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AF022
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Will Carriers Ground 757s Due To Fuel Costs?

Fri Nov 30, 2007 2:04 am

There has been a lot of talk about fuel costs lately, and I believe the NYTimes article and other sources have indicated that carriers are considering grounding less efficient aircraft.

There are a lot of 757s criss-crossing the lower 48 that probably do not have the best economics. Are airlines doing anything to replace these aircraft with more effienct 738s or 321s where possible? I know there are some transatlantics and HNL flights with 757s, but there are a lot of domesitc flights too.

How can UA, NW and AA generate profits with 757s when oil is so high, and if they can't what are they going to do about it? Surely they could retire some 757s and use the revenue to get more efficient aircraft, no?
 
futurecaptain
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RE: Will Carriers Ground 757s Due To Fuel Costs?

Fri Nov 30, 2007 2:13 am

Firsly, the 757 is a very efficient aircraft. It has great performance and it's range and capacity cannot be exactly matched by any other aircraft right now, it has a niche and fills it well.

Airlines obviously are generating profits from this aircraft as they are spending money retrofitting the aircraft with winglets. This should signify a long term commitment to the aircraft, airlines wouldn't pay $1 million+ per set if they were going to retire the aircraft in a year or two. Even airlines which seem to be going to Airbus, US Airways for example, have no plans to retire the 757. It is that good.

There are almost no 757's on the used market, they are in very high demand by current operators. With Fed Ex buying up all they can get the resale value will probably stay high for years to come.
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nwa757boy
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RE: Will Carriers Ground 757s Due To Fuel Costs?

Fri Nov 30, 2007 2:19 am



Quoting AF022 (Thread starter):
Surely they could retire some 757s and use the revenue to get more efficient aircraft, no?

Parking aircraft doesn't make money for the airline either. Planes only make money when they are in the air. I don't think the 757 will be retired anytime soon.
 
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lightsaber
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RE: Will Carriers Ground 757s Due To Fuel Costs?

Fri Nov 30, 2007 2:30 am



Quoting NWA757boy (Reply 2):
Parking aircraft doesn't make money for the airline either. Planes only make money when they are in the air.

But they also only make money when RASM is greater than CASM. Sadly, high oil prices are going force consolidation in the industry.

Quoting Futurecaptain (Reply 1):
With Fed Ex buying up all they can get the resale value will probably stay high for years to come.

Only RR engined 757's.  Sad As you point out, 757's are in demand. However, $90/bbl oil is going to crimp the service that can be offered.

I do have to admit, I'm surprised we're not hearing about regional jets being grounded... I really expected to see small cities losing service due to the high costs.

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flynavy
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RE: Will Carriers Ground 757s Due To Fuel Costs?

Fri Nov 30, 2007 2:52 am



Quoting AF022 (Thread starter):
There are a lot of 757s criss-crossing the lower 48 that probably do not have the best economics. Are airlines doing anything to replace these aircraft with more effienct 738s or 321s where possible? I know there are some transatlantics and HNL flights with 757s, but there are a lot of domesitc flights too

Last time I checked, 757s were criss-crossing Europe as well, and have been for 20+ years.

Not to mention the fact that oil was designed when oil was $65-$70 a barrel anyway.
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PC12Fan
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RE: Will Carriers Ground 757s Due To Fuel Costs?

Fri Nov 30, 2007 2:58 am

Try to do familiarize yourself with these narrow bodied aircraft first. Pound for pound, the 757 is still one of the most efficient narrow bodies in the air, especially the -300 series.
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Viscount724
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RE: Will Carriers Ground 757s Due To Fuel Costs?

Fri Nov 30, 2007 3:01 am



Quoting NWA757boy (Reply 2):
Parking aircraft doesn't make money for the airline either. Planes only make money when they are in the air.

But they lose less money when they're parked if you can't cover your costs. However it depends whether the aircraft are owned or leased. If owned, it's very easy to park an aircraft to cut costs since you have no big monthly lease payment to cover which has to be paid whether the aircraft is flying or not. In that case airlines will usually keep flying them just to generate enough cash to cover the lease payments, although they're not covering their total costs.

NW's CEO said in an interview not long ago that their DC-9s would be quickly parked if fuel prices became a serious problem since they were paid for long ago and parking them costs nothing.

Look at the many hundreds of 727s and DC-9s etc. that were quickly parked (many of which never flew again) in the major traffic slump after 9/11. The advantage now is that airlines have been able to make most fare increases stick to offset rising fuel prices. But at some point that will no longer work and further fare increases will cause a drop in demand. That's when you're going to see a lot of aircraft heading for the desert, and many orders for new aircraft cancelled/postponed. The soft US economy which many observers think is heading for recession, plus the weak US Dollar, won't help.
 
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RE: Will Carriers Ground 757s Due To Fuel Costs?

Fri Nov 30, 2007 3:04 am



Quoting Lightsaber (Reply 3):
I do have to admit, I'm surprised we're not hearing about regional jets being grounded... I really expected to see small cities losing service due to the high costs.

I'm surprised as well, but I think it's coming...
 
jfk787nyc
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RE: Will Carriers Ground 757s Due To Fuel Costs?

Fri Nov 30, 2007 3:11 am



Quoting Viscount724 (Reply 6):
plus the weak US Dollar, won't help.

How exactly does the weak US Dollar hurt the United States Airline industry? People are making exactly the same amount of money they made in 2000, They have enough money to travel domestically. Number 2 What about all of the BILLIONS of people that are feeling its time to come the states to see New York, Chicago, Miami or Los Angeles?

People in Europe are trying to get to the states as fast as possible because everyone knows this weak US Dollar will not stick. New York is gearing up for the busiest Christmas season EVER. Europeans, Asians & the Russians are coming to New York to spend Millions upon Millions of dollars here.
 
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RE: Will Carriers Ground 757s Due To Fuel Costs?

Fri Nov 30, 2007 3:12 am



Quoting AF022 (Thread starter):
Are airlines doing anything to replace these aircraft with more effienct 738s or 321s where possible?

Do 738s and 321s have lower CASM than 757(-200)s?
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dl767captain
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RE: Will Carriers Ground 757s Due To Fuel Costs?

Fri Nov 30, 2007 3:17 am

When the 757 becomes as inefficient as the 767-200s then i could see them being replaced, but they are still relatively fuel efficient. What we will have to look at is how much more efficient is the 737-900 series compared to the 757-200. If the 739 is much more efficient then some carriers might order it to replace the older 757s, but that will cost money and take time until it could even be delivered. Right now there is not a real replacement for the 757, the closest would be the Y1 and that wont be here for a while. When a 757 replacement is introduced i bet we will see an imediate order from DL, AA, UA, and CO. The 757 is utilized greatly within their fleets along with the 767, Boeing should really look at a 757 replacement. Just like a larger 787 for the 777 size, shrink the 787 in length a little and shrink in width to offer 6-7 across. The 757 seems great for DL and their Transcon routes, keeps them from using a bunch of 737-700 sized planes and gives them good profits. The current 787-3 works ok for a 767-300 replacement but might not for the -300ER version, and i'm sure airlines like DL would be reluctant to order the 787-3 for domestic ops until they complete the replacement of the 767-300ER variants. The 757 is still efficient, and to bring up tthis subject again, if NW can keep the DC-9s then the 757s will obviously stay for a while.
 
Viscount724
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RE: Will Carriers Ground 757s Due To Fuel Costs?

Fri Nov 30, 2007 3:27 am

Quoting Jfk787nyc (Reply 8):
Quoting Viscount724 (Reply 6):
plus the weak US Dollar, won't help.

How exactly does the weak US Dollar hurt the United States Airline industry?

While inbound tourism to the US will be helped by the weak dollar, that's hard to predict and subject to many other variables. It also doesn't affect all routes. There are markets where US-origin traffic has always been stronger than inbound traffic. In those markets the weak dollar is likely to result in a drop in outbound passengers but not enough additional inbound traffic to offset the losses.

And some major traditional inbound markets to the US like Japan have been suffering from their own economic problems, resulting in a big drop in Japanese tourists to the US compared to a few years ago. That's not likely to change soon. And people in countries like China (including Hong Kong) and others in Asia and the Middle East etc. whose currencies are closely tied to the US Dollar don't suddenly find a trip the US cheaper than before.

US airlines are also more severely affected by the high oil prices than carriers in countries whose currencies have been very strong (e.g. LH or other euro-based carriers) since those carriers aren't impacted as much by the high fuel prices since fuel is priced in US Dollars. They can thus hold off raising fares longer than US airlines, and if they don't increase their fares, US airlines operating on competitive routes can't either, putting a further squeeze on US airline profits.

Average hotel rates in the US have also been near record highs over the past couple of years due to strong demand. In many cases that probably more than offsets the savings foreign visitors will see in total costs of a trip to the US compared to 2 or 3 years ago, especially in areas most popular with foreign tourists like NYC.

[Edited 2007-11-29 19:41:57]
 
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RE: Will Carriers Ground 757s Due To Fuel Costs?

Fri Nov 30, 2007 3:42 am



Quoting Jfk787nyc (Reply 8):
How exactly does the weak US Dollar hurt the United States Airline industry? People are making exactly the same amount of money they made in 2000, They have enough money to travel domestically. Number 2 What about all of the BILLIONS of people that are feeling its time to come the states to see New York, Chicago, Miami or Los Angeles?

Sure tourists may spend a fortune in Fifth Avenue or the Magnificent Mile, but typically most tourist don't pay top money for airline tickets. What airline covets are the passengers up front or that paid the full Y-fare.
 
CALMSP
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RE: Will Carriers Ground 757s Due To Fuel Costs?

Fri Nov 30, 2007 3:49 am

shoot..............i've found the 738 to less fuel efficient than our 757 fleet
 
phishphan70
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RE: Will Carriers Ground 757s Due To Fuel Costs?

Fri Nov 30, 2007 3:50 am



Quoting PC12Fan (Reply 5):
Try to do familiarize yourself with these narrow bodied aircraft first. Pound for pound, the 757 is still one of the most efficient narrow bodies in the air, especially the -300 series.

i was under the same impression...isn't the 757 one of those aircraft that airlines seem to want to hold onto mainly because they are so efficent? i fly on a 757 atleast 6-8 times a year on NW from SFO-DTW and love this aircraft. always a thrill to take off of one of the 1's at SFO and climbing like a rocket over OAK. Boy i love the 757...And the Bay Area!!!
 
N766UA
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RE: Will Carriers Ground 757s Due To Fuel Costs?

Fri Nov 30, 2007 3:54 am

The 757, particularly the 753, has a phenominal CASM. I'd expect carriers to park 737s before they parked 757s.
 
commavia
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RE: Will Carriers Ground 757s Due To Fuel Costs?

Fri Nov 30, 2007 4:19 am

As others have said, the 757s aren't going anywhere. At all. Period. The 757s are phenomenal airplanes, with operating performance and costs/economics that are still, 25+ years after development, amazingly competitive. The 757s are efficient and reliable aircraft - they are an airline scheduler's dream, and a financial analyst's dream as well.

Plus, the 757s serve a near-critical vital role for most of the airlines they serve, particularly in the U.S. They are perfect on mid-range missions like mid-continental hauls in the U.S., but are equally spectacular when operating long flights like trans-cons and, increasingly, intercontinental flights. Their capabilities are being pushed to the limits recently with more and more airlines pressuring further into Europe (and perhaps South America, soon) with these birds, and they are rising to the challenge.

We need look no further than the problems US have had flying A321s and B6 flying their A320s reliably on transcons without fuel stops to see just how indispensable the 757s are.
 
CO787EWR
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RE: Will Carriers Ground 757s Due To Fuel Costs?

Fri Nov 30, 2007 4:30 am

757's for US Domestics are probaly paid off so they are only making money (except for the things that you have to pay for the lifetime of the aircraft fuel MX etc) because you don't have to pay the manufacturer or the bank you got financing from just like NW's DC-9's. Second of all they are extremely versatile. CO runs NJ-Florida and NJ-Europe with their 757-200's in the same day (Impossible to upgrade on but thats another story).

They aren't going anywhere they are efficient birds.

[Edited 2007-11-29 20:31:31]
 
DLOnur
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RE: Will Carriers Ground 757s Due To Fuel Costs?

Fri Nov 30, 2007 4:34 am

Rumors spreading on the ground here at DL is that we will be grounding some AC starting in January. I do not know which ones, but it's been confirmed from a TechOps friend who says that the price of fuel is killing us right now (like it is for most carriers).
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Viscount724
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RE: Will Carriers Ground 757s Due To Fuel Costs?

Fri Nov 30, 2007 4:34 am



Quoting Commavia (Reply 16):
We need look no further than the problems US have had flying A321s and B6 flying their A320s reliably on transcons without fuel stops to see just how indispensable the 757s are.

But for carriers that don't need 757s for secondary routes to Europe and only fly them domestically, aren't the 737-800 or -900 (especially the -900ER) more economic options than the 757, being lighter and more fuel-efficient but still with adequate range for US transcontinental routes?
 
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RE: Will Carriers Ground 757s Due To Fuel Costs?

Fri Nov 30, 2007 4:56 am



Quoting DLOnur (Reply 18):
Rumors spreading on the ground here at DL is that we will be grounding some AC starting in January. I do not know which ones, but it's been confirmed from a TechOps friend who says that the price of fuel is killing us right now (like it is for most carriers).

Those rumors sound like just that -- rumors. I grant you that fuel costs are pretty high, and are probably hurting everyone badly, but I'm puzzled how a TechOps person would know that high fuel costs are definitely going to make DL ground aircraft in January. And, if he's in technical operations, wouldn't he also know what types would be affected? No offense intended, but everyone in airlines likes gossip a little too much.

Further, it strikes me that January is a good time to ground a few planes (with the lower traffic until spring break holiday travel picks up), but that any such groundings would be temporary, "tactical" moves to conserve on maintenance and remove excess capacity from select markets until such time (probably only a few months away) when improving traffic and the economy overall justify their quick return to the skies.

I wouldn't be surprised by some US airlines grounding a handful of birds for a little while, fully intending to return them to service within a relatively short time. In addition to saving on cycles and other wear and tear, and temporarily removing excess capacity from the market overall, this might allow airlines to save money if they can bid heavy maintenance jobs on several birds together. This is assuming that the frames grounded are those nearest a major check, and that the carrier is one that outsources at least some of its heavy maintenance. (I believe that NW has dones this a few times with A320s during the winter months.) It would, of course, also allow quicker introduction throughout the fleet of new liveries and cabin fittings once these aircraft return to service. Just my $.02.
 
commavia
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RE: Will Carriers Ground 757s Due To Fuel Costs?

Fri Nov 30, 2007 5:05 am



Quoting Viscount724 (Reply 19):
But for carriers that don't need 757s for secondary routes to Europe and only fly them domestically, aren't the 737-800 or -900 (especially the -900ER) more economic options than the 757, being lighter and more fuel-efficient but still with adequate range for US transcontinental routes?

To an extent, but only to an extent. Sure, the larger NG737 variants can fly on the same hauls the 757 can (though the same can't be said for the A321, interestingly). But they are smaller, and can't carry as many people or cargo - which hurts on high-density routes and in cargo-intensive markets like some of the transcons, and just about anything to Latin America. In those markets, having a plane with a larger cargo capacity, but without sacrificing range or other payload, is critical: and the 757 fills the niche in a way that - at least as of now - no other aircraft (Boeing or Airbus) can.
 
futurecaptain
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RE: Will Carriers Ground 757s Due To Fuel Costs?

Fri Nov 30, 2007 5:06 am



Quoting DLOnur (Reply 18):
Rumors spreading on the ground here at DL is that we will be grounding some AC starting in January.

Grounding 757's would be a shock seeing as Delta recently purchased more of the type from AA.

Quoting Viscount724 (Reply 19):

The 757 still holds 10% more people then the 739 and is far more handy. Hot and high performance, faster speed, ect.
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DLOnur
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RE: Will Carriers Ground 757s Due To Fuel Costs?

Fri Nov 30, 2007 5:10 am



Quoting Futurecaptain (Reply 22):
Grounding 757's would be a shock seeing as Delta recently purchased more of the type from AA.

My source did not specify AC types...only that we would be grounding AC to off set higher fuel prices. I doubt the the 752's will be the ones grounded.

Also, less frequency to certain destinations are starting to pop up all over the system based on forecasted demands...
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ckfred
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RE: Will Carriers Ground 757s Due To Fuel Costs?

Fri Nov 30, 2007 5:54 am

A friend of mine is a 757/767 F/O with AA. He told me that at some meeting he attended, someone from HQ made the statement that the 757 was the most efficient plane in the fleet, and the 737-800s had been in the fleet for about a year. Unfortunately, I don't recall the statistic used for comparison. IIRC, AA placed its last 757 order in 2000, and this meeting was shortly before AA announced the order.

From what my friend tells me, the 757 is going to remain a popular airplane until someone can build a 180-200 seat plane that has trans-con/Northeast U.S.-U.K. range and the same cargo capacity with better fuel economy. Oh, and it also needs to be able to fly short routes such as ORD-STL, ORD-DTW, and MIA-MCO profitably, as well as fly into airports such as DCA and MDW.
 
AF022
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RE: Will Carriers Ground 757s Due To Fuel Costs?

Fri Nov 30, 2007 2:21 pm



Quoting Jfk787nyc (Reply 8):
How exactly does the weak US Dollar hurt the United States Airline industry?

Domestically, not at all, but international it hurts. Oil in terms of Euros probably hasn't changed much at all, so I would assume AF/BA/LH have seen little change in their fuel costs while DL/AA/UA are getting hammered.

Quoting Futurecaptain (Reply 22):
The 757 still holds 10% more people then the 739 and is far more handy. Hot and high performance, faster speed, ect.



Quoting N766UA (Reply 15):
The 757, particularly the 753, has a phenominal CASM. I'd expect carriers to park 737s before they parked 757s.

Agree on both counts, but the 747-400 has awesome CASM too and you don't see it operate DSM-MSP. If airlines have to give away seats to fill 757s then the 737 is probably better in some markets.

There is a lot of capacity out there, and perhaps the airlines would benefit by downgrading 762s and 757s to 738s or something (where feasible, of course) without reducing frequencies.
 
PC12Fan
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RE: Will Carriers Ground 757s Due To Fuel Costs?

Fri Nov 30, 2007 2:30 pm

So, the question now is, do you think Boeing will now restart the 757 line?  duck 

 laughing 
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flynavy
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RE: Will Carriers Ground 757s Due To Fuel Costs?

Fri Nov 30, 2007 2:32 pm



Quoting Futurecaptain (Reply 22):
Grounding 757's would be a shock seeing as Delta recently purchased more of the type from AA.

We did not purchase any AA assets. The aircraft you refer to are leased.

IF we park ANY aircraft, they will be ones already paid for. No sense parking aircraft you're still having financed. Look at it this way - IF we park any planes, they'll all get painted in the interim.  Smile
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Orion737
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RE: Will Carriers Ground 757s Due To Fuel Costs?

Fri Nov 30, 2007 2:54 pm

The 757 is virtually impossible to replace in European/UK charter airlines fleet too, despite their 757s being amongst some of the oldest.
 
acvitale
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RE: Will Carriers Ground 757s Due To Fuel Costs?

Fri Nov 30, 2007 2:56 pm



Quoting AF022 (Thread starter):
There has been a lot of talk about fuel costs lately, and I believe the NYTimes article and other sources have indicated that carriers are considering grounding less efficient aircraft.

There are a lot of 757s criss-crossing the lower 48 that probably do not have the best economics. Are airlines doing anything to replace these aircraft with more effienct 738s or 321s where possible? I know there are some transatlantics and HNL flights with 757s, but there are a lot of domesitc flights too.

How can UA, NW and AA generate profits with 757s when oil is so high, and if they can't what are they going to do about it? Surely they could retire some 757s and use the revenue to get more efficient aircraft, no?

I would think that you would have looked up the capacity vs. fuel burn numbers. The 757 is one of the most effective aircraft out today. When you add the range it is one of the best choices from trans-Atlantic and trans-Continental flights available. It can be used from NYC-LON and LON-LOS as effectively as NYC-MIA. It's short haul is also very effective which is why we see it used IAH-AUS and TPA-ATL.

As for the Delta Air Lines aircraft to be retired look first at the MD88s. Yes the same planes that had the interior retrofits.

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RE: Will Carriers Ground 757s Due To Fuel Costs?

Fri Nov 30, 2007 3:00 pm



Quoting NWA757boy (Reply 2):
Parking aircraft doesn't make money for the airline either. Planes only make money when they are in the air. I don't think the 757 will be retired anytime soon.

A parked aircraft making no revenue is better off than an aircraft flying in the red.
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flynavy
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RE: Will Carriers Ground 757s Due To Fuel Costs?

Fri Nov 30, 2007 3:05 pm



Quoting ACVitale (Reply 29):
As for the Delta Air Lines aircraft to be retired look first at the MD88s. Yes the same planes that had the interior retrofits.

Some MD-88s have already been returned to the lessor, as well as three domestic, non-ER 767-300s.
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EXAAUADL
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RE: Will Carriers Ground 757s Due To Fuel Costs?

Fri Nov 30, 2007 3:17 pm



Quoting AF022 (Thread starter):
There are a lot of 757s criss-crossing the lower 48 that probably do not have the best economics. Are airlines doing anything to replace these aircraft with more effienct 738s or 321s where possible? I know there are some transatlantics and HNL flights with 757s, but there are a lot of domesitc flights too.

How can UA, NW and AA generate profits with 757s when oil is so high, and if they can't what are they going to do about it? Surely they could retire some 757s and use the revenue to get more efficient aircraft, no?

i dont agree with your premise at all....per seat mile the 757 is more efficient than probably either the A320 or 738. Dont forget the 757 was designed in 1978 when there was a popular slogan in the pil patch of the US. "85 by 85!!!" It meant $85 per barrel by 1985. Nobody thought the price of oil woudl crash after 1982.


In fact the 757's efficiency worked against it for the first few years it was offerred. Airlines kept their 727s longer than anticipated when oil fell as low as $8 in 1986. Until 1988, when AA and UA ordered over 100 757s each, the 757 was quite a slow seller.

Quoting DLOnur (Reply 23):
My source did not specify AC types...only that we would be grounding AC to off set higher fuel prices. I doubt the the 752's will be the ones grounded.

Probably the MD-80s.

Quoting AF022 (Reply 25):
Oil in terms of Euros probably hasn't changed much at all, so I would assume AF/BA/LH have seen little change in their fuel costs while DL/AA/UA are getting hammered.

Oil priced in Euros had changed quite a bit as well.


2001 Oil $25 per barrell 1$ = 1.20 Euro so the Euro equivalent of oil was about $30
2007 Oil at $90 $1=.67 Euros, so the Euro equivalent would be about $60

Oil has nearly quadrupled in dolalr terms but it Euro terms it has still doubled.


For the weak US dollar to be the sole explanation of high oil, oil per barrel could be priced no higher than say $45-50
 
jacobin777
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RE: Will Carriers Ground 757s Due To Fuel Costs?

Fri Nov 30, 2007 3:35 pm



Quoting Viscount724 (Reply 11):

And some major traditional inbound markets to the US like Japan have been suffering from their own economic problems, resulting in a big drop in Japanese tourists to the US compared to a few years ago. That's not likely to change soon. And people in countries like China (including Hong Kong) and others in Asia and the Middle East etc. whose currencies are closely tied to the US Dollar don't suddenly find a trip the US cheaper than before.

...FWIW, there was a thread recently pointing to the fact tourism in America is at as high as it was in 2000, possibly even at record numbers...

Quoting Phishphan70 (Reply 14):
i fly on a 757 atleast 6-8 times a year on NW from SFO-DTW

..maybe you were on the NW-757 I was looking at out of the window... biggrin 

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Quoting Viscount724 (Reply 19):
But for carriers that don't need 757s for secondary routes to Europe and only fly them domestically, aren't the 737-800 or -900 (especially the -900ER) more economic options than the 757, being lighter and more fuel-efficient but still with adequate range for US transcontinental routes?

...how many US carriers have even purchased the -900ER? Most of the B757's by UA, AA, etc. are owned and as others have mentioned, the B757 are very efficient aircrafts on a per/seat basis. Also, there are some routes where neither the B73X nor the A32X could fly to (such as some of AA's South American Routes).

Quoting Futurecaptain (Reply 22):

The 757 still holds 10% more people then the 739 and is far more handy. Hot and high performance, faster speed, ect.

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ikramerica
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RE: Will Carriers Ground 757s Due To Fuel Costs?

Fri Nov 30, 2007 3:43 pm

running some simple numbers based on max range for single-class configuration (max) with max fuel, the 739ER is about 4% more efficient, but the 738 is about 8% less efficient than the 757.

Of course, this is on max length runs, which each aircraft having a different max range.

On shorter runs, the weight of the 757 vs. the 737NG is obviously a penalty, which is why you see carriers moving the 757 to transcons and TATL flights and using the 737NG for other flights. 757-200s are now only put on shorter flights within the USA for utilization purposes. (1000nm or less)

The 757-300 has no peer. CO and NW routinely use it on mid-length flights (1500nm) because as long as demand is there, it kicks efficiency butt! It's 7% more efficient than the 757-200, making it the most efficient narrowbody Boeing has made, including the 739ER which isn't even in service.

So the short answer is: airlines will ground just about every plane BUT the 757 before they start grounding the 757 due to fuel costs.  Smile

At Delta, the MD88 is way, way less efficient than the 757, for example. We are talking on the order of 20% less efficient. The MD88 is also far less efficient than their 738s, on the order of 25% (due to configuration).

If anything, you'll see DL parking MD88s. And it's one reason AA's fuel costs are so high, and one reason why AS is so eager to dump theirs.
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avek00
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RE: Will Carriers Ground 757s Due To Fuel Costs?

Fri Nov 30, 2007 4:13 pm



Quoting Lightsaber (Reply 3):
Sadly, high oil prices are going force consolidation in the industry.

1. Unless beaten by the 739, the 757 has the lowest CASM of any single-aisle aircraft flying.

2. High fuel costs won't be fixed by consolidation, so woe be unto the airline manager who contemplates such a damaging move to the company s/he manages on that basis.
Live life to the fullest.
 
ikramerica
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RE: Will Carriers Ground 757s Due To Fuel Costs?

Fri Nov 30, 2007 4:28 pm



Quoting Avek00 (Reply 35):
Unless beaten by the 739

Only the 739ER in theoretical 215 pax configuration beats the 752 with 228 seats.

In a more realistic configuration like CO's rumored 169 for the 739ER vs. their old 180 seat 752 (domestic F for comparison), it's 5-10% with no auxilary tanks, but of course the 757 has much better range/payload. Which is why CO will operate both instead of replacing 757s with 739ERs. Different missions.
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ScottB
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RE: Will Carriers Ground 757s Due To Fuel Costs?

Fri Nov 30, 2007 5:05 pm



Quoting AF022 (Reply 25):
Domestically, not at all, but international it hurts. Oil in terms of Euros probably hasn't changed much at all, so I would assume AF/BA/LH have seen little change in their fuel costs while DL/AA/UA are getting hammered.

Well, actually, it's not quite so simple. On the international routes, when refueling the aircraft in Europe, DL/AA/UA pay for fuel in euros. When refueling their aircraft in the USA, AF/BA/LH pay for fuel in dollars. The more important factor is the percentage of tickets that each airline is selling in euros vs. dollars, as well as the fares each manages to command. Moreover, as the DL/AF joint venture goes into effect, the two airlines will be sharing in the profits and losses incurred on the routes under the aegis of the joint venture, whether or not the flights are actually operated by Delta or Air France.

Quoting Ikramerica (Reply 34):
At Delta, the MD88 is way, way less efficient than the 757, for example.

 checkmark 

I can certainly see some MD-88's being parked temporarily with perhaps some frequencies being replaced by CRJ-900's during the slow parts of January and February. Delta is already paring mid-week flights (Tuesday/Wednesday) on some routes (BOS/BDL/JFK-Florida, for example) that typically see MD-88 service. Continental has used a similar mid-week strategy for years.

Quoting AF022 (Thread starter):
Surely they could retire some 757s and use the revenue to get more efficient aircraft, no?

How does an airline obtain revenue from retiring an aircraft?
 
Flighty
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RE: Will Carriers Ground 757s Due To Fuel Costs?

Fri Nov 30, 2007 5:14 pm

I dunno guys, the 757 is becoming a dinosaur outside of ETOPS roles where its strong performance 2900-3900 miles is needed.

For everything else, the 739ER kicks its booty. The A321 also is vastly preferable to the 757 on missions under 2500 miles or so. It burns a lot less fuel and weighs a lot less. This means the A321 is a higher "performance" aircraft in the financial sense, for many missions.

The 757 still has its place, but it is shrinking.
 
blueflyer
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RE: Will Carriers Ground 757s Due To Fuel Costs?

Fri Nov 30, 2007 5:35 pm



Quoting Jfk787nyc (Reply 8):
How exactly does the weak US Dollar hurt the United States Airline industry?

In several ways:
a) A weak US dollar tends to push oil prices up (all other things being equal, of course). Some oil producing countries, especially in the Middle East, peg their local currency to the dollar. If the dollar loses its value, so does their local currency against the euro or the pound for those all-important shopping trips to Paris or London. The easy answer is to raise the price of oil. Other producers do not peg their currency to the dollar, but still want to keep the same purchasing power in their local currency when selling oil, so again the answer is to raise the price of a barrel.
b) Tickets sold to the "millions upon millions" of tourists about to invade the Big Apple were sold in euros, pounds, rubles, etc... at prices competitive with those charged by foreign carriers, so as the dollar is weak, so is the revenue from tickets sold outside the US.
c) Many US carriers generate most of their profits on international flights where destination charges are levied in the local currency, most of which have appreciated against the dollar, while at the opposite end, foreign carriers pay their handling and landing charges in the US with a greenback that has become cheaper against their respective currency.

Bottom line: Weak Dollar = Higher Fuel Prices + Higher Costs (in terms of foreign currencies)
And in the competitive market that we're in, US carriers have very little pricing power against their foreign competitors, so they can't raise their fares much to offset this combination

Quoting ScottB (Reply 37):
How does an airline obtain revenue from retiring an aircraft?

I'm sure he meant the savings, not the revenue.
 
AirbusA6
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RE: Will Carriers Ground 757s Due To Fuel Costs?

Fri Nov 30, 2007 5:45 pm

Outside the US and a few European charters, the 757 is relatively rare now, for internal European operations, the A321 is more efficient, as distances are relatively low.

The engines on the 757 are a pretty old design, for example the RB211-535E4 entered service in 1984, and didn't change much in the next 20 years. One wonders whether a 757NG with newer engines would have generated enough interest to stay in production?
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ordpark
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RE: Will Carriers Ground 757s Due To Fuel Costs?

Fri Nov 30, 2007 5:53 pm

739 might win on a short flight, but the 757 will be more efficient on a longer segment. Besides, listened to 3 different
"experts" yesterday that said that oil will be in the "high $70s" in the near future.
 
atmx2000
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RE: Will Carriers Ground 757s Due To Fuel Costs?

Fri Nov 30, 2007 5:55 pm



Quoting Viscount724 (Reply 6):
Look at the many hundreds of 727s and DC-9s etc. that were quickly parked (many of which never flew again) in the major traffic slump after 9/11. The advantage now is that airlines have been able to make most fare increases stick to offset rising fuel prices. But at some point that will no longer work and further fare increases will cause a drop in demand. That's when you're going to see a lot of aircraft heading for the desert, and many orders for new aircraft cancelled/postponed. The soft US economy which many observers think is heading for recession, plus the weak US Dollar, won't help.

I suggest many observers will be wrong. I don't expect that the US economy won't head into recession because export growth will pick up the slack. 4.9% GDP growth in the previous quarter despite housing and credit issue reflects that. Now there will be a lot of problems in the sectors dependent on housing and the financing of housing. But the US economy is dynamic enough to deal with that. But I agree fuel pricing remains a major problem.

Quoting Viscount724 (Reply 11):
And some major traditional inbound markets to the US like Japan have been suffering from their own economic problems, resulting in a big drop in Japanese tourists to the US compared to a few years ago. That's not likely to change soon. And people in countries like China (including Hong Kong) and others in Asia and the Middle East etc. whose currencies are closely tied to the US Dollar don't suddenly find a trip the US cheaper than before.

The yen has appreciated recently against the dollar and is approaching levels seen in the late 90s, when peak tourism flow to the US from Japan occurred.

Quoting Viscount724 (Reply 11):
US airlines are also more severely affected by the high oil prices than carriers in countries whose currencies have been very strong (e.g. LH or other euro-based carriers) since those carriers aren't impacted as much by the high fuel prices since fuel is priced in US Dollars. They can thus hold off raising fares longer than US airlines, and if they don't increase their fares, US airlines operating on competitive routes can't either, putting a further squeeze on US airline profits.



Quoting AF022 (Reply 25):
Domestically, not at all, but international it hurts. Oil in terms of Euros probably hasn't changed much at all, so I would assume AF/BA/LH have seen little change in their fuel costs while DL/AA/UA are getting hammered.

While European airlines fuel costs have gone down in Euros, they are still paying the same absolute amount for fuel as US carriers. At the same time their labor costs in relation to US carriers have increased by about 50% since the beginning of the century. Thus on international routes the US airlines gains a cost advantage given the only absolute shifts have been in relative labor costs. However, they might be hurt if the shift in transatlantic passenger nationality to the EU also means relatively more business for EU carriers. However, it appears US carriers are doing well internationally, so I don't think that is the case.

The strong euro does help EU carriers on intra-EU routes as it keeps costs under control which helps maintain European customer demand. However, this is partially offset by reduction in intra-European tourism particularly from the US. The increased price of oil hurts US carriers on domestic routes due to reduced domestic demand with higher ticket prices. This is partially offset by increased European tourism.
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atmx2000
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RE: Will Carriers Ground 757s Due To Fuel Costs?

Fri Nov 30, 2007 6:02 pm



Quoting BlueFlyer (Reply 39):
b) Tickets sold to the "millions upon millions" of tourists about to invade the Big Apple were sold in euros, pounds, rubles, etc... at prices competitive with those charged by foreign carriers, so as the dollar is weak, so is the revenue from tickets sold outside the US.

You have it backwards. Selling in a foreign currency when it is appreciating generates more dollars.

Quoting BlueFlyer (Reply 39):
c) Many US carriers generate most of their profits on international flights where destination charges are levied in the local currency, most of which have appreciated against the dollar, while at the opposite end, foreign carriers pay their handling and landing charges in the US with a greenback that has become cheaper against their respective currency.

For a two way journey these costs remain the same for customers traveling on US or foreign carriers. The advantage the US gains is that their crew and maintenance personnel and facility costs are in US dollars while foreign carriers crew and maintenance facility costs are in appreciating foreign currency. Hence an absolute labor and facility cost advantage for US carriers.
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platinumfoota
Posts: 213
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RE: Will Carriers Ground 757s Due To Fuel Costs?

Fri Nov 30, 2007 6:34 pm

The airlines are doing something about Fuel Costs. Its called Fuel Surcharges, check your tickets.
Never forget United 93
 
acvitale
Posts: 1913
Joined: Sat Aug 18, 2001 8:25 am

RE: Will Carriers Ground 757s Due To Fuel Costs?

Fri Nov 30, 2007 6:41 pm



Quoting ScottB (Reply 37):
Well, actually, it's not quite so simple. On the international routes, when refueling the aircraft in Europe, DL/AA/UA pay for fuel in euros. When refueling their aircraft in the USA, AF/BA/LH pay for fuel in dollars. The more important factor is the percentage of tickets that each airline is selling in euros vs. dollars, as well as the fares each manages to command. Moreover, as the DL/AF joint venture goes into effect, the two airlines will be sharing in the profits and losses incurred on the routes under the aegis of the joint venture, whether or not the flights are actually operated by Delta or Air France.

Actually most airline fuel is sold under contract. Those contracts are largely in USD $$$ worldwide. This includes London, Johannesburg, Amsterdam etc etc etc.
 
ikramerica
Posts: 15081
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RE: Will Carriers Ground 757s Due To Fuel Costs?

Fri Nov 30, 2007 6:53 pm



Quoting AirbusA6 (Reply 40):
Outside the US and a few European charters, the 757 is relatively rare now.

No it isn't.

In the world the 757 is not relatively rare "now" as there are 1015+ of the 1050 delivered still flying. That actually means that in the last five years, the 757 is the MOST PREVALENT it ever was, since the fleet didn't even reach 1015 worldwide deliveries until 2002.  Wink

600 or so have been delivered to USA airlines, but that isn't a phenomenon that is recent. The 757 has always been popular in the USA because it was tailor made for our markets by Boeing. But 400+ are flying around the world, with 90+ other airlines. That's about the same number of A321s delivered so far...

It's funny how reality trumps perception.

The only reason it might seem the 757 is "rare" to you specifically is that the A321 has become much more common in the EU as the EU has moved en masse away from Boeing narrowbodies for the most part. The A321 is taking over the EU "domestic" just as the A320 is taking over there, and the A319 and even the A318 for various reasons (many of them political as well as financial).
Of all the things to worry about... the Wookie has no pants.
 
User avatar
hotelbravo
Posts: 90
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RE: Will Carriers Ground 757s Due To Fuel Costs?

Fri Nov 30, 2007 6:59 pm

Just out of curiosity, does anyone know how much worse the economics of a re-engined DC-8-70 with CFM engines are compared those of a 757-200? Judging by how long the DC-8s have lasted with cargo carriers, it seems we can expect to see cargo 757s for at least another 20 years...
 
Boeingluvr
Posts: 347
Joined: Mon Jun 18, 2007 1:56 am

RE: Will Carriers Ground 757s Due To Fuel Costs?

Fri Nov 30, 2007 7:04 pm

As last I heard, airlines wanted to find more 757's due to their efficiency and performance. I'm pretty sure airlines can't get their hands on them enough.
 
blueflyer
Posts: 4352
Joined: Tue Jan 31, 2006 4:17 am

RE: Will Carriers Ground 757s Due To Fuel Costs?

Fri Nov 30, 2007 7:04 pm



Quoting Atmx2000 (Reply 43):
You have it backwards. Selling in a foreign currency when it is appreciating generates more dollars.

Duh. Sorry.

Quoting Atmx2000 (Reply 43):
For a two way journey these costs remain the same for customers traveling on US or foreign carriers. The advantage the US gains is that their crew and maintenance personnel and facility costs are in US dollars while foreign carriers crew and maintenance facility costs are in appreciating foreign currency. Hence an absolute labor and facility cost advantage for US carriers.

I'll have to disagree with you. Airlines labor costs are not directly affected by currency fluctuations. However much cabin crews from US carriers earn has nothing to do with the strength, or weakness of one currency against the other. Landing and handling expenses are generally paid for in the local currency, on the other hand, as well as "ancillary" charges such as crew accommodations and transport, local sales office expenses, etc... If local sales in local currency aren't enough to cover these expenses in local currency, US carriers will have to make up the difference by converting US dollars at a less-than-advantageous exchange rate, whereas European carriers that also find themselves obligated to convert euros into US dollars to cover destination expenses will benefit from a very generous exchange rate.

While I don't remember the exact figures, I did read a study fairly recently that claimed that the proportion of "native" passengers is much higher on US carriers than European and Asian carriers, so if true, it would be far more likely that US carriers wouldn't be able to cover their costs with local ticket sales in Europe, than have European carriers run into the same problem in the US. That makes US carriers far more at a disadvantage over a weak dollar, than European carriers would be if/when afflicted with a weak euro (speaking strictly about foreign revenues and foreign expenses - a weak euro would make fuel much more expensive for European carriers).

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