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SRQKEF
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Icelandair postpones widebody renewal, citing better than expected MAX performance

Thu Jan 20, 2022 11:35 pm

https://www.visir.is/g/20222211429d/god ... ari-thotum

This translates loosely to FI being so happy with the MAX fuel efficiency and increased range, leading to it operating routes such as KEF-SEA and MCO without penalties, that it has reduced the need for a direct 757 replacement.

Original plans to retire the 757 included a need for longer range aircraft alongside the 737MAX due to its perceived lack of range. However, the better than expected fuel performance has lead to it regularly operating routes to SEA, DEN, MCO and even PDX which means that the need for a new fleet going forward is less pressing than they anticipated. The long term fleet mix may include either the Airbus family or the 787 Dreamliner, especially due to its great cargo performance.

A recent deal for 2 additional MAX aircraft means the 737 fleet will be up to 14 aircraft this summer, along with 13 757s and 4 767s. At its peak the 757 fleet stood at almost thirty aircraft, but retirement is currently planned to be no later than 2026.
 
Opus99
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Re: Icelandair postpones widebody renewal, citing better than expected MAX performance

Thu Jan 20, 2022 11:38 pm

It’s nice to see someone is enjoying the range of the 737 MAX. Because something else flies longer doesn’t mean the max itself doesn’t have long legs
 
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OzarkD9S
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Re: Icelandair postpones widebody renewal, citing better than expected MAX performance

Thu Jan 20, 2022 11:42 pm

Great! Now c'mon get those KEF-STL flights 3 weekly when LH isn't flying to FRA.
 
Breathe
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Re: Icelandair postpones widebody renewal, citing better than expected MAX performance

Fri Jan 21, 2022 12:14 am

It makes a change to hear a good news story about the 737 MAX.
 
asuflyer
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Re: Icelandair postpones widebody renewal, citing better than expected MAX performance

Fri Jan 21, 2022 12:43 am

Icelandair did not previously expect to be able to use the 737MAX9 to SEA nor the 737MAX8 to MCO but it appears they can without issue. Infact post the grounding Icelandair has only ever praised the MAX. The first MAX8 is being painted into the new livery this week.
 
wedgetail737
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Re: Icelandair postpones widebody renewal, citing better than expected MAX performance

Fri Jan 21, 2022 12:52 am

FI flies both the MAX 9 and the MAX 8 to SEA.
 
jbs2886
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Re: Icelandair postpones widebody renewal, citing better than expected MAX performance

Fri Jan 21, 2022 12:59 am

asuflyer wrote:
Icelandair did not previously expect to be able to use the 737MAX9 to SEA nor the 737MAX8 to MCO but it appears they can without issue. Infact post the grounding Icelandair has only ever praised the MAX. The first MAX8 is being painted into the new livery this week.


There have been some reports (here) that the SEA flights have restrictions. So even if true, Icelandair must be OK with the restrictions. Personally I've been hoping for some 787s, but I fear they are just too big.
 
Runway765
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Re: Icelandair postpones widebody renewal, citing better than expected MAX performance

Fri Jan 21, 2022 1:00 am

With this news, I’d LOVE to see KEF-BNA launched. Seems like a low hanging fruit.
 
sfojvjets
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Re: Icelandair postpones widebody renewal, citing better than expected MAX performance

Fri Jan 21, 2022 1:20 am

Runway765 wrote:
With this news, I’d LOVE to see KEF-BNA launched. Seems like a low hanging fruit.

Sure would be interesting.

So much of IceAir's business is hauling cargo so I'd have to think they will get 787s down the line. IMO they should be looking out for older 787-8s; they do not need the capacity of the -9 and getting new -8s is not a solution since Boeing doesn't seem to want to sell them.

The A321LR/XLR is a very good option for them but if they can fly as far afield as SEA, PDX, and MCO without any current issues, then why even bother getting the LR/XLR?

Either way, they could not make farther destinations such as SFO work: Flying KEF-SFO required a 19-hr RON at SFO (arrive SFO ~6pm, depart 2pm) in order to sync up with the outgoing European banks which is costly and inefficient. So is there even a need to buy anything from the A321 family? The only advantage I see them having is increased capacity; IceAir doesn't seem to need the increased range.

787s will be great 767 replacements, the only thing is I wonder if a 321 order is even necessary at this point, if they are as pleased as they say with the MAX.
 
MIflyer12
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Re: Icelandair postpones widebody renewal, citing better than expected MAX performance

Fri Jan 21, 2022 1:22 am

SRQKEF wrote:
https://www.visir.is/g/20222211429d/god-utkoma-boeing-max-frestar-kaupum-a-langdraegari-thotum

This translates loosely to FI being so happy with the MAX fuel efficiency and increased range, leading to it operating routes such as KEF-SEA and MCO without penalties, that it has reduced the need for a direct 757 replacement.


It's not as if they're magically getting an extra 300nm of range. Do we see the dozens of other MAX operators scheduling well above claimed range?

I'm wearing my cynical hat, but this smells of recognizing they can't afford new aircraft and Corporate Communications trying to put a happy spin on that reality.
 
Opus99
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Re: Icelandair postpones widebody renewal, citing better than expected MAX performance

Fri Jan 21, 2022 1:25 am

MIflyer12 wrote:
SRQKEF wrote:
https://www.visir.is/g/20222211429d/god-utkoma-boeing-max-frestar-kaupum-a-langdraegari-thotum

This translates loosely to FI being so happy with the MAX fuel efficiency and increased range, leading to it operating routes such as KEF-SEA and MCO without penalties, that it has reduced the need for a direct 757 replacement.


It's not as if they're magically getting an extra 300nm of range. Do we see the dozens of other MAX operators scheduling well above claimed range?

I'm wearing my cynical hat, but this smells of recognizing they can't afford new aircraft and Corporate Communications trying to put a happy spin on that reality.

Kef-sea is 5800KM. advertised range on max 8 is 6500 KM

What is this 300NM extra range you speak of?
Last edited by Opus99 on Fri Jan 21, 2022 1:28 am, edited 1 time in total.
 
panam330
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Re: Icelandair postpones widebody renewal, citing better than expected MAX performance

Fri Jan 21, 2022 1:25 am

asuflyer wrote:
The first MAX8 is being painted into the new livery this week.

They can take as long as they'd like to paint them. :shakehead:

Glad like they're enjoying their Maxes though. It's a sharp looking aircraft despite its shortcomings vs 321neo, and clearly not everyone needs the latter.
 
sxf24
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Re: Icelandair postpones widebody renewal, citing better than expected MAX performance

Fri Jan 21, 2022 1:31 am

MIflyer12 wrote:
SRQKEF wrote:
https://www.visir.is/g/20222211429d/god-utkoma-boeing-max-frestar-kaupum-a-langdraegari-thotum

This translates loosely to FI being so happy with the MAX fuel efficiency and increased range, leading to it operating routes such as KEF-SEA and MCO without penalties, that it has reduced the need for a direct 757 replacement.


It's not as if they're magically getting an extra 300nm of range. Do we see the dozens of other MAX operators scheduling well above claimed range?

I'm wearing my cynical hat, but this smells of recognizing they can't afford new aircraft and Corporate Communications trying to put a happy spin on that reality.


They’re taking more MAX, so it’s clearly not the case that they can’t afford new airplanes.
 
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usxguy
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Re: Icelandair postpones widebody renewal, citing better than expected MAX performance

Fri Jan 21, 2022 1:52 am

who has the longest Max legs right now? I wasn't sure if Copa's PTY-SCL/EZE/LAX was at the top of the list or not...
 
MavyWavyATR
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Re: Icelandair postpones widebody renewal, citing better than expected MAX performance

Fri Jan 21, 2022 2:01 am

jbs2886 wrote:
asuflyer wrote:
Icelandair did not previously expect to be able to use the 737MAX9 to SEA nor the 737MAX8 to MCO but it appears they can without issue. Infact post the grounding Icelandair has only ever praised the MAX. The first MAX8 is being painted into the new livery this week.


There have been some reports (here) that the SEA flights have restrictions. So even if true, Icelandair must be OK with the restrictions. Personally I've been hoping for some 787s, but I fear they are just too big.


What's the furthest FI can go (on their route map) with their MAX fleet with a full load?
 
Cardude2
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Re: Icelandair postpones widebody renewal, citing better than expected MAX performance

Fri Jan 21, 2022 2:02 am

here's some other parts of that article translated:

"Bogi expects that in the second half of this decade, new machines will have to be introduced to finally replace the 757s. The company is still excited about Airbus jets of the 320 line, especially the A321 LR. Wide jets are also under consideration, including the Boeing 787 Dreamliner."

"Then there are 787 wide-body jets that are also possible, and are very suitable, for example, for cargo transport with passenger transport - it just works well in our models - and something that is an option next to it - what should we say - The Airbus family with us for a long time, "says the CEO of Icelandair.

https://www.visir.is/g/20222211429d/god ... ari-thotum
 
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ikolkyo
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Re: Icelandair postpones widebody renewal, citing better than expected MAX performance

Fri Jan 21, 2022 2:20 am

usxguy wrote:
who has the longest Max legs right now? I wasn't sure if Copa's PTY-SCL/EZE/LAX was at the top of the list or not...


Probably GOL with BSB-CUN. I'm not sure if BSB-MIA is making a return
 
Dreamflight767
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Re: Icelandair postpones widebody renewal, citing better than expected MAX performance

Fri Jan 21, 2022 3:31 am

I thought the issue with FI and the MAX was the limited cargo space of the 737. Didn't we always know it (the MAX) had the legs for their routes?
 
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ikolkyo
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Re: Icelandair postpones widebody renewal, citing better than expected MAX performance

Fri Jan 21, 2022 3:38 am

ikolkyo wrote:
usxguy wrote:
who has the longest Max legs right now? I wasn't sure if Copa's PTY-SCL/EZE/LAX was at the top of the list or not...


Probably GOL with BSB-CUN. I'm not sure if BSB-MIA is making a return

Little correction, It was actually BSB-MCO. There was also EZE-PUJ operated by AR.
 
PHLspecial
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Re: Icelandair postpones widebody renewal, citing better than expected MAX performance

Fri Jan 21, 2022 7:34 am

Dreamflight767 wrote:
I thought the issue with FI and the MAX was the limited cargo space of the 737. Didn't we always know it (the MAX) had the legs for their routes?

Agreed. I have a hard time believing that FI is carrying the same amount of cargo like a 757 to fly all the to Sea without restrictions. Like the A321 the 737Max can match some performance of the 757 but not all of it.
 
LCDFlight
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Re: Icelandair postpones widebody renewal, citing better than expected MAX performance

Fri Jan 21, 2022 9:06 am

I always say you can lose the least money by flying the cheapest aircraft it takes to cover your daily network. That is your decision baseline. Some "conventional wisdom" that you need widebodies is not the baseline. The baseline is the cheapest solution. People have this prejudice that larger airplanes are "cheaper" to run. That is false in COVID and actually has always been very false, with a kernel of truth sometimes.
 
Avgeek21
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Re: Icelandair postpones widebody renewal, citing better than expected MAX performance

Fri Jan 21, 2022 9:08 am

Can someone post the max cargo volume of the 752 vs the MAX 8/9? Just out of interest.

I’ve flown the MAX 8 on 5.5hr sectors with a full payload and 3.8 tonnes of cargo. Coincidentally fish. Lol.
 
Opus99
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Re: Icelandair postpones widebody renewal, citing better than expected MAX performance

Fri Jan 21, 2022 9:11 am

LCDFlight wrote:
I always say you can lose the least money by flying the cheapest aircraft it takes to cover your daily network. That is your decision baseline. Some "conventional wisdom" that you need widebodies is not the baseline. The baseline is the cheapest solution. People have this prejudice that larger airplanes are "cheaper" to run. That is false in COVID and actually has always been very false, with a kernel of truth sometimes.

Of course larger planes are not cheaper to run. But if you have the demand the money you make is much much much more; that’s the attraction to widebodies. Widebodies were once for range and market demand but as the narrows become more capable it’s really inching closer and closer into just market demand
 
LCDFlight
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Re: Icelandair postpones widebody renewal, citing better than expected MAX performance

Fri Jan 21, 2022 9:25 am

Opus99 wrote:
LCDFlight wrote:
I always say you can lose the least money by flying the cheapest aircraft it takes to cover your daily network. That is your decision baseline. Some "conventional wisdom" that you need widebodies is not the baseline. The baseline is the cheapest solution. People have this prejudice that larger airplanes are "cheaper" to run. That is false in COVID and actually has always been very false, with a kernel of truth sometimes.

Of course larger planes are not cheaper to run. But if you have the demand the money you make is much much much more; that’s the attraction to widebodies. Widebodies were once for range and market demand but as the narrows become more capable it’s really inching closer and closer into just market demand


But of course we notice OEMs talk endlessly about the "economies" and "efficiency" of large airplanes. Isn't a 737 Max or A321 NEO just as fuel efficient per seat?

On yields, bigger airplanes do not add high yield capacity. They only add low yield, more often empty capacity. The high yield can all be carried on the small airplane, so it is not part of the decision analysis.

Example, say 737-9 baseline capacity is say 90% load factor, which drops to say 75% on an A339. The load factor of the incremental is around 55%. With low yields. It is not always easy to make higher profit with that. Meanwhile, the costs of the A339 occur every day.

My point (which is qualitative, and applies loosely to what FI is doing here) is I just think people have this wrong notion that bigger airplanes make more money. Cape Air makes more profit than many wide body operators. Not profit margin... total profit. Just my 2c.
 
Opus99
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Re: Icelandair postpones widebody renewal, citing better than expected MAX performance

Fri Jan 21, 2022 9:36 am

LCDFlight wrote:
Opus99 wrote:
LCDFlight wrote:
I always say you can lose the least money by flying the cheapest aircraft it takes to cover your daily network. That is your decision baseline. Some "conventional wisdom" that you need widebodies is not the baseline. The baseline is the cheapest solution. People have this prejudice that larger airplanes are "cheaper" to run. That is false in COVID and actually has always been very false, with a kernel of truth sometimes.

Of course larger planes are not cheaper to run. But if you have the demand the money you make is much much much more; that’s the attraction to widebodies. Widebodies were once for range and market demand but as the narrows become more capable it’s really inching closer and closer into just market demand


But of course we notice OEMs talk endlessly about the "economies" and "efficiency" of large airplanes. Isn't a 737 Max or A321 NEO just as fuel efficient per seat? Bigger airplanes do not add high yield capacity. They only add low yield, more often empty capacity. The high yield can all be carried on the small airplane, so it is not part of the decision analysis.

Example, say 737-9 baseline capacity is say 90% load factor, which drops to say 75% on an A339 (as an example). The load factor of the incremental is around 55%. With low yields. It is not always easy to make higher profit with that. Meanwhile, the costs of the A339 occur every day. An airplane's peak capacity is not nearly so relevant as its daily cost and average daily revenue.

My point (which is qualitative, and applies loosely to what FI is doing here) is I just think people have this wrong notion that bigger airplanes make more money. Cape Air makes more profit than many wide body operators. Not profit margin... total profit. Just my 2c.

You forget cargo. The revenue generation from a wise body is very diverse and like I said when you have the market demand, it will blow out a narrow body. That’s why people have their core markets. The 1 billion dollars on the LHR-NYC route that British airways made on 7 747s a day. What in their right mind will make them now switch to narrobodies. Or the 7 a day LHR-DXB. Just because it’s “cheapest” option certainly does not make it the smartest option. These are businesses. The goal is profit maximisation. Like I said if you have the numbers and yield. a narrowbody does not work.
 
LCDFlight
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Re: Icelandair postpones widebody renewal, citing better than expected MAX performance

Fri Jan 21, 2022 9:47 am

Opus99 wrote:
LCDFlight wrote:
Opus99 wrote:
Of course larger planes are not cheaper to run. But if you have the demand the money you make is much much much more; that’s the attraction to widebodies. Widebodies were once for range and market demand but as the narrows become more capable it’s really inching closer and closer into just market demand


But of course we notice OEMs talk endlessly about the "economies" and "efficiency" of large airplanes. Isn't a 737 Max or A321 NEO just as fuel efficient per seat? Bigger airplanes do not add high yield capacity. They only add low yield, more often empty capacity. The high yield can all be carried on the small airplane, so it is not part of the decision analysis.

Example, say 737-9 baseline capacity is say 90% load factor, which drops to say 75% on an A339 (as an example). The load factor of the incremental is around 55%. With low yields. It is not always easy to make higher profit with that. Meanwhile, the costs of the A339 occur every day. An airplane's peak capacity is not nearly so relevant as its daily cost and average daily revenue.

My point (which is qualitative, and applies loosely to what FI is doing here) is I just think people have this wrong notion that bigger airplanes make more money. Cape Air makes more profit than many wide body operators. Not profit margin... total profit. Just my 2c.

You forget cargo. The revenue generation from a wise body is very diverse and like I said when you have the market demand, it will blow out a narrow body. That’s why people have their core markets. The 1 billion dollars on the LHR-NYC route that British airways made on 7 747s a day. What in their right mind will make them now switch to narrobodies. Or the 7 a day LHR-DXB. Just because it’s “cheapest” option certainly does not make it the smartest option. These are businesses. The goal is profit maximisation. Like I said if you have the numbers and yield. a narrowbody does not work.


Quite right about freight in the 737 versus A330 comparison, which I believe is a real issue FI are thinking about. Yes, Icelandair can do significant cargo. An A330 can save the need to do an additional jet freighter trip. In that sense, it is very efficient (IF that freight demand is compelling). And yet, there will be cases where FI says, you know what, forget the cargo revenue. The 737 Max saves so much money, we don't care.
 
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Rifitto
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Re: Icelandair postpones widebody renewal, citing better than expected MAX performance

Fri Jan 21, 2022 9:52 am

ikolkyo wrote:
ikolkyo wrote:
usxguy wrote:
who has the longest Max legs right now? I wasn't sure if Copa's PTY-SCL/EZE/LAX was at the top of the list or not...


Probably GOL with BSB-CUN. I'm not sure if BSB-MIA is making a return

Little correction, It was actually BSB-MCO. There was also EZE-PUJ operated by AR.


GOL actually operates BSB-CUN (GLO7734)

In the summer we had FI flying the -8 on KEF-PDX which is over 6000 km

KEF-MCO remains the most challenging route with a flight time exceeding 8 hours

the max capability is really impressive and underrated ,
no wonder why Ryanair Alaska and Icelandair all of them praised it shortly after putting it into service
 
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nikeson13
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Re: Icelandair postpones widebody renewal, citing better than expected MAX performance

Fri Jan 21, 2022 9:52 am

50x A321neo slots just opened up. (thx Qatar)... If they can get a lessor to buy them I bet they'd take a dozen or more for a stop-gap till the NMA or whatever the next-gen plane is. 788 they could force themselves to get 2-3 but not worth it IMO when you're now converting 2/4 767s in your fleet to freighters.
So future, you'd have a fleet of ~13-16 737MAX, dozen plus A321neo in the near term for 757 replacements (Again thx Qatar), but really having a 150-190 seat aircraft plus a 200-250 seat aircraft with solid cargo capabilities and range is probably the goal for them (plus their subsidiary cargo).

Northern Pacific wants to to a similar scheme in Anchorage but covid will probably make their demise unless they stay ultra-conservative.
Last edited by nikeson13 on Fri Jan 21, 2022 10:03 am, edited 1 time in total.
 
Opus99
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Re: Icelandair postpones widebody renewal, citing better than expected MAX performance

Fri Jan 21, 2022 9:55 am

LCDFlight wrote:
Opus99 wrote:
LCDFlight wrote:

But of course we notice OEMs talk endlessly about the "economies" and "efficiency" of large airplanes. Isn't a 737 Max or A321 NEO just as fuel efficient per seat? Bigger airplanes do not add high yield capacity. They only add low yield, more often empty capacity. The high yield can all be carried on the small airplane, so it is not part of the decision analysis.

Example, say 737-9 baseline capacity is say 90% load factor, which drops to say 75% on an A339 (as an example). The load factor of the incremental is around 55%. With low yields. It is not always easy to make higher profit with that. Meanwhile, the costs of the A339 occur every day. An airplane's peak capacity is not nearly so relevant as its daily cost and average daily revenue.

My point (which is qualitative, and applies loosely to what FI is doing here) is I just think people have this wrong notion that bigger airplanes make more money. Cape Air makes more profit than many wide body operators. Not profit margin... total profit. Just my 2c.

You forget cargo. The revenue generation from a wise body is very diverse and like I said when you have the market demand, it will blow out a narrow body. That’s why people have their core markets. The 1 billion dollars on the LHR-NYC route that British airways made on 7 747s a day. What in their right mind will make them now switch to narrobodies. Or the 7 a day LHR-DXB. Just because it’s “cheapest” option certainly does not make it the smartest option. These are businesses. The goal is profit maximisation. Like I said if you have the numbers and yield. a narrowbody does not work.


Quite right about freight in the 737 versus A330 comparison, which I believe is a real issue FI are thinking about. Yes, Icelandair can do significant cargo. An A330 can save the need to do an additional jet freighter trip. In that sense, it is very efficient (IF that freight demand is compelling). And yet, there will be cases where FI says, you know what, forget the cargo revenue. The 737 Max saves so much money, we don't care.

In the case of FI, do I think a wide body is worth it? Not really, maybe a fleet of 4/5 or something. Very small, 787-8 or if they want to wait for NMA even better. The quotes above seem to suggest that. The max will do very very well for them. But it certainly doesn’t apply to others
 
mjoelnir
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Re: Icelandair postpones widebody renewal, citing better than expected MAX performance

Fri Jan 21, 2022 10:01 am

With the reduction of the 757 flights and movement to 737MAX flights, I see a reduction of belly cargo to Iceland. More and more of my shipments are routed through Liege to go on the all cargo flights to KEF. I used to get quite a bit through CPH.
 
FluidFlow
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Re: Icelandair postpones widebody renewal, citing better than expected MAX performance

Fri Jan 21, 2022 10:01 am

Opus99 wrote:
LCDFlight wrote:
Opus99 wrote:
Of course larger planes are not cheaper to run. But if you have the demand the money you make is much much much more; that’s the attraction to widebodies. Widebodies were once for range and market demand but as the narrows become more capable it’s really inching closer and closer into just market demand


But of course we notice OEMs talk endlessly about the "economies" and "efficiency" of large airplanes. Isn't a 737 Max or A321 NEO just as fuel efficient per seat? Bigger airplanes do not add high yield capacity. They only add low yield, more often empty capacity. The high yield can all be carried on the small airplane, so it is not part of the decision analysis.

Example, say 737-9 baseline capacity is say 90% load factor, which drops to say 75% on an A339 (as an example). The load factor of the incremental is around 55%. With low yields. It is not always easy to make higher profit with that. Meanwhile, the costs of the A339 occur every day. An airplane's peak capacity is not nearly so relevant as its daily cost and average daily revenue.

My point (which is qualitative, and applies loosely to what FI is doing here) is I just think people have this wrong notion that bigger airplanes make more money. Cape Air makes more profit than many wide body operators. Not profit margin... total profit. Just my 2c.

You forget cargo. The revenue generation from a wise body is very diverse and like I said when you have the market demand, it will blow out a narrow body. That’s why people have their core markets. The 1 billion dollars on the LHR-NYC route that British airways made on 7 747s a day. What in their right mind will make them now switch to narrobodies. Or the 7 a day LHR-DXB. Just because it’s “cheapest” option certainly does not make it the smartest option. These are businesses. The goal is profit maximisation. Like I said if you have the numbers and yield. a narrowbody does not work.


The NYC-LHR route is a bit skewed though because if BA could run 16 321XLR flights between LHR and JFK they would but there are not slots for that. I bet if there is no slot restrictions, 16-20 XLR flights with various premium to non premium configurations based on the timing of departure would make more money than 7 WB flights. The immense flexibility would be payed back in gold. If seats do not book out just cancel 1-2 a day and rebook on the 30 minute earlier or later departure. That is very hard with a WB.

So for Operators that are not slot limited the NB makes way more sense. There is inherentely less risk in a 321XLR than in a 787-9. The only reason we still have big aircraft is their range and the slot limitations at airports.

Every mass transport solution favors frequency over capacity and I count air travel into this. Look at the AA 321T. Instead of using a wide body that adds sensless capacity, AA uses the 321T with a very premium configuration. AA could put this capacity into a wide body flight toghether with a normal transcon flight but instead they chose to use two flights on smaller aircraft.

If the WB would inherentely make more money the bigger it is, the A380 would be at 2000 deliveries. But that is not the case.

If there would be no slot restriction, 2x A321XLR and 1x 767F would have a larger revenue potential than 1x 777W. Especially because you could pull one XLR if the demand is not there. With the 777W you either fly half empty or you have no offer if you pull it.
 
Eitilt
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Re: Icelandair postpones widebody renewal, citing better than expected MAX performance

Fri Jan 21, 2022 10:23 am

While I’m sure that the Max can make Orlando now with a half load and benign weather,
I would doubt it will do it with full load and additional fuel for thunderstorm reroutes later in the year.
 
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nikeson13
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Re: Icelandair postpones widebody renewal, citing better than expected MAX performance

Fri Jan 21, 2022 10:32 am

Follow up- I was supposed to fly VIE-ZHR-SFO in 2018 but Swiss delayed the initial flight and I missed my SFO direct, so they put me on a flight thru Reykjavik to SFO on Icelandair. While I studied aviation in university does Icelandair get much help from mainline European carrier for rebooking and interline agreements when they have issues and are force to rebooking onto their flights, helped by later departure times plus the old plethora of connecting options (as of 2018)? I believe weather is a huge factor as well due to the distance of Ieland from mainland European weather. Would definitely be an advantage when trying to negotiate interline agreements. But definitely the limitation for them to replace CDG/LHR/FRA/AMS is their terminal space and their need to take advantage of the 73M or even the expected expanded-ranged CSeries (I am loyal sorry) to expand destinations and become a true airline people could frequent and commit to (Especially with AF woes, LHR constraints, Star Alliance prices[atrocious recently for in't], and slot limits at AMS). The time might not be 2022 or even '23, but if Peoples Vienna can still exist with one E170, Icelandair will adapt and survive this.
 
Opus99
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Re: Icelandair postpones widebody renewal, citing better than expected MAX performance

Fri Jan 21, 2022 10:36 am

FluidFlow wrote:
Opus99 wrote:
LCDFlight wrote:

But of course we notice OEMs talk endlessly about the "economies" and "efficiency" of large airplanes. Isn't a 737 Max or A321 NEO just as fuel efficient per seat? Bigger airplanes do not add high yield capacity. They only add low yield, more often empty capacity. The high yield can all be carried on the small airplane, so it is not part of the decision analysis.

Example, say 737-9 baseline capacity is say 90% load factor, which drops to say 75% on an A339 (as an example). The load factor of the incremental is around 55%. With low yields. It is not always easy to make higher profit with that. Meanwhile, the costs of the A339 occur every day. An airplane's peak capacity is not nearly so relevant as its daily cost and average daily revenue.

My point (which is qualitative, and applies loosely to what FI is doing here) is I just think people have this wrong notion that bigger airplanes make more money. Cape Air makes more profit than many wide body operators. Not profit margin... total profit. Just my 2c.

You forget cargo. The revenue generation from a wise body is very diverse and like I said when you have the market demand, it will blow out a narrow body. That’s why people have their core markets. The 1 billion dollars on the LHR-NYC route that British airways made on 7 747s a day. What in their right mind will make them now switch to narrobodies. Or the 7 a day LHR-DXB. Just because it’s “cheapest” option certainly does not make it the smartest option. These are businesses. The goal is profit maximisation. Like I said if you have the numbers and yield. a narrowbody does not work.


The NYC-LHR route is a bit skewed though because if BA could run 16 321XLR flights between LHR and JFK they would but there are not slots for that. I bet if there is no slot restrictions, 16-20 XLR flights with various premium to non premium configurations based on the timing of departure would make more money than 7 WB flights. The immense flexibility would be payed back in gold. If seats do not book out just cancel 1-2 a day and rebook on the 30 minute earlier or later departure. That is very hard with a WB.

So for Operators that are not slot limited the NB makes way more sense. There is inherentely less risk in a 321XLR than in a 787-9. The only reason we still have big aircraft is their range and the slot limitations at airports.

Every mass transport solution favors frequency over capacity and I count air travel into this. Look at the AA 321T. Instead of using a wide body that adds sensless capacity, AA uses the 321T with a very premium configuration. AA could put this capacity into a wide body flight toghether with a normal transcon flight but instead they chose to use two flights on smaller aircraft.

If the WB would inherentely make more money the bigger it is, the A380 would be at 2000 deliveries. But that is not the case.

If there would be no slot restriction, 2x A321XLR and 1x 767F would have a larger revenue potential than 1x 777W. Especially because you could pull one XLR if the demand is not there. With the 777W you either fly half empty or you have no offer if you pull it.

That’s a very good point. But of course there’s a balance right. You have to have the exact aircraft for the route. Which I think BA has done extremely well, they have everything and they make it work well and it’s part of why they’re very well run and very profitable. Of course. But of course. There are only so many runways out of hubs and into hubs/major cities and of course there’s cargo too
 
FluidFlow
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Re: Icelandair postpones widebody renewal, citing better than expected MAX performance

Fri Jan 21, 2022 10:52 am

Opus99 wrote:
FluidFlow wrote:
Opus99 wrote:
You forget cargo. The revenue generation from a wise body is very diverse and like I said when you have the market demand, it will blow out a narrow body. That’s why people have their core markets. The 1 billion dollars on the LHR-NYC route that British airways made on 7 747s a day. What in their right mind will make them now switch to narrobodies. Or the 7 a day LHR-DXB. Just because it’s “cheapest” option certainly does not make it the smartest option. These are businesses. The goal is profit maximisation. Like I said if you have the numbers and yield. a narrowbody does not work.


The NYC-LHR route is a bit skewed though because if BA could run 16 321XLR flights between LHR and JFK they would but there are not slots for that. I bet if there is no slot restrictions, 16-20 XLR flights with various premium to non premium configurations based on the timing of departure would make more money than 7 WB flights. The immense flexibility would be payed back in gold. If seats do not book out just cancel 1-2 a day and rebook on the 30 minute earlier or later departure. That is very hard with a WB.

So for Operators that are not slot limited the NB makes way more sense. There is inherentely less risk in a 321XLR than in a 787-9. The only reason we still have big aircraft is their range and the slot limitations at airports.

Every mass transport solution favors frequency over capacity and I count air travel into this. Look at the AA 321T. Instead of using a wide body that adds sensless capacity, AA uses the 321T with a very premium configuration. AA could put this capacity into a wide body flight toghether with a normal transcon flight but instead they chose to use two flights on smaller aircraft.

If the WB would inherentely make more money the bigger it is, the A380 would be at 2000 deliveries. But that is not the case.

If there would be no slot restriction, 2x A321XLR and 1x 767F would have a larger revenue potential than 1x 777W. Especially because you could pull one XLR if the demand is not there. With the 777W you either fly half empty or you have no offer if you pull it.

That’s a very good point. But of course there’s a balance right. You have to have the exact aircraft for the route. Which I think BA has done extremely well, they have everything and they make it work well and it’s part of why they’re very well run and very profitable. Of course. But of course. There are only so many runways out of hubs and into hubs/major cities and of course there’s cargo too


Sure it was just a theoretical excurse. There is always a point where one aircraft becomes overall the better solution even if most of the odds are stacked against it. Hence why we still see the 330neo selling. There are so many variables in play.

In the long run all options for Icelandair are open and I would not even exclude that the 767 replacement is just gonna be a 15 year old A332. While the NBs can be used all year around all the time, during low times a used aircraft will be cheaper to park.
 
Opus99
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Re: Icelandair postpones widebody renewal, citing better than expected MAX performance

Fri Jan 21, 2022 10:58 am

FluidFlow wrote:
Opus99 wrote:
FluidFlow wrote:

The NYC-LHR route is a bit skewed though because if BA could run 16 321XLR flights between LHR and JFK they would but there are not slots for that. I bet if there is no slot restrictions, 16-20 XLR flights with various premium to non premium configurations based on the timing of departure would make more money than 7 WB flights. The immense flexibility would be payed back in gold. If seats do not book out just cancel 1-2 a day and rebook on the 30 minute earlier or later departure. That is very hard with a WB.

So for Operators that are not slot limited the NB makes way more sense. There is inherentely less risk in a 321XLR than in a 787-9. The only reason we still have big aircraft is their range and the slot limitations at airports.

Every mass transport solution favors frequency over capacity and I count air travel into this. Look at the AA 321T. Instead of using a wide body that adds sensless capacity, AA uses the 321T with a very premium configuration. AA could put this capacity into a wide body flight toghether with a normal transcon flight but instead they chose to use two flights on smaller aircraft.

If the WB would inherentely make more money the bigger it is, the A380 would be at 2000 deliveries. But that is not the case.

If there would be no slot restriction, 2x A321XLR and 1x 767F would have a larger revenue potential than 1x 777W. Especially because you could pull one XLR if the demand is not there. With the 777W you either fly half empty or you have no offer if you pull it.

That’s a very good point. But of course there’s a balance right. You have to have the exact aircraft for the route. Which I think BA has done extremely well, they have everything and they make it work well and it’s part of why they’re very well run and very profitable. Of course. But of course. There are only so many runways out of hubs and into hubs/major cities and of course there’s cargo too


Sure it was just a theoretical excurse. There is always a point where one aircraft becomes overall the better solution even if most of the odds are stacked against it. Hence why we still see the 330neo selling. There are so many variables in play.

In the long run all options for Icelandair are open and I would not even exclude that the 767 replacement is just gonna be a 15 year old A332. While the NBs can be used all year around all the time, during low times a used aircraft will be cheaper to park.

For Icelandair the narrows make the most sense.as they kind of sit in between mainland Europe and the US. They’re not a hub and the aircraft is right for their home market demand too.
 
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JetBuddy
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Re: Icelandair postpones widebody renewal, citing better than expected MAX performance

Fri Jan 21, 2022 11:00 am

LCDFlight wrote:
I always say you can lose the least money by flying the cheapest aircraft it takes to cover your daily network. That is your decision baseline. Some "conventional wisdom" that you need widebodies is not the baseline. The baseline is the cheapest solution. People have this prejudice that larger airplanes are "cheaper" to run. That is false in COVID and actually has always been very false, with a kernel of truth sometimes.


I don't think their benchmark is "lose the least money". I think it's making as much money as they can.
 
mjoelnir
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Re: Icelandair postpones widebody renewal, citing better than expected MAX performance

Fri Jan 21, 2022 11:39 am

Icelandair makes good money on freight. From Iceland it is mainly fresh food, very time critical goods. The last years it was mainly cod, now fresh salmon from Iceland is getting moved by air too.The 757 and 767 have belly freight capacities, the 737 less so. I assume the decision if a 737, 757 or 767 makes a certain trip is partly based on the belly cargo volume and weight.
The added range and low CASM of the 737MAX will delay the replacement of the 757 and 767, but not preclude it.
 
TC957
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Re: Icelandair postpones widebody renewal, citing better than expected MAX performance

Fri Jan 21, 2022 11:42 am

I'm surprised FI haven't tried a Far East route yet. The 767's should make NRT & ICN and with the Japanese and Koreans love for fish, think of the cargo possibilities !
 
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SRQKEF
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Re: Icelandair postpones widebody renewal, citing better than expected MAX performance

Fri Jan 21, 2022 11:56 am

mjoelnir wrote:
Icelandair makes good money on freight. From Iceland it is mainly fresh food, very time critical goods. The last years it was mainly cod, now fresh salmon from Iceland is getting moved by air too.The 757 and 767 have belly freight capacities, the 737 less so. I assume the decision if a 737, 757 or 767 makes a certain trip is partly based on the belly cargo volume and weight.
The added range and low CASM of the 737MAX will delay the replacement of the 757 and 767, but not preclude it.


Freight capability definitely affects aircraft selection, see how LHR has consistently been a 757/767 throughout the pandemic even with stronger travel restrictions and softer demand.
 
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Polot
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Re: Icelandair postpones widebody renewal, citing better than expected MAX performance

Fri Jan 21, 2022 12:02 pm

mjoelnir wrote:
Icelandair makes good money on freight. From Iceland it is mainly fresh food, very time critical goods. The last years it was mainly cod, now fresh salmon from Iceland is getting moved by air too.The 757 and 767 have belly freight capacities, the 737 less so. I assume the decision if a 737, 757 or 767 makes a certain trip is partly based on the belly cargo volume and weight.
The added range and low CASM of the 737MAX will delay the replacement of the 757 and 767, but not preclude it.

In terms of volume the 737-9 cargo area is similar to that as the 757-200. The 752 obviously has better payload range though.
 
beachroad
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Re: Icelandair postpones widebody renewal, citing better than expected MAX performance

Fri Jan 21, 2022 12:44 pm

Knowing Bain a little bit, they'll push for standardisation, "sticking to the knitting" (i.e. focus on doing one thing really well, and avoid distractions) and where possible go for scalability.

So, my guess is under Bain influence, you'll see a MAX only airline with an extra hub bank at KEF (perhaps summer only); with routes that require non-standard aircraft dropped. A whole special fleet for SFO and MCO would be a hard business case to make. I am aware of some insane "pay by hour" once a generation longterm lease deals available on 787s recently, that FI passed on. That feels like Bain's "stick to knitting" attitude.

On the cargo side, to some degree you create belly capacity with "hand baggage only fares", which are increasingly popular.

On an aside, I also can't see the recently rebranded Dash-8 operation lasting in the long term, it's so completely stand alone and non-core that Bain will want to asset strip off to another buyer.

Whilst I still think that bit of extra payload A321s offer is a better fit for FI, now they've got the MAX, the efficiencies of a single type would surely be a strong argument against more aircraft types.
 
LCDFlight
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Re: Icelandair postpones widebody renewal, citing better than expected MAX performance

Fri Jan 21, 2022 12:45 pm

JetBuddy wrote:
LCDFlight wrote:
I always say you can lose the least money by flying the cheapest aircraft it takes to cover your daily network. That is your decision baseline. Some "conventional wisdom" that you need widebodies is not the baseline. The baseline is the cheapest solution. People have this prejudice that larger airplanes are "cheaper" to run. That is false in COVID and actually has always been very false, with a kernel of truth sometimes.


I don't think their benchmark is "lose the least money". I think it's making as much money as they can.


You realize the two are synonymous in a great many example cases. Many of the world's leading airlines lose money as a tradition. What I said is synonymous with profit optimization.

Consider Delta. One of the world's largest, most advanced & wealthiest airlines. Their flagship fleet of A359 is only 15 frames right now. That's their flagship. Of 800 mainline fleet. They never even bought the 777-300ER. That is stunning, please think about it! Because, for Delta, the 777-200ER/LR made more money than the 777-300ER. And COVID only amplified the correctness of that decision.

This is why Icelandair is postponing widebodies. They incur risk, costs, and uncertain (at best) incremental profits that may, in fact, be worse than a narrowbody fleet.
 
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JannEejit
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Re: Icelandair postpones widebody renewal, citing better than expected MAX performance

Fri Jan 21, 2022 1:00 pm

asuflyer wrote:
The first MAX8 is being painted into the new livery this week.


Any idea if that's an aircraft already 'on stock' or a factory delivery that's imminent ?
 
Someone83
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Re: Icelandair postpones widebody renewal, citing better than expected MAX performance

Fri Jan 21, 2022 1:04 pm

JannEejit wrote:
asuflyer wrote:
The first MAX8 is being painted into the new livery this week.


Any idea if that's an aircraft already 'on stock' or a factory delivery that's imminent ?


Seems to be TF-ICE according to Skyliner

Boeing 737 -8 44353 6782 TF-ICE Icelandair ferried 17jan22 KEF-NWI for paint into new cs
 
LucaDiMontanari
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Re: Icelandair postpones widebody renewal, citing better than expected MAX performance

Fri Jan 21, 2022 2:27 pm

nikeson13 wrote:
So future, you'd have a fleet of ~13-16 737MAX, dozen plus A321neo in the near term for 757 replacements (Again thx Qatar), but really having a 150-190 seat aircraft plus a 200-250 seat aircraft with solid cargo capabilities and range is probably the goal for them (plus their subsidiary cargo).


Do you really think it makes much sense to operated two such small subfleets in the same segment? What is publicly to read about the last narrowbody generation says, that the MAX is more efficient than the NEO on long segments, which is more or less the case for every route in Icelandair's network. Why should FI buy a fistful of orphan 321's for just the odd destination where the range of the MAX is maxed out? It is definitively more economical to accept some restrictions on a few routes than operate a separate mini fleet for those. And I highly doubt that the A321XLR is of so much use for FI: 1st on the long runs it lacks cargo payload (which is different from capacity) and 2nd once it was said that the 321neo family can do 95% of what the 757 can do. However a lot of FI's network and needs is in exactly within those 5% the 321's can't do.

Opus99 wrote:
For Icelandair the narrows make the most sense.as they kind of sit in between mainland Europe and the US. They’re not a hub and the aircraft is right for their home market demand too.


Have you ever closely studied their business model? Have you ever counted how man US tourist board their birds in Europe? If this is not a hub network, I wonder what you would call a hub then...

beachroad wrote:
On an aside, I also can't see the recently rebranded Dash-8 operation lasting in the long term, it's so completely stand alone and non-core that Bain will want to asset strip off to another buyer.


Interesting question - however one has to see, that Iceland works a little different than other countries. You can't operate an airline by the (LCC-)handbook there. That is something even the Bain guys have to accept or they will fail epically. The Dash-8 operations are very important to everything that takes more than 3.5 hours by car from Reykjavik (and are thus subsidized). Akureyri is a good 4 hours drive, Höfn í Hornafirði is 6:30 and Egilsstadir is easily over 8 hours away by car. In summer under good weather conditions. And public transport is ludicrous at best, there is no such thing as high speed rail in Iceland. Sure, Höfn isn't operated by FI but by Eagle Air with their old J32's. But this shows even better that while there is a healthy domestic demand (read people with money in their pockets), the total numbers of passengers are way too few to justify domestic 737's. And honestly, I don't want to be in charge to handle a full MAX9 at EGS's microscopic terminal...

Furthermore there are even more really special operations during the summer, when they fly to Greenland including Ilulissat and Nuuk with their DHC-8-200 out of Reykjavik. While these incredible expensive flights (often well into the four digit range) have a good demand from wealthy tourists, there is hardly much more demand to these remote places, neither local VFR nor business traffic. I can't see that such flights will be flown by anything larger in the foreseeable future, maybe all Q400 operations at some point, when the old -200 finally fall apart. On the other hand I can't see an Eagle Air to take over the whole domestic market, that would be a bite too much for them.
 
WorldFlier
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Re: Icelandair postpones widebody renewal, citing better than expected MAX performance

Fri Jan 21, 2022 2:30 pm

So can Icelandair finally become as big as Copa? While its a nice to be able to do say (random city pair) with 1 stop, when you can do 50 random city pairs with 1 stop instead of 2, does it start making sense like Copa and Emirates?
 
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Polot
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Re: Icelandair postpones widebody renewal, citing better than expected MAX performance

Fri Jan 21, 2022 2:34 pm

WorldFlier wrote:
So can Icelandair finally become as big as Copa? While its a nice to be able to do say (random city pair) with 1 stop, when you can do 50 random city pairs with 1 stop instead of 2, does it start making sense like Copa and Emirates?

They will never be as big as Copa, because ultimately Panama/PTY is a much larger market than Iceland/KEF. Panama City alone (just the city, not the urban area) has almost 3x as many people as the entire country of Iceland.
 
WN732
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Re: Icelandair postpones widebody renewal, citing better than expected MAX performance

Fri Jan 21, 2022 2:53 pm

Can't believe no one said this yet. Although the range is good, how many fish can the MAX carry?

Congrats to them and Boeing. It is good to see good news about the MAX.
 
Opus99
Posts: 3178
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Re: Icelandair postpones widebody renewal, citing better than expected MAX performance

Fri Jan 21, 2022 2:55 pm

LucaDiMontanari wrote:
nikeson13 wrote:
So future, you'd have a fleet of ~13-16 737MAX, dozen plus A321neo in the near term for 757 replacements (Again thx Qatar), but really having a 150-190 seat aircraft plus a 200-250 seat aircraft with solid cargo capabilities and range is probably the goal for them (plus their subsidiary cargo).


Do you really think it makes much sense to operated two such small subfleets in the same segment? What is publicly to read about the last narrowbody generation says, that the MAX is more efficient than the NEO on long segments, which is more or less the case for every route in Icelandair's network. Why should FI buy a fistful of orphan 321's for just the odd destination where the range of the MAX is maxed out? It is definitively more economical to accept some restrictions on a few routes than operate a separate mini fleet for those. And I highly doubt that the A321XLR is of so much use for FI: 1st on the long runs it lacks cargo payload (which is different from capacity) and 2nd once it was said that the 321neo family can do 95% of what the 757 can do. However a lot of FI's network and needs is in exactly within those 5% the 321's can't do.

Opus99 wrote:
For Icelandair the narrows make the most sense.as they kind of sit in between mainland Europe and the US. They’re not a hub and the aircraft is right for their home market demand too.


Have you ever closely studied their business model? Have you ever counted how man US tourist board their birds in Europe? If this is not a hub network, I wonder what you would call a hub then...

beachroad wrote:
On an aside, I also can't see the recently rebranded Dash-8 operation lasting in the long term, it's so completely stand alone and non-core that Bain will want to asset strip off to another buyer.


Interesting question - however one has to see, that Iceland works a little different than other countries. You can't operate an airline by the (LCC-)handbook there. That is something even the Bain guys have to accept or they will fail epically. The Dash-8 operations are very important to everything that takes more than 3.5 hours by car from Reykjavik (and are thus subsidized). Akureyri is a good 4 hours drive, Höfn í Hornafirði is 6:30 and Egilsstadir is easily over 8 hours away by car. In summer under good weather conditions. And public transport is ludicrous at best, there is no such thing as high speed rail in Iceland. Sure, Höfn isn't operated by FI but by Eagle Air with their old J32's. But this shows even better that while there is a healthy domestic demand (read people with money in their pockets), the total numbers of passengers are way too few to justify domestic 737's. And honestly, I don't want to be in charge to handle a full MAX9 at EGS's microscopic terminal...

Furthermore there are even more really special operations during the summer, when they fly to Greenland including Ilulissat and Nuuk with their DHC-8-200 out of Reykjavik. While these incredible expensive flights (often well into the four digit range) have a good demand from wealthy tourists, there is hardly much more demand to these remote places, neither local VFR nor business traffic. I can't see that such flights will be flown by anything larger in the foreseeable future, maybe all Q400 operations at some point, when the old -200 finally fall apart. On the other hand I can't see an Eagle Air to take over the whole domestic market, that would be a bite too much for them.

They’re not in the same class of hub as some of the bigger players. And they certainly don’t get the same level of traffic. HENCE, they don’t need that size of aircraft

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