft production cuts/playing chicken

Fri Jan 01, 2021 7:53 pm

lightsaber wrote:
I think the narrowbody will take more of the mid-haul markets, such as near TATL. The advantage is a narrowbody on 4000nm still air mission is quite efficient on an 800nm still aur mission and anything in between. Widebodies within the US are now repositioning flights that double for cargo and premium.

I see a shift. I see when DUB opens the 2nd runway that they (DUB), MAN, BOS, CLT, and PHL will use smaller gauge aircraft to expand. JetBlue will enter TATL sans widebodies.

I've sat through meetings where AA was trying to convince airframers and engine makers to make a far more efficient narrowbody and why a small improvement in narrowbody economics opens far more P2P markets.

Either way, there is a surplus of both. It will be easier to restart markets with cargo at first, but as my kink above noted, cargo was over-served in 2019. The NMA was cargo light as before Covid19, saving cost per flight was more important than cargo.

I think widebodies won't recover until 2025 while narrowbodies will by 2023. Between now and then, both are in surplus (hence why Boeing is selling -8 MAX for less than the 737NG version to move them).

For now, let us see how Airbus and Boeing playing chicken with high narrowbody deliveries effects the entire market.

Lightsaber
There is no doubt that there will be airlines that start pushing new routes with the A321, but that is subject as to what makes certain routes work.

I am all for JetBlue, I think they offer a great product. That said, I think they are going to be a rather small player in those transatlantic routes, especially going up against not only United, AA, Delta, but their alliance partners. They have similarly made investments in trying to get business class travelers with Mint. I would love to see how these would scale against efficient wide bodies on the same routes.

I have also been of the opinion that the narrow body routes on long haul will be limited. If they become the norm, you are back to slot constrained airports and the only way to increase capacity is with wide body aircraft.

Over time, we are going to see more people flying, not less and this is something that will put even more pressure on existing airport infrastructure. Fuel efficient, long range narrow bodies will help establish some routes, but over time, there will be a need to increase capacity. Where slots become an issue, larger aircraft become the solution.
morrisond wrote:
What do you think I am blind? I've been more pessimistic than even Lightsaber in this thread.

A350 Offer date July 14, 2006
A330 NEO Offer Date July 14, 2014 - Of course it has fewer orders

This is all Pre-Covid as well.

BTW we are discussing what happens in the next few years and I was only pointing out that the only frames in the WB space that have the largest chance of new orders if needed are the A330NEO and 787 due to their low cost and availability of early slots. Do I expect the 330 to beat the 350 over the next 15 years of course not but that is not what we are discussing.

I suggest you look at how many SA were ordered to replace WB's pre-covid - TATL traffic could have a large share in SA by 2030.

It is a great thing that airlines make long term bets on what aircraft they acquire as opposed to reacting to what is a short term to medium term problem.

As for new wide body orders, price and slot availability currently do not matter. There is no demand for wide body aircraft except for a few routes, and even then, frequencies have been drastically reduced. Almost all airlines want to defer or cancel some orders for wide body frames because they are in survival mode in the short to medium term.
Some airlines have essentially retired some aircraft and then proceeded to cut some routes that were served by some wide bodies. Some will come back, some wont.

Once demand starts picking up, they will start increasing frequencies, start activating stored aircraft. If there is a need for new wide body jets, decisions like always will be made on demand, growth prospects, fleet commonality, range requirements etc.

Finally, look at most slot constrained airports, what do they have in common? They have huge narrow body flights eating up slots, and in the US, established airlines have been flying smaller jets into large airports as a way of limiting competition. In that they have succeeded.

Airlines that are down gauging to smaller jets from/to slot constrained airports are at a competitive disadvantage once traffic is on the up. Or they have to find a bigger jet to replace the narrow body while similarly finding a route for the smaller aircraft.
 
Speedy752
Posts: 41
Joined: Fri Dec 11, 2020 4:13 am

Re: The case for more aircraft production cuts/playing chicken

Fri Jan 01, 2021 8:05 pm

lightsaber wrote:
morrisond wrote:
Gremlinzzzz wrote:
If cost was the main issue, you would not see airlines ordering more A330 than A350. Airlines and lessors wanted a clean sheet wide body aircraft from Airbus, got one, and then proceeded to order them in huge numbers. Those that want a smaller wide body can get the A330NEO; this is what Delta is doing. Those that want more range, more capacity and cargo ability, go for the A350-900, while those that want more capacity (and they are there) will get the A350-1000.

The airlines that operate trunk routes and more so slot constrained trunk routes will go for the A350/777X to replace some 777/A380. Demand for aviation may be down for a few years, but once the hard times are done, demand will reach where it was, and then grow. As is the case with every business, airlines will want the most efficient aircraft types to better compete, and those just happen to be the 787, A330NEO, A350, and for those that can make it work, the 777X.


I think you mixed the A330 and A350 up - A350's are a lot more expensive.

My main point is Airlines won't be able to afford new Large?expensive Widebodies - they won't take the risk for some time and I'll be surprised by any significant orders for some time for A350/777X.

Airlines if they do need new Capacity will be ordering the smallest/least expensive planes that can do the Job - 787/A330. There are tons of low hour 777W and A350 around for the bleeding edge use cases.

I agree with Lightsaber though about 739ER - that's a real no- brainer and applying the same mods to the 738 could be very interesting as well. Smallest aircraft to do the job. - Can't fill an A321 XLR - 739ER MAX then there is the 738ER which might be quite competitive with A321 XLR at least in range.

While I agree with your ligic on an -8ER and ut should happen just for the *incredible* short field performance it opens up, I think Airbus will counter with an A220 MTOW increase and centerline tanks to take the low end of the market.

So just as the A320CEO and 737NG rewrote the TCON flight map, I think long range narrowbodies will rewrite the up to 4500nm market. Not all if the market, but enough.

Metropolitan areas with insufficient capacity to expand will lose out. Those with demand and expansion capacity will benefit. There will be a transition period and naturally airlines stuck with too many widebodies will do whatever they can to maintain profitable market share.

If there is a -9 ER, I expect FR, UA, and possibly KLM to buy in. B6 will stay Airbus and I would think LH too. IAG and DL are in play (hence why Boeing must develop the -9 ER).

There needs to be a new large narrowbody/small widebody for many markets.

This will hurt the widebody market. It won't go away, but increasing the viable range circle of narrowbodies will create markets for them.

The debate is the recovery curve for widebodies. With so many cities wanting to grow their connections, I see high demand.

Lightsaber


What would be the possibility of these NBs having optional tanks added later? Or would these need to be factory mods? I could see a case where airlines take NB now as normal range and adding fuel capacity later, or conversely being willing to order a LR/ER version if the tanks could be converted to cargo storage later once WB routes commended more capacity. -8/-9ER or 321XLR could be versatile that way, but not sure how “permanent” such a designation becomes
 
JayinKitsap
Posts: 2396
Joined: Sat Nov 26, 2005 9:55 am

Re: The case for more aircraft production cuts/playing chicken

Sat Jan 02, 2021 12:04 am

Speedy752 wrote:
What would be the possibility of these NBs having optional tanks added later? Or would these need to be factory mods? I could see a case where airlines take NB now as normal range and adding fuel capacity later, or conversely being willing to order a LR/ER version if the tanks could be converted to cargo storage later once WB routes commended more capacity. -8/-9ER or 321XLR could be versatile that way, but not sure how “permanent” such a designation becomes


Optional tanks use up more volume and have added weight for the amount of fuel stored when compared to built in tanks. The cheapest tanks use the wing skin & structure or the center wingbox as the tank walls - basically no cost, weight penalty, and maintenance to create the tank itself. 3 skid tanks taking the space of containers could be reduced to the size of two if permanent as it can fit in the space outside of the container. A skid tank weight is about 15% of its capacity in fuel, enough that it not often used. The 77L was designed to carry 6 tanks, maybe a dozen were ordered with the tanks.
 
User avatar
lightsaber
Moderator
Topic Author
Posts: 21175
Joined: Wed Jan 19, 2005 10:55 pm

Re: The case for more aircraft production cuts/playing chicken

Sat Jan 02, 2021 1:05 am

Speedy752 wrote:
lightsaber wrote:
morrisond wrote:

I think you mixed the A330 and A350 up - A350's are a lot more expensive.

My main point is Airlines won't be able to afford new Large?expensive Widebodies - they won't take the risk for some time and I'll be surprised by any significant orders for some time for A350/777X.

Airlines if they do need new Capacity will be ordering the smallest/least expensive planes that can do the Job - 787/A330. There are tons of low hour 777W and A350 around for the bleeding edge use cases.

I agree with Lightsaber though about 739ER - that's a real no- brainer and applying the same mods to the 738 could be very interesting as well. Smallest aircraft to do the job. - Can't fill an A321 XLR - 739ER MAX then there is the 738ER which might be quite competitive with A321 XLR at least in range.

While I agree with your ligic on an -8ER and ut should happen just for the *incredible* short field performance it opens up, I think Airbus will counter with an A220 MTOW increase and centerline tanks to take the low end of the market.

So just as the A320CEO and 737NG rewrote the TCON flight map, I think long range narrowbodies will rewrite the up to 4500nm market. Not all if the market, but enough.

Metropolitan areas with insufficient capacity to expand will lose out. Those with demand and expansion capacity will benefit. There will be a transition period and naturally airlines stuck with too many widebodies will do whatever they can to maintain profitable market share.

If there is a -9 ER, I expect FR, UA, and possibly KLM to buy in. B6 will stay Airbus and I would think LH too. IAG and DL are in play (hence why Boeing must develop the -9 ER).

There needs to be a new large narrowbody/small widebody for many markets.

This will hurt the widebody market. It won't go away, but increasing the viable range circle of narrowbodies will create markets for them.

The debate is the recovery curve for widebodies. With so many cities wanting to grow their connections, I see high demand.

Lightsaber


What would be the possibility of these NBs having optional tanks added later? Or would these need to be factory mods? I could see a case where airlines take NB now as normal range and adding fuel capacity later, or conversely being willing to order a LR/ER version if the tanks could be converted to cargo storage later once WB routes commended more capacity. -8/-9ER or 321XLR could be versatile that way, but not sure how “permanent” such a designation becomes

The added tanks need to have the avionics and plumbing to connect installed in the factory. It is very difficult to allow cargo hold tanks later on.

I agree with take a normal range with the requisite plumbing and avionics installed. The tanks are removable, so they can be purchased later. That is the advantage. Run them now TATL or other 4000nm length missions while demand is low. When demand recovers, reactivate widebodies (or buy new) and reposition them on shorter missions (or start new long-thin).

Now the A321xLR has a permanent large center tank. However, the weight penalty is minor. It is the premium Airbus is charging for a new build that is expensive. However, as time goes on, that premium will shrink and eventually, I speculate, that will become the default A321 model, just activate or don't activate the center tank for a fee to Airbus. They'll be fine on any A321 route.

That is the beauty of long haul narrowbodies, a simple cabin reconfiguration and they are the same as any other domestic narrowbody of the same size. So I think pretty much every airline will dable.

The argument against is always hub congestion. However, I think eventually either LTN or STN will gain a runway to add capacity for London (I would wish for LHR or LGW, but that is forever delayed). I see enough expansion that while some airports will be congested, I don't think enough to slow the market. There are relatively few truly congested airports in the world. P2P mid-haul narrowbodies offer opportunities for those that are expanding or those that are not congested yet: DTW, PHL, CLT, IAD, IAH (to South America only), DFW (assuming it builds another terminal), DEN, SLC (although the A321xLR's high wing loading is not going to work well at this airport), DUB (with the new runway and expansion), the new IST (not TATL, but to Africa and Asia). But at LHR, they fly A319s! Sheesh, replace those with A321s, free up slots and put more A321s TATL. Or replace them with -9 MAX ERs with some in a short haul configuration and some long haul. Either way, precious slots can be converted by up-gauging without involving a widebody. There are really only 5 cities with congested airports that couldn't accommodate expansion (SFO, LAX but that might be fixed with a new terminal, New York, and Chicago). Everything else is ripe for growth on this side. In Europe, LHR, AMS, and FRA are the impacted airports. Fine, bypass them to the secondary cities. Hub in DUB, PHL, CLT, or another airport with plenty of room to grow. (CLT can pretty much grow forever, so no danger of that one filling up). Most US airport congestion is RJs, so there is an easy swap out for a more profitable flight.

Hey, why should I list airports, Wikipedia has a list of airports under construction, all that is needed is the hub airports in the more congested areas to expand to accomodate. (e.g., early I proposed MUC to expand):
https://en.wikipedia.org/wiki/List_of_a ... nstruction

I missed CDG is expanding. I know they have land for more runways. If they need to be the hub for Europe, they'll be the hub for Europe. I also missed Prague is expanding, they are withing -9ER or A321xLR range of India! :hyper: Now there is an opportunity to grow quickly hubbing. Who will step up?


I watched TCON in the USA go from widebody to narrowbody over my flying lifetime. While I don't think the ranges we are talking about will go narrowbody as fast or as completely, I do think the majority of the passengers within the city pairs of the A321xLR will go to the longer range narrowbodies. For example, I fly LAX to TPA and other Florida destinations quite a bit. I haven't hubbed in years. The flights might be an A319/A320/A321 (I've flown them all) or a 738 and certainly a MAX.

But between now and this exciting opportunity, we need business travel to return. I'm looking for a way to meet demand and keep the projected narrowbody production rates from destabilizing the whole industry.

I predict when people realize how bad the Covid19 recession is going to be (e.g., Asia is in a recession, the first in a long time), I see infrastructure being the one sure cure to create jobs and boost the economy. Hopefully airports get their share.

But how to deal with the monster surplus of aircraft? I might be excited where the -8 and -9 MAX can fly and the opportunities opened up by what I see is about a thousand entering or re-entering the fleet by 2Q2022. But oh my is that going to do a number on the 738 and 73G pricing. The flood of A32xNEOs Airbus is delivering is going to absolutely tank the A32xCEO market. e.g., Indigo is pretty much going to return an A320CEO for every NEO they receive. SInce those are young aircraft, they will find a home. EasyJet is accepting NEOs too, but that will mean their heavily leased fleet, in particular the 104 A319s, needs a new home (probably will just tank the parts market for the CFM powered CEO, in my opinion, not even Allegiant wants A319s with used A320s so cheap). Wizz air is interesting, but I'm going to bet they will return as many CEOs as possible when Airbus keeps the contract for NEOs.

That tsunami of available CEOs and 737NGs will have some airlines delay buying new as per my previous like (I'll put it below), the resale pricing of used plunged (while new MAX dropped 20%):
https://leehamnews.com/2020/11/09/ponti ... ts-plunge/

A 15 year old A320(CEO naturally) went from $13 million to $10.45 million.
The same age 738 dropped from $15.5 mil to $11.6 pre-MAX RTS.
The A321 dropped from $18.9 to $14.5

But none of the above is the same aircraft. It is for a 15 year old aircraft. In 9 months the aircraft (if it sat) also lost value just because it aged (probably another $25,000 or so per month). :cry2:
Of the aircraft that trade hands, the vaunted 777-300ER lost 47% of value due to covid19. In other words, the same aircraft that was worth $46 million a year ago wouldn't even fetch half that today (again, that is the drop in value for a 15 year old aircraft plus the same aircraft is now 16 years old, further losing value). Note: I don't believe the A380 values as there is no resale value. That $37 million is a placeholder for an airline re-financing, not for a trade as exactly zero airlines buy used A380s now that HiFly returned their one example.

Even when vaccinated, I bet people will be spooked (just being isolated has made people weird...) about mass crowds.

Lightsaber
3 months without TV. The best decision of my life.
 
Capricorn
Posts: 163
Joined: Mon Jul 27, 2020 1:11 pm

Re: The case for more aircraft production cuts/playing chicken

Sat Jan 02, 2021 12:19 pm

Gremlinzzzz wrote:
lightsaber wrote:
I think the narrowbody will take more of the mid-haul markets, such as near TATL. The advantage is a narrowbody on 4000nm still air mission is quite efficient on an 800nm still aur mission and anything in between. Widebodies within the US are now repositioning flights that double for cargo and premium.

I see a shift. I see when DUB opens the 2nd runway that they (DUB), MAN, BOS, CLT, and PHL will use smaller gauge aircraft to expand. JetBlue will enter TATL sans widebodies.

I've sat through meetings where AA was trying to convince airframers and engine makers to make a far more efficient narrowbody and why a small improvement in narrowbody economics opens far more P2P markets.

Either way, there is a surplus of both. It will be easier to restart markets with cargo at first, but as my kink above noted, cargo was over-served in 2019. The NMA was cargo light as before Covid19, saving cost per flight was more important than cargo.

I think widebodies won't recover until 2025 while narrowbodies will by 2023. Between now and then, both are in surplus (hence why Boeing is selling -8 MAX for less than the 737NG version to move them).

For now, let us see how Airbus and Boeing playing chicken with high narrowbody deliveries effects the entire market.

Lightsaber
There is no doubt that there will be airlines that start pushing new routes with the A321, but that is subject as to what makes certain routes work.

I am all for JetBlue, I think they offer a great product. That said, I think they are going to be a rather small player in those transatlantic routes, especially going up against not only United, AA, Delta, but their alliance partners. They have similarly made investments in trying to get business class travelers with Mint. I would love to see how these would scale against efficient wide bodies on the same routes.

I have also been of the opinion that the narrow body routes on long haul will be limited. If they become the norm, you are back to slot constrained airports and the only way to increase capacity is with wide body aircraft.

Over time, we are going to see more people flying, not less and this is something that will put even more pressure on existing airport infrastructure. Fuel efficient, long range narrow bodies will help establish some routes, but over time, there will be a need to increase capacity. Where slots become an issue, larger aircraft become the solution.


IMO with the added benefits of long range NBs there is a large group of airlines where the added cost of adding a WB to the fleet does outweigh the added benefit and therefore these group of airlines will gladly rather go for long range NBs instead of WBs, even in a high demand scenario. I am specifically talking about: FR, U2, W6, AS, B6, WN, A3, BT, 7C, 9C, OK (probably LS) and these are the ones that I can remember just on the top of my head.

Airlines will equally be concerned with profitability in the post C19 world and often long range NBs are a conservative approach to expand yet consume less capital. Quite a few airlines will be concerned with overcapacity rather than undercapacity. Additionally some airlines need to downsize like AAX and will go from WBs to long range NBs. IMO the long range NB market is a way forward for both OEMs to sell and deliver more planes as the long range NB market is currently underserved. Of course WBs will never completely disappear, but long range NBs with better economics offer something to smaller airlines and LCCs that a WB can't offer.
 
morrisond
Posts: 3129
Joined: Thu Jan 07, 2010 12:22 am

Re: The case for more aircraft production cuts/playing chicken

Sat Jan 02, 2021 2:39 pm

Gremlinzzzz wrote:
morrisond wrote:
What do you think I am blind? I've been more pessimistic than even Lightsaber in this thread.

A350 Offer date July 14, 2006
A330 NEO Offer Date July 14, 2014 - Of course it has fewer orders

This is all Pre-Covid as well.

BTW we are discussing what happens in the next few years and I was only pointing out that the only frames in the WB space that have the largest chance of new orders if needed are the A330NEO and 787 due to their low cost and availability of early slots. Do I expect the 330 to beat the 350 over the next 15 years of course not but that is not what we are discussing.

I suggest you look at how many SA were ordered to replace WB's pre-covid - TATL traffic could have a large share in SA by 2030.

It is a great thing that airlines make long term bets on what aircraft they acquire as opposed to reacting to what is a short term to medium term problem.

As for new wide body orders, price and slot availability currently do not matter. There is no demand for wide body aircraft except for a few routes, and even then, frequencies have been drastically reduced. Almost all airlines want to defer or cancel some orders for wide body frames because they are in survival mode in the short to medium term.
Some airlines have essentially retired some aircraft and then proceeded to cut some routes that were served by some wide bodies. Some will come back, some wont.

Once demand starts picking up, they will start increasing frequencies, start activating stored aircraft. If there is a need for new wide body jets, decisions like always will be made on demand, growth prospects, fleet commonality, range requirements etc.

Finally, look at most slot constrained airports, what do they have in common? They have huge narrow body flights eating up slots, and in the US, established airlines have been flying smaller jets into large airports as a way of limiting competition. In that they have succeeded.

Airlines that are down gauging to smaller jets from/to slot constrained airports are at a competitive disadvantage once traffic is on the up. Or they have to find a bigger jet to replace the narrow body while similarly finding a route for the smaller aircraft.


Did I say airlines would be ordering hundred's of new wide bodies? No I said "the only frames in the WB space that have the largest chance of new orders if needed are the A330NEO and 787 due to their low cost and availability of early slots". Many airlines have one of the two in the fleet - if needed this is where they are most likely to add capacity. In general they have the range to cover the vast majority of routes with the smallest capacity, very good efficiency and low capital outlay.

You also ignored the part where I pointed out that the A350 has of course been for sale for more than double the time of the A330NEO and also that your original assertion that SA won't replace WB's has already proven to be incorrect as evidenced by recent A321XLR sales history and use of SA's on TATL routes.

All that being said and now that I start thinking about it and looking at existing fleets there is potential for the ordering of many WB's in the next few years as demand recovers - but I don't think it will be 350/77X.

Many Airlines are gone (meaning that capacity is permanently removed and needs to be replaced by the remaining competitors) and many fleets will/are being retired (777's pre 77W and also many of the 77W and L's that were leased), 767's, 757's, 340's, 747's, A lot of the A380's, and many of the early 330's as they are uneconomic to operate in this day and age due to overhaul or on a pure efficiency basis. They will never return to the skies as low interest rates make it is uneconomical to do so. A ton of WB lift has been permanently retired or is about to be. When demand does come back to say 85-90% or they can project that executives will see there is not enough lift and start to panic. A lot more than 10-15% of WB lift will never fly again. The missing lift will not all come out of the desert.

For example - United Airlines currently has 189 Older Wide Body and long range SA (757) in the fleet. The 61 757's are being replaced by 50 A321XLR's, leaving 128 767 and 777-200/200ER of which the vast majority could never fly again.

United's total Wide Body fleet is those 128 older ones, plus 60 787's and 22 newer 777W's. That puts them only about 40% of pre-covid frames if all the old ones are retired. They have a total 4 more 787's on order with 45 350's deferred to 2027 and a lot of speculation they will never take the A350 as they are too expensive and not needed for United's route network.

When demand does recover even to 75% of Pre-Covid - where will they get lift? Even if some of the 767/777 fleet does return - they are getting quite up there in age - it may not make sense to make the necessary investment to return them to the skies.

Looking at there other fleet types that leaves them with adding more 77W - which probably does not make sense unless they go used which is possible or ordering a bunch more 787. You could see them convert 350 to 330 and take those but that is adding another fleet type.

Just as we have seen in a few instances in the SA space I'm sure there will be some great deals made at very low prices to rebuild fleets and the offers A& B I'm sure are making right now and will continue to make until they get WB volumes up again will be hard to pass up.

It would be interesting to do a Worldwide fleet analysis of WB's and see what percentage of seats are likely not to return. British Airways would also be another great example to look at with all the 747's retired and the amount of 777-200's they have.
Last edited by morrisond on Sat Jan 02, 2021 3:06 pm, edited 1 time in total.
 
Gremlinzzzz
Posts: 144
Joined: Fri Jan 24, 2020 4:28 am

Re: The case for more aircraft production cuts/playing chicken

Sat Jan 02, 2021 2:51 pm

Capricorn wrote:
IMO with the added benefits of long range NBs there is a large group of airlines where the added cost of adding a WB to the fleet does outweigh the added benefit and therefore these group of airlines will gladly rather go for long range NBs instead of WBs, even in a high demand scenario. I am specifically talking about: FR, U2, W6, AS, B6, WN, A3, BT, 7C, 9C, OK (probably LS) and these are the ones that I can remember just on the top of my head.

Airlines will equally be concerned with profitability in the post C19 world and often long range NBs are a conservative approach to expand yet consume less capital. Quite a few airlines will be concerned with overcapacity rather than undercapacity. Additionally some airlines need to downsize like AAX and will go from WBs to long range NBs. IMO the long range NB market is a way forward for both OEMs to sell and deliver more planes as the long range NB market is currently underserved. Of course WBs will never completely disappear, but long range NBs with better economics offer something to smaller airlines and LCCs that a WB can't offer.
1. What matters at the end of the day is CASM. You will lose some of that the moment you start going longer distances because:
a) You need to carry more fuel, which makes the aircraft heavier, thereby consuming more fuel.
b) On long range flights, fuel consumption becomes a vastly greater percentage of the overall cost. On short hops, and regional routes, low works really well; with more seats, and operating from smaller airports to other smaller airports, the cost to operate means they can compete against established players and force them to adapt to your strategy. The longer you fly, the more advantages you lose.

2. I think that routes airlines choose to fly these on will matter. If you are going to a market that does not have any/much competition, then these will have a chance. However, if you want to fly a 150 seat A321 with 16J seats like B6 plans to, then you become an insignificant part of the market. Over time, that smaller frame that was conservative and made money during the lean times becomes an issue. Airlines would rather have a bit more capacity than they need as opposed to playing it safe and having way too little of it when market conditions get back to normal. You are not investing on a frame for three or four years, you are getting one as a long term play with a lot of research done.

3. If you move from the A350, 787, 777, you would need to replace with at the very least two long range narrow bodies, while kissing goodbye to cargo (significant revenue). You lose capacity, and because you fly fewer people than a single class LCC, you lose out on CASM. It sounds great in theory, but the practical application might be an issue.

We also get back to the problem that currently exists i.e. airport capacity. If we move to long haul NB's, you pretty much end up with the same problem we now have i.e. NB's eating much of the slots at airports. You then need........larger aircraft. Airlines that do not need capacity will ground bigger jets, fly fewer frequencies as opposed to getting rid and replacing with NB's. You dont make long term decisions based on medium term problems.

4. There are different market needs for different aircraft and different market segments and strategies that make money. We could have a narrow body aircraft that can get from the US West Coast to Australia, an airline that can go from the East Coast all the way East Africa and the gulf, West Coast US/Canada to South East Asia, an aircraft that can make the hop from ATL or DFW to South Africa and it (this NB) would be annihilated on those routes.

There is no magic aircraft that suits all market needs or most of it. That said, some larger airlines could use some smaller long range aircraft for specific missions that are long and extremely thin to justify a wide body.
 
morrisond
Posts: 3129
Joined: Thu Jan 07, 2010 12:22 am

Re: The case for more aircraft production cuts/playing chicken

Sat Jan 02, 2021 3:05 pm

Here is a good sample of some the Capacity that has been permanently removed this year.

https://www.flightglobal.com/fleets/whi ... 68.article
 
morrisond
Posts: 3129
Joined: Thu Jan 07, 2010 12:22 am

Re: The case for more aircraft production cuts/playing chicken

Sat Jan 02, 2021 3:16 pm

Gremlinzzzz wrote:
Capricorn wrote:
IMO with the added benefits of long range NBs there is a large group of airlines where the added cost of adding a WB to the fleet does outweigh the added benefit and therefore these group of airlines will gladly rather go for long range NBs instead of WBs, even in a high demand scenario. I am specifically talking about: FR, U2, W6, AS, B6, WN, A3, BT, 7C, 9C, OK (probably LS) and these are the ones that I can remember just on the top of my head.

Airlines will equally be concerned with profitability in the post C19 world and often long range NBs are a conservative approach to expand yet consume less capital. Quite a few airlines will be concerned with overcapacity rather than undercapacity. Additionally some airlines need to downsize like AAX and will go from WBs to long range NBs. IMO the long range NB market is a way forward for both OEMs to sell and deliver more planes as the long range NB market is currently underserved. Of course WBs will never completely disappear, but long range NBs with better economics offer something to smaller airlines and LCCs that a WB can't offer.
1. What matters at the end of the day is CASM. You will lose some of that the moment you start going longer distances because:
a) You need to carry more fuel, which makes the aircraft heavier, thereby consuming more fuel.
b) On long range flights, fuel consumption becomes a vastly greater percentage of the overall cost. On short hops, and regional routes, low works really well; with more seats, and operating from smaller airports to other smaller airports, the cost to operate means they can compete against established players and force them to adapt to your strategy. The longer you fly, the more advantages you lose.

2. I think that routes airlines choose to fly these on will matter. If you are going to a market that does not have any/much competition, then these will have a chance. However, if you want to fly a 150 seat A321 with 16J seats like B6 plans to, then you become an insignificant part of the market. Over time, that smaller frame that was conservative and made money during the lean times becomes an issue. Airlines would rather have a bit more capacity than they need as opposed to playing it safe and having way too little of it when market conditions get back to normal. You are not investing on a frame for three or four years, you are getting one as a long term play with a lot of research done.

3. If you move from the A350, 787, 777, you would need to replace with at the very least two long range narrow bodies, while kissing goodbye to cargo (significant revenue). You lose capacity, and because you fly fewer people than a single class LCC, you lose out on CASM. It sounds great in theory, but the practical application might be an issue.

We also get back to the problem that currently exists i.e. airport capacity. If we move to long haul NB's, you pretty much end up with the same problem we now have i.e. NB's eating much of the slots at airports. You then need........larger aircraft. Airlines that do not need capacity will ground bigger jets, fly fewer frequencies as opposed to getting rid and replacing with NB's. You dont make long term decisions based on medium term problems.

4. There are different market needs for different aircraft and different market segments and strategies that make money. We could have a narrow body aircraft that can get from the US West Coast to Australia, an airline that can go from the East Coast all the way East Africa and the gulf, West Coast US/Canada to South East Asia, an aircraft that can make the hop from ATL or DFW to South Africa and it (this NB) would be annihilated on those routes.

There is no magic aircraft that suits all market needs or most of it. That said, some larger airlines could use some smaller long range aircraft for specific missions that are long and extremely thin to justify a wide body.



You are right about slots potentially being an issue - but that was pre-covid mainly in the US where most of the flying was already SA. With the probable reduction in Business flying - slots shouldn't be a problem for some time.

With a shift to more Y/leisure seats and reduction in frequencies 9leisure isn't as sensitive to frequency) that is where WB's can start to win again due to CASM and longer average ranges (for Leisure flying).

It's hard to envision LHR with a large proportion of SA operations. Already going from A380/747 operations to smaller wide bodies will take a lot of seats off those routes, although I suspect that will be the main destination for many of the remaining A380's. It will become greatly dominated by 77W - even more so than now, and A350, 787, 777X. Which when demand does recover will require more slots than previously as by that time 4 holers should be dead - but the 3rd runway may finally be available.
 
Gremlinzzzz
Posts: 144
Joined: Fri Jan 24, 2020 4:28 am

Re: The case for more aircraft production cuts/playing chicken

Sat Jan 02, 2021 3:34 pm

morrisond wrote:
Did I say airlines would be ordering hundred's of new wide bodies? No I said "the only frames in the WB space that have the largest chance of new orders if needed are the A330NEO and 787 due to their low cost and availability of early slots". Many airlines have one of the two in the fleet - if needed this is where they are most likely to add capacity. In general they have the range to cover the vast majority of routes with the smallest capacity, very good efficiency and low capital outlay.

You also ignored the part where I pointed out that the A350 has of course been for sale for more than double the time of the A330NEO and also that your original assertion that SA won't replace WB's has already proven to be incorrect as evidenced by recent A321XLR sales history and use of SA's on TATL routes.

All that being said and now that I start thinking about it and looking at existing fleets there is potential for the ordering of many WB's in the next few years as demand recovers - but I don't think it will be 350/77X.

Many Airlines are gone (meaning that capacity is permanently removed and needs to be replaced by the remaining competitors) and many fleets will/are being retired (777's pre 77W and also many of the 77W and L's that were leased), 767's, 757's, 340's, 747's, A lot of the A380's, and many of the early 330's as they are uneconomic to operate in this day and age due to overhaul or on a pure efficiency basis. They will never return to the skies as low interest rates make it is uneconomical to do so. A ton of WB lift has been permanently retired or is about to be. When demand does come back to say 85-90% or they can project that executives will see there is not enough lift and start to panic. A lot more than 10-15% of WB lift will never fly again. The missing lift will not all come out of the desert.

For example - United Airlines currently has 189 Older Wide Body and long range SA (757) in the fleet. The 61 757's are being replaced by 50 A321XLR's, leaving 128 767 and 777-200/200ER of which the vast majority could never fly again.

United's total Wide Body fleet is those 128 older ones, plus 60 787's and 22 newer 777W's. That puts them only about 40% of pre-covid frames if all the old ones are retired. They have a total 4 more 787's on order with 45 350's deferred to 2027 and a lot of speculation they will never take the A350 as they are too expensive and not needed for United's route network.

When demand does recover even to 75% of Pre-Covid - where will they get lift? Even if some of the 767/777 fleet does return - they are getting quite up there in age - it may not make sense to make the necessary investment to return them to the skies.

Looking at there other fleet types that leaves them with adding more 77W - which probably does not make sense unless they go used which is possible or ordering a bunch more 787. You could see them convert 350 to 330 and take those but that is adding another fleet type.

Just as we have seen in a few instances in the SA space I'm sure there will be some great deals made at very low prices to rebuild fleets and the offers A& B I'm sure are making right now and will continue to make until they get WB volumes up again will be hard to pass up.

It would be interesting to do a Worldwide fleet analysis of WB's and see what percentage of seats are likely not to return. British Airways would also be another great example to look at with all the 747's retired and the amount of 777-200's they have.

1. Airlines and lessors wanted an A350 instead of the A330Neo. If they desired the A330Neo, we would have seen the original Airbus idea come to fruition where they wanted to re-engine the jet. It was the market that demanded a clean sheet replacement. Those that desire the A350 have their orders, and those that desire the A330 have their orders.

Had Airbus not so stupidly invested cash on the A380, and instead built up the A350 at a similar time when Boeing was building the 787, they would have more market share and enough money/time to get the A330Neo sales going. The A330Neo is slave to decisions Airbus took two decades ago.

2. It does not matter where production slot availability exists. Long haul travel is not coming back to the degree it was at until we have vaccinations worldwide. In the absence of that, where is the business case for new aircraft? Airlines wanted aircraft at record rates, now everyone is looking to defer or cancel to save on cash burn.

3. United replaced the 757's with the A321. The plan was to replace the 767 with the Boeing NMA, and the 777-200's with the A350.

The Chicago-based carrier announced a firm order for 50 A321XLRs with deliveries from 2024 aimed at replacing its 757-200 fleet about one-for-one, United commercial chief Andrew Nocella told reporters Tuesday. The aircraft, which will seat around 170 passengers and have a lie-flat Polaris business class cabin, are expected to enter service in 2025.

United has also deferred its first Airbus A350-900 delivery by five years to 2027 as part of the XLR deal, said Nocella. The aircraft will be used to replace Boeing 777-200s in its wide-body fleet.

“The order for the XLR does not mean we’ve shut the door on ordering the NMA in the future. Once Boeing further refines the mission capabilities and details of the NMA, we will actually take a close look at that,” he said. Boeing has said the NMA will seat 200-270 passengers with a range of about 5,750 miles.

However, Nocella specified that if Boeing launches the NMA, United will consider it to replace 767s — not 757s.''


United was not in a rush to replace the aging 767 or 777. If I had to guess, I think they go back to Boeing.
 
User avatar
lightsaber
Moderator
Topic Author
Posts: 21175
Joined: Wed Jan 19, 2005 10:55 pm

Re: The case for more aircraft production cuts/playing chicken

Sat Jan 02, 2021 3:38 pm

While the side discussion is facinating, please tie into the current production rates. Are the aircraft makers playing chicken or should they go back to full production?

morrisond wrote:
Here is a good sample of some the Capacity that has been permanently removed this year.

https://www.flightglobal.com/fleets/whi ... 68.article

Please post a summary as flightglobal blocks non-members.

FWIW, you being more pessimistic than I is scary. I believe we both see a recovery, it is the intermittent years that will be tough.

Lightsaber
3 months without TV. The best decision of my life.
 
morrisond
Posts: 3129
Joined: Thu Jan 07, 2010 12:22 am

Re: The case for more aircraft production cuts/playing chicken

Sat Jan 02, 2021 5:36 pm

Gremlinzzzz wrote:
morrisond wrote:
Did I say airlines would be ordering hundred's of new wide bodies? No I said "the only frames in the WB space that have the largest chance of new orders if needed are the A330NEO and 787 due to their low cost and availability of early slots". Many airlines have one of the two in the fleet - if needed this is where they are most likely to add capacity. In general they have the range to cover the vast majority of routes with the smallest capacity, very good efficiency and low capital outlay.

You also ignored the part where I pointed out that the A350 has of course been for sale for more than double the time of the A330NEO and also that your original assertion that SA won't replace WB's has already proven to be incorrect as evidenced by recent A321XLR sales history and use of SA's on TATL routes.

All that being said and now that I start thinking about it and looking at existing fleets there is potential for the ordering of many WB's in the next few years as demand recovers - but I don't think it will be 350/77X.

Many Airlines are gone (meaning that capacity is permanently removed and needs to be replaced by the remaining competitors) and many fleets will/are being retired (777's pre 77W and also many of the 77W and L's that were leased), 767's, 757's, 340's, 747's, A lot of the A380's, and many of the early 330's as they are uneconomic to operate in this day and age due to overhaul or on a pure efficiency basis. They will never return to the skies as low interest rates make it is uneconomical to do so. A ton of WB lift has been permanently retired or is about to be. When demand does come back to say 85-90% or they can project that executives will see there is not enough lift and start to panic. A lot more than 10-15% of WB lift will never fly again. The missing lift will not all come out of the desert.

For example - United Airlines currently has 189 Older Wide Body and long range SA (757) in the fleet. The 61 757's are being replaced by 50 A321XLR's, leaving 128 767 and 777-200/200ER of which the vast majority could never fly again.

United's total Wide Body fleet is those 128 older ones, plus 60 787's and 22 newer 777W's. That puts them only about 40% of pre-covid frames if all the old ones are retired. They have a total 4 more 787's on order with 45 350's deferred to 2027 and a lot of speculation they will never take the A350 as they are too expensive and not needed for United's route network.

When demand does recover even to 75% of Pre-Covid - where will they get lift? Even if some of the 767/777 fleet does return - they are getting quite up there in age - it may not make sense to make the necessary investment to return them to the skies.

Looking at there other fleet types that leaves them with adding more 77W - which probably does not make sense unless they go used which is possible or ordering a bunch more 787. You could see them convert 350 to 330 and take those but that is adding another fleet type.

Just as we have seen in a few instances in the SA space I'm sure there will be some great deals made at very low prices to rebuild fleets and the offers A& B I'm sure are making right now and will continue to make until they get WB volumes up again will be hard to pass up.

It would be interesting to do a Worldwide fleet analysis of WB's and see what percentage of seats are likely not to return. British Airways would also be another great example to look at with all the 747's retired and the amount of 777-200's they have.

1. Airlines and lessors wanted an A350 instead of the A330Neo. If they desired the A330Neo, we would have seen the original Airbus idea come to fruition where they wanted to re-engine the jet. It was the market that demanded a clean sheet replacement. Those that desire the A350 have their orders, and those that desire the A330 have their orders.

Had Airbus not so stupidly invested cash on the A380, and instead built up the A350 at a similar time when Boeing was building the 787, they would have more market share and enough money/time to get the A330Neo sales going. The A330Neo is slave to decisions Airbus took two decades ago.

2. It does not matter where production slot availability exists. Long haul travel is not coming back to the degree it was at until we have vaccinations worldwide. In the absence of that, where is the business case for new aircraft? Airlines wanted aircraft at record rates, now everyone is looking to defer or cancel to save on cash burn.

3. United replaced the 757's with the A321. The plan was to replace the 767 with the Boeing NMA, and the 777-200's with the A350.

The Chicago-based carrier announced a firm order for 50 A321XLRs with deliveries from 2024 aimed at replacing its 757-200 fleet about one-for-one, United commercial chief Andrew Nocella told reporters Tuesday. The aircraft, which will seat around 170 passengers and have a lie-flat Polaris business class cabin, are expected to enter service in 2025.

United has also deferred its first Airbus A350-900 delivery by five years to 2027 as part of the XLR deal, said Nocella. The aircraft will be used to replace Boeing 777-200s in its wide-body fleet.

“The order for the XLR does not mean we’ve shut the door on ordering the NMA in the future. Once Boeing further refines the mission capabilities and details of the NMA, we will actually take a close look at that,” he said. Boeing has said the NMA will seat 200-270 passengers with a range of about 5,750 miles.

However, Nocella specified that if Boeing launches the NMA, United will consider it to replace 767s — not 757s.''


United was not in a rush to replace the aging 767 or 777. If I had to guess, I think they go back to Boeing.


And again you are ignoring most of what I said and going to your own Agenda. If you are not going to respond to me - stop quoting me.

You are focusing on pre-covid quotes - not the new reality. If they make NMA it most likely will not arrive for a good 8-10 years at this point - well beyond 767 retirement.

One of the primary reasons the A350 did not sell as well as the 787 and hasn't for years now is due to its high price. It's exceptional in terms of performance but if you can get two 330 NEO's for the price of an 350 - why not if don't need the range? (I'm exaggerating to make a point but I doubt I'm that far off).

Where did I say Long haul travel is coming back to same degree as before? My point is that there may have been too many retirements for even 75-80% of the previous traffic. That will drive demand over the next 2-3 years I never said pre-vacine.

I mentioned up above that the 757's are being replaced by XLR's and that 350's are deferred to 2027. I doubt they will ever take though as 787 probably makes more sense for the fleet.
 
Sokes
Posts: 2551
Joined: Sat Mar 09, 2019 4:48 pm

Re: The case for more aircraft production cuts/playing chicken

Sat Jan 02, 2021 6:05 pm

morrisond wrote:
Many Airlines are gone (meaning that capacity is permanently removed and needs to be replaced by the remaining competitors) and many fleets will/are being retired (777's pre 77W and also many of the 77W and L's that were leased), 767's, 757's, 340's, 747's, A lot of the A380's, and many of the early 330's as they are uneconomic to operate in this day and age due to overhaul or on a pure efficiency basis. They will never return to the skies as low interest rates make it is uneconomical to do so. A ton of WB lift has been permanently retired or is about to be. When demand does come back to say 85-90% or they can project that executives will see there is not enough lift and start to panic. A lot more than 10-15% of WB lift will never fly again. The missing lift will not all come out of the desert.

I don't belong to the people who think that narrowbodies can replace widebodies. Even though it's obvious that strongly increased narrowbody capability will cause some widebodies to be replaced by narrowbodies.

The B777-300ER entered service in 2004. Discussions that many of them will be retired are odd, unless we speak about early frames which are somehow not standard.

IIRC two or three years back I estimated that replacing all B747-400, all A340, all B777 beside -300ER, all low MTOW A330-300 and all B767 would require around three years of widebody production.
Since the US has old fleets, retiring these types sounds dramatic. On a global scale it isn't.
Why can't the world be a little bit more autistic?
 
User avatar
lightsaber
Moderator
Topic Author
Posts: 21175
Joined: Wed Jan 19, 2005 10:55 pm

Re: The case for more aircraft production cuts/playing chicken

Sat Jan 02, 2021 6:20 pm

I like talking to numbers and uncertainty ranges as that gives us a groundwork.

The IATA predicts international air travel will be back in 2024:
https://www.cnn.com/travel/article/air- ... index.html

The revised baseline forecast is that international passenger traffic will drop 55% in 2020, compared to 2019. Back in April, the IATA had predicted the drop to be just 46%.
Passenger numbers are expected to rise 62% next year, but will still be down almost 30% compared to pre-Covid times, with a full recovery to pre-pandemic levels not on the cards until four years from now.


I applaud IATA for detailed numbers, but I am more pessimistic. I predict 80% +/- 5% for international air travel for YE 2023. At that point, I expect air travel to grow at a 3% to 8% rate. This means, best case, YE2025 we are back to 2019 traffic, by my prediction. Worst case is we are at 80% of 2019 then.

I am much more upbeat on the narrowbody market. I think by YE 2023 we will be back at 2019 levels, again +/- 5%. In my opinion, anyone who doesn't predict a baseline, a low, and a high scenario isn't really planning.
.Now I am not predicting my worst case scenario as I think (hope?) the insane money printing stops before a loss in faith in current currency (unfortunately, we are approaching that if it keeps up, seriously, look at how much if the Euros and dollars out there were new for 2020, including digital money). We will see as that puts us into a decade+ depression which means no recovery with current aircraft.

I see us rationalizing, post vaccines, and restarting. Unfortunately, only the USA, Australia, and the UK bought enough vaccine to have a normal northern hemisphere summer 2021 travel season. Others will lag by only a few months, but missing the busy season is a huge economic handicap to travel recovery.

The EU only has 300 million doses on orders (oops) or 150 million people vaccinated:
https://www.msn.com/en-za/news/other/ge ... r-BB1cpZib

Yes, China has domestic travel, but something doesn't add up in their numbers, but that is for a different thread.

There will be a core flying in 2021. I believe Indigo when they expect their international travel at 2019 levels by YE 2021 (discussion in Indian aviation thread). I would bet a dirty martini that on New Year's Eve 2021, that the sum of UA, DL, EK, QR, EY, LH, BA, KL, and AF in/out of India is less than 2/3rds of 2019.

Unfortunately, interesting times ahead.

Lightsaber
3 months without TV. The best decision of my life.
 
Gremlinzzzz
Posts: 144
Joined: Fri Jan 24, 2020 4:28 am

Re: The case for more aircraft production cuts/playing chicken

Sat Jan 02, 2021 6:28 pm

morrisond wrote:
And again you are ignoring most of what I said and going to your own Agenda. If you are not going to respond to me - stop quoting me.
What agenda would that be? You seem to think that airlines will be making orders for the 787 or A330Neo because of the pandemic. I am of the opinion that it won't matter because airlines are trying to save cash.

And when they need aircraft, they can get some frames from lessors at a cheaper price as opposed to looking for financing. Narrow body routes will recover first, and those will be the first aircraft brought back.

[/quote]You are focusing on pre-covid quotes - not the new reality. If they make NMA it most likely will not arrive for a good 8-10 years at this point - well beyond 767 retirement.[/quote]The NMA is a Boeing issue. Where and when they offer it no one knows. I personally think they missed a trick and are off on market timing.

Get a 737 replacement that scales and be done with it. Anyone that needed a 767 replacement may as well get the 787-8 and have the range flexibility.

What do we do with pre covid quotes? Trash them?

morrisond wrote:
One of the primary reasons the A350 did not sell as well as the 787 and hasn't for years now is due to its high price. It's exceptional in terms of performance but if you can get two 330 NEO's for the price of an 350 - why not if don't need the range? (I'm exaggerating to make a point but I doubt I'm that far off).
You might need capacity.

We live in a finite market. Sometimes a company gets the jump and does extremely well. This was Boeing with the Dreamliner and it is Airbus with the A321LR/XLR. Apart from this, over half the frames delivered to airlines from this line (A330) are from 2010 going forward, how that plays into replacement cycles remains to be seen.

So, by the time Airbus gets the ultrafan, there is a possibility that from A330Neo and A350 lines, they could deliver anywhere from 1200 to 1300 aircraft. That is a monumental success when you consider the programs cost €13 billion combined. A company can be successful while still being second in a market segment, and so long as you are not below the 40% mark, an OEM is fine.

morrisond wrote:
Where did I say Long haul travel is coming back to same degree as before? My point is that there may have been too many retirements for even 75-80% of the previous traffic. That will drive demand over the next 2-3 years I never said pre-vacine.
There are retirements, and there airlines that will not make it back. Good frames at the right prices will find new homes. Some airlines may want new frames......normal aviation business.

morrisond wrote:
I mentioned up above that the 757's are being replaced by XLR's and that 350's are deferred to 2027. I doubt they will ever take though as 787 probably makes more sense for the fleet.
We are in agreement when it comes to this.
 
morrisond
Posts: 3129
Joined: Thu Jan 07, 2010 12:22 am

Re: The case for more aircraft production cuts/playing chicken

Sat Jan 02, 2021 7:08 pm

lightsaber wrote:
While the side discussion is facinating, please tie into the current production rates. Are the aircraft makers playing chicken or should they go back to full production?

morrisond wrote:
Here is a good sample of some the Capacity that has been permanently removed this year.

https://www.flightglobal.com/fleets/whi ... 68.article

Please post a summary as flightglobal blocks non-members.

FWIW, you being more pessimistic than I is scary. I believe we both see a recovery, it is the intermittent years that will be tough.

Lightsaber


I was more pessimistic than you I think back in the start of this and put the 787 at 5 - close enough to the current 6 and the A350 at 3, A330 at 2 - currently at 5 and 2.

It's actually quite easy to become a Flight Global member - no Money required. They don't really have a table either in that article that is easy to copy.

I don't think they should go back to full production however it may not be that long before they increase production again at least on 787/330 that is where I can see Airlines adding capacity.

Here is not a bad source for World Airline Fleets as of 2018/2019. I'll go through and take a very rough guess on what won't be returning.

https://en.wikipedia.org/wiki/List_of_jet_airliners

Airbus 340 was 159 - might be 20-30 in Private/governmental use - Assume 300 Seats x130 Commercial use frames - 40,000 Seats - now 0.
Airbus 330 was 1,265 - about 500 are pre 2005 - probably not coming back - 270 seats x 1,265 = 341,550 Seats - now 206,550
Airbus A380 was 250 - Lets be optimistic and call it 100 coming back. 250 X 500 Seats = 125,000 - now 50,000 Seats

Boeing 747 was 462 - No Passenger Models coming back other than the 748's - call it a loss of 430 x400 Seats = 172,000 now 30ish? X 400 = 12,000 - that seems like a lot of 747 Passenger models still flying then but the list says no freighters

Boeing 767 was 742 x 240 Seats = 178,080 seats - now what 200? = 48,000 seats

Boeing 777 was 1,416 x 350 Seats = 495,600 - take out the 687 produced pre -2008 leaves you with 255,150.

Very - Very rough totals.

Pre-Covid about 1,352,150 seats available on Widebody Aircraft. Now about 571,700 - a reduction of about 58%.

Then of course you have the 350 and 787 fleets which are about 300,000 seats - so call it reduction of about 47% in Widebody seats.

Thats a lot and of course very - very rough. Demand for new frames should return sooner rather than later once demand exceeds 50% of the old number.

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