SteelChair wrote:I continue to fail to see why any responsible company would pay for new A350s when hundreds of A330s and 777s are available for conversion at probably 1/4th the price per plane. The fuel savings will never come close to making up the difference
available life in the airframe, lower fuel burn, long term availability of maintenance expertise and systems, environmental constraints. If you buy a second hand jet and convert you have to amortise not only the cost of the airframe but also the conversion over a shorter expected life.
Why were 787s being sold when 777 were going to scrappers? Why would anyone pay for any new jets when old ones are always going to the scrappers?
SteelChair wrote:scbriml wrote:SteelChair wrote:I continue to fail to see why any responsible company would pay for new A350s when hundreds of A330s and 777s are available for conversion at probably 1/4th the price per plane. The fuel savings will never come close to making up the difference
Yet responsible companies are still buying new-build 777Fs - 38 so far this year. Are they mad?
Wiki shows 22 777F deliveries in 2020 (a massive year for air cargo given C19) and only 14 delivered this year. Given the booming demand, one would think that many more orders would have been forthcoming this year but that doesn't appear to have happened.
The 777 began production the early 90s, production costs are now well amortized. Only the 200 is available as a new build from Boeing, and the 772 is 10 feet shorter than an A359. We don't know prices, but isn't it safe to assume that the smaller, older, airplane would be much cheaper than a larger, newer, one? Not a single 300F has ever been offered or bought. Not a single 777X (a much more appropriate comparison to the A350) has been ordered. If Boeing as the established cargo builder can't sell 777XF's, what makes anyone think the cargo laggard Airbus can sell A350F's in any meaningful number?
Cargo laggard? Your choice of derogatory words betrays your intentions.
I would say there is a good chance Boeing could offer the 777F cheaper in the past but to assume is a very silly thing to do.
SteelChair wrote:
So no, I wouldn't say cargo carriers are "mad" to take a small number of smaller, cheaper, airplanes from a hot production line than the larger, newer, paper A350F in a time of unprecedented demand.
Hot production line? What rates is this hot production line going at? What’s the a350 at? And why is the fact that it’s larger a problem? The 77F is heavier, that’s a much more expensive operational problem.
SteelChair wrote:
My guess is that an A350 would be close to twice as expensive as a 777F.
Why would you assume half the price? Evidence of recent sales suggests the A35K sold for about 170m and the end of line77W for 100m. One of the limitations of the A35k is the relatively low volume production of the aircraft specific parts, the fact that the A35F shares many parts with the A35k would reduce the costs.
SteelChair wrote: The fuel savings would probably never come close to making up the price difference. Mho - my back of the napkin math shows that an A350F would save $3.5M* a year vis a vis a 777F.....chump change compared to an extra $100M purchase price. And you have to pay the extra price up front, the fuel savings take years to accumulate. Time value of money. Slam dunk to 777 or A330 cargo conversions going forward.
I don’t know, What’s the residual value of a150m A35F in 12 years vs a 100m ERSF in 12 years? The time value of time of course being that you have a jet with high fuel burn depreciating in value faster.
My calcs put it closer to 5m/yr difference 3800lbshr^-1
SteelChair wrote:
The cargo carriers seem much more disciplined than the passenger carriers with regard to aircraft purchases, much less susceptible to shiny jet syndrome.
*Math: ((3,000 lbs/hr x 4,000 hr)/yr/6.7) x $2/gal = $3.582M/yr
Shiny jet syndrome? Is the maths of increased utilisation favouring higher price and lower fuel burn (as demonstrated by passenger carrying operations as opposed to cargo) too hard to figure? It’s even evident in the LCC vs legacy business models. ‘Shiny jet sydrome’ = actually modelling DOCs
Fred
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