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MD80
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Blue1 /SAS Finland To Cut B717-fleet By Four

Thu Jun 19, 2014 8:58 pm

The CEO of Blue1 / SAS Finland told to the press that the nine-strong Boeing 717-fleet will be cut by four aircraft. Up to 160 employees are in danger of losing their jobs. Sources claim the lack of demand and the financial losses of parent SAS Scandinavian Airlines as the main reasons for this drastic reduction.

Here are two Finnish sources (in Finnish language):

http://www.taloussanomat.fi/liikenne...ta-ulos/20148680/12?pos=tuoreimmat

http://svenska.yle.fi/artikel/2014/0...dlar-varannan-anstalld-i-riskzonen
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RE: Blue1 /SAS Finland To Cut B717-fleet By Four

Thu Jun 19, 2014 9:37 pm

Interesting. 717s are hot property, who would like them? DL, HA, QF even?
 
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MD80
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RE: Blue1 /SAS Finland To Cut B717-fleet By Four

Thu Jun 19, 2014 9:47 pm

Additional 717s or no additional 717s: That is the question!  

You mentioned exactly the three airlines that come into my mind. QF seems to be very happy with the 717 but I think that QF is looking at a replacement of the 717 when the arrangement with Cobham expires in 2018 I think.

I am not aware of Hawaiian´s plans to get additional 717s. Delta seems (to me at least) a potentially interested airline.

What about Volotea Airlines? Their original plan was a bigger Boeing 717-fleet.
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RE: Blue1 /SAS Finland To Cut B717-fleet By Four

Thu Jun 19, 2014 10:00 pm

Quoting MD80 (Reply 2):

QFLink is expanding (I think because of a lower cost base), and have only recently taken 5 extras. I havent seen anything in the public domain that is talking about what they will do after the 717, and the Aussie board hasnt seen any significant discussion on it either. Also, its other regional jet subsidiary Network Aviaiton was mentioned as getting an RPT license so for product commonality (as id assume they would fly under QFLink titles on RPT service), perhaps some 717s wouldnt hurt. QF is capital restricted at the moment but if leased through Cobham this mightnt be an issue.

Im afraid i dont know enough about the other airlines to comment educatedly!
 
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RE: Blue1 /SAS Finland To Cut B717-fleet By Four

Thu Jun 19, 2014 10:03 pm

Quoting QF2220 (Reply 1):
Interesting. 717s are hot property, who would like them? DL, HA, QF even?

They are the logical contenders... If all three really want them then I wonder what kind of price they could be worth? If only there was as much potential interest in the TG 345s  
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RE: Blue1 /SAS Finland To Cut B717-fleet By Four

Thu Jun 19, 2014 10:27 pm

Quoting QF2220 (Reply 3):
QFLink is expanding (I think because of a lower cost base), and have only recently taken 5 extras. I havent seen anything in the public domain that is talking about what they will do after the 717, and the Aussie board hasnt seen any significant discussion on it either. Also, its other regional jet subsidiary Network Aviation was mentioned as getting an RPT license so for product commonality (as id assume they would fly under QFLink titles on RPT service), perhaps some 717s wouldnt hurt. QF is capital restricted at the moment but if leased through Cobham this mightnt be an issue.

Thanks for your insight look into Australian aviation. Personally I would be very pleased to see the 717 in QF-livery for many years to come. The 717 had a small beginning with Impulse Airlines many years ago and it is always nice to see photos of 717s making their duties in Australia.  
Quoting 777Jet (Reply 4):
If all three really want them then I wonder what kind of price they could be worth?

Maybe Delta is thinking: "One day all 717s will be part of Delta, no hurry to pay too much"

Quoting 777Jet (Reply 4):
If only there was as much potential interest in the TG 345s  

That´s a very special case
  
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RE: Blue1 /SAS Finland To Cut B717-fleet By Four

Thu Jun 19, 2014 10:32 pm

Delta would love the four 717s, especially if they're not too used up and Delta can quickly assimilate them into their own fleet. While the CR2 is a sleek looking aircraft, it is one of the most cramped out there, and I would rather be on a DL 712 even in Y.

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MD80
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RE: Blue1 /SAS Finland To Cut B717-fleet By Four

Thu Jun 19, 2014 10:40 pm

Quoting LPDAL (Reply 6):
Delta would love the four 717s, especially if they're not too used up and Delta can quickly assimilate them into their own fleet.

I also think that Delta would be able to quickly assimilate four additional 717s due to their vast schedule and network/opportunities to optimize their ops.

But back to Blue1 / SAS Finland: IMO it´s only a matter of time that the remaining five 717s are also available for other airlines. In early May 2014, Blue1 officially confirmed that the airline is looking for a replacement of their 717s and they will be retired when the leases expire. The reduction if four aircraft is a big downsizing due to the rather small size of the airline. It´s sad that there seems to be no healthy demand to justify the use of nine Boeing 717s.
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RE: Blue1 /SAS Finland To Cut B717-fleet By Four

Thu Jun 19, 2014 10:45 pm

The interesting thing with the 717 is; apart from the scrapped  prototype all other 155 built aircraft are flying now with 7 airlines ... none scrapped, none waiting for a buyer, none crashed (knock on wood).
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RE: Blue1 /SAS Finland To Cut B717-fleet By Four

Thu Jun 19, 2014 11:17 pm

Quoting MEA-707 (Reply 8):
The interesting thing with the 717 is; apart from the scrapped  prototype all other 155 built aircraft are flying now with 7 airlines ... none scrapped, none waiting for a buyer, none crashed (knock on wood).

Thanks for this interesting fact! I feel also very glad that the 717 shows a perfect safety-record and that all 717s are in active service. Sometimes I not not aware of the status of the 717s of Turkmenistan Airlines but this is another topic.
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RE: Blue1 /SAS Finland To Cut B717-fleet By Four

Fri Jun 20, 2014 12:31 am

Quoting QF2220 (Reply 1):
717s are hot property, who would like them? DL, HA, QF even?

Maybe, but HA and QF showed no interest in the 717s that WN inherited from FL, did they? In fact, WN is paying to bring them up to DL's standards per the leasing agreement with DL because there was no interest from any other airline and DL knew how much WN wanted to get rid of them.
 
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RE: Blue1 /SAS Finland To Cut B717-fleet By Four

Fri Jun 20, 2014 12:57 am

Quoting MD80 (Thread starter):

The CEO of Blue1 / SAS Finland told to the press that the nine-strong Boeing 717-fleet will be cut by four aircraft. Up to 160 employees are in danger of losing their jobs. Sources claim the lack of demand and the financial losses of parent SAS Scandinavian Airlines as the main reasons for this drastic reduction.

Sadly, I think the remaining five frames will incur the same fate in the next 1-2 years. Is it true that the ex-Olympic frames will be among those that are cut?


Quoting MD80 (Reply 2):
QF seems to be very happy with the 717 but I think that QF is looking at a replacement of the 717 when the arrangement with Cobham expires in 2018 I think.
Quoting QF2220 (Reply 3):
QFLink is expanding (I think because of a lower cost base), and have only recently taken 5 extras

I can see QF submitting an RFQ for a moderate ~5 year lease, perhaps through Cobham. But I think that PA (lessor) will shop for longer lease agreements (most likely) or potential outright purchases - if the price is mutually beneficial.

Quoting MD80 (Reply 2):
I am not aware of Hawaiian´s plans to get additional 717s.

I would put them lower on the list and only if it falls into their lap at a "can't miss" price.

Quoting MD80 (Reply 2):
What about Volotea Airlines? Their original plan was a bigger Boeing 717-fleet.

I honestly have my doubts that this carrier is able to generate the yields to warrant additional aircraft. I see them eventually falling into survival mode unless things change, unfortunately.

Quoting LPDAL (Reply 6):
Delta would love the four 717s, especially if they're not too used up and Delta can quickly assimilate them into their own fleet.

Ding ding! I think these aircraft are DL's to lose. If DL pass on them, it would indicate that 88 frames are enough for their near-term plans. IMO, a fleet of ~120 is likely down the road.
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RE: Blue1 /SAS Finland To Cut B717-fleet By Four

Fri Jun 20, 2014 1:02 am

Quoting TPA0822 (Reply 10):
but HA and QF showed no interest in the 717s that WN inherited from FL, did they?

That's because WN was only shopping them as an "all or none" scenario. WN were unwilling to deal at granular levels of 5-10 frames.
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RE: Blue1 /SAS Finland To Cut B717-fleet By Four

Fri Jun 20, 2014 1:07 am

Quoting TrijetsRMissed (Reply 12):
That's because WN was only shopping them as an "all or none" scenario. WN were unwilling to deal at granular levels of 5-10 frames.

Makes sense. Thanks.
 
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RE: Blue1 /SAS Finland To Cut B717-fleet By Four

Fri Jun 20, 2014 2:39 am

Quoting TPA0822 (Reply 10):
Maybe, but HA and QF showed no interest in the 717s that WN inherited from FL

QF took the 5 frames after that deal and has been increasing their use by QLink, including changing all HBA flights to QLink.

DL has only just started inducting the 717s into the fleet correct? Do they really know how they are going and if they could use more?

Though on another hand, surely if this has been announced now some work has already been done to find new homes for these frames?
 
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RE: Blue1 /SAS Finland To Cut B717-fleet By Four

Fri Jun 20, 2014 2:56 am

Quoting TPA0822 (Reply 10):
HA and QF showed no interest in the 717s that WN inherited from FL, did they?

I don't think they were offered? I though part of the attraction for WN was getting rid of all of them in one transaction. Neither HA nor QF could ever use 88 frames.

Quoting TrijetsRMissed (Reply 11):
I can see QF submitting an RFQ for a moderate ~5 year lease

Sounds about right. If they wanted them, which I think they would, I would expect QF to get them. Beyond the 5 new frames, there is talk about Network flying F100s as QLink in WA, and Air North is about to start flying E70s at QLink in NT. Those additional 717s that are being freed up are presumably moving to the East Coast (be it for CBR or BNE). QLink can't seem to grow fast enough at the moment.

The unknown question is how much DL are willing to pay. We obviously don't know the details, but it appears they got a steal from WN. DL's strategy isn't buying up old aircraft for the sake of it, but rather getting lightly used aircraft at bargain-basement prices. If even one other carrier was interested, the lease rates would go up in a competitive situation.

Quoting MD80 (Reply 2):
QF seems to be very happy with the 717 but I think that QF is looking at a replacement of the 717 when the arrangement with Cobham expires in 2018 I think.

I've said this before, but IMHO they will roll over a 5 year extension to 2023. That would put the 717s at around the 20 year mark, and means that QF can defer the decision (read: capital) on the replacement to the end of this decade. Obviously tha gives them the opportunity to assess both the C-Series and E2 once they enter commercial service, but more importantly means that they can defer capital spending. QF is currently trying to actively pay down debt and conserve capital, and after 2016 the priority is going to be a final decision on the 787 and a 747 replacement (presumably the A380s that have been deferred to 2019, but they might yet be cancelled). The short haul fleet (both 717s and 737s) is all circa 2000 or later, so that decision can be easily postponed to not burn up too much capital in one go.

[Edited 2014-06-19 20:01:05]
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RE: Blue1 /SAS Finland To Cut B717-fleet By Four

Fri Jun 20, 2014 3:00 am

Quoting QF2220 (Reply 14):
QF took the 5 frames after that deal and has been increasing their use by QLink, including changing all HBA flights to QLink.
QF is also rumoured to have more plans for Network in the RPT space over in WA, as well as a number of the WA flights being upgauged to 737s. That basically leaves NT services (pretty unlikely), east coast all-Y (but how much more can they do with 717s) or additions to the JY fleet. I'd put the latter as the most likely option for QF with 4 additional frames. I respectfully disagree with RyanairGuru's assertion in the Aussie thread that ADL/CBR to HBA would be JQ routes, I believe these (if started) would be Q400s. So I believe they could use some more 717s to up CBR to BNE/MEL, maybe HBA to MEL/SYD and possibly to pick up some thinner services to ADL (BNE/MEL/SYD).

Quoting QF2220 (Reply 14):
DL has only just started inducting the 717s into the fleet correct? Do they really know how they are going and if they could use more?

They did take on 88 in one go, so they must have some level of confidence that they can deploy them effectively. Surely another 4 wouldn't be a big deal for them to work in.

[Edited 2014-06-19 20:01:56]
 
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RE: Blue1 /SAS Finland To Cut B717-fleet By Four

Fri Jun 20, 2014 3:10 am

Quoting RyanairGuru (Reply 15):
and Air North is about to start flying E70s at QLink in NT

Whats this one about RG?
 
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RE: Blue1 /SAS Finland To Cut B717-fleet By Four

Fri Jun 20, 2014 3:17 am

Quoting QF2220 (Reply 17):
Whats this one about RG?

Take a look at Aus Av, they're taking over the Top End flights between Darwin, Gove and Cairns. Whether that will be expanded to DRW-ASP is unclear at this point.
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RE: Blue1 /SAS Finland To Cut B717-fleet By Four

Fri Jun 20, 2014 3:28 am

Quoting RyanairGuru (Reply 18):
Take a look at Aus Av, they're taking over the Top End flights between Darwin, Gove and Cairns. Whether that will be expanded to DRW-ASP is unclear at this point.

The route is being flown by Airnorth in its own right, not as Qlink. N.B. Qlink will continue to fly the direct carins-darwin flights, just not the one via gove. DRW-ASP is a pretty strong market and 717s are a good size for the route.
 
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RE: Blue1 /SAS Finland To Cut B717-fleet By Four

Fri Jun 20, 2014 3:36 am

Quoting TPA0822 (Reply 10):

Maybe, but HA and QF showed no interest in the 717s that WN inherited from FL, did they?

HA is a small niche airline that only recently (say in the last decade or even 20 years) decided to go international, they would have no use, logistical infrastructure, or space to store 88 712s. Not to mention the red tape and logistical nightmare it would be to get almost ninety airframes to the tiny islands.

DL, on the other hand, is a massive airline that used to have heavy reliance on CR2s before Comair went bankrupt and a good chunk of their CR2s needed to be replaced due to routes being cut. In addition, DL has a large fleet of MD-88s, MD-90s, and used to have a small(er) fleet of elderly DC-9s before they were retired last year (thankfully, DL kept one to act as a gate guard in ATL at their heritage museum). And the MD-88 and MD-90 captains/first officers can easily be trained to operate the 712 in less than a month

I don't know much about the load factors on European "domestic" routes (when I say domestic, I am referring to short/midhaul routes within the European continent), but I remember reading somewhere that flights never go out 100% full as much as they do here in the States (maybe this is due to the popularity and ubiquity of cheap and efficient rail travel). In addition, costs are much higher in Europe, and inefficient A/C have been hitting the backburner in Europe for years. Again, I don't know much about the economics, but I do know that fuel prices in the EU are much higher than here in America.

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RE: Blue1 /SAS Finland To Cut B717-fleet By Four

Fri Jun 20, 2014 3:36 am

Quoting jrfspa320 (Reply 19):
DRW-ASP is a pretty strong market and 717s are a good size for the route.

QF1935 and QF1938 are extensions of PER-ASP vv. and I dare say aren't going anywhere. They're also both pretty full most days. From what I understand, QF1939 and QF1936 (the terminating DRW-ASP vv.) are also quite full so QLink aren't likely to pull those either.
 
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RE: Blue1 /SAS Finland To Cut B717-fleet By Four

Fri Jun 20, 2014 4:04 am

Quoting QF2220 (Reply 14):
DL has only just started inducting the 717s into the fleet correct?

The 717 has been an active fleet type at DL for approx. eight months. Currently there are ~30 frames in the active fleet; or about 1/3 of the ex-FL fleet on-boarded for active service.

Quoting QF2220 (Reply 14):
Do they really know how they are going and if they could use more?

FWIW, it was acknowledged at an IR conf that 717 profit margins trippled that of the departed D95s on equal missions. Also, keep in mind DL had 16 months or so to plan and strategize the 717 implementation, before the type's EIS with the company. I'm sure they have a pretty good idea at this point.


Quoting RyanairGuru (Reply 15):
he unknown question is how much DL are willing to pay. We obviously don't know the details, but it appears they got a steal from WN. DL's strategy isn't buying up old aircraft for the sake of it, but rather getting lightly used aircraft at bargain-basement prices. If even one other carrier was interested, the lease rates would go up in a competitive situation..

  True. But if we assume that the only interested parties will be existing operators, then the competition level shouldn't fluctuate the price significantly, IMO. To break it down:

1) Volotea can not afford to bid agressively, and are unlikely to add additional capacity if they're not able to fill their current fleet.

2) HA may only be interested if it's a steal, as they don't need the extra lift of 4 frames. I could be wrong but I think it's a bit too early to start buying extra 717s as subs/spares or for part-out supply. Later this deacde perhaps, but prob not when the fleet is less than 50% through their FC limits.

3) T5 is a bit dubious. It was only a few weeks ago that EZ-A101 was re-activated after spending a year-plus in storage at ARN. AFAIK, T5 showed no interest in the ex-YX aircraft and conceivably could standardize on 73G/738s in the coming years.

That leaves only QF and DL. QF are unlikely to overpay for a short/mid-term solution. DL do like opportunistic acquisitions, and I see these aircraft fitting the bill even if there is mild interest from other operators.

Quoting DeltaB717 (Reply 16):
That basically leaves NT services (pretty unlikely), east coast all-Y (but how much more can they do with 717s) or additions to the JY fleet. I'd put the latter as the most likely option for QF with 4 additional frames.

From all accounts, it seems QF have been rather pleased with the 717 and have used them effectively. That said, IIRC the operator has avoided committing to the type long-term. Do you think QF will operate 18+ 717s into the 2020s or will replacements begin arriving later this decade? Personally, I believe the latter.
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RE: Blue1 /SAS Finland To Cut B717-fleet By Four

Fri Jun 20, 2014 6:15 am

Quoting TrijetsRMissed (Reply 22):
Do you think QF will operate 18+ 717s into the 2020s or will replacements begin arriving later this decade? Personally, I believe the latter.

As I said in reply 15, I err on the side of the former. It is no secret that QF are struggling financially right now, and they have been clear that for the next several years they intend to conserve capital and pay down debt. Once they start spending again they with have the 787 deliveries imminent (if they decide to take them) and the A380s in 2019. I personally believe they will take the remaining A380s as 747 replacements, but if they don't they would need something else like a 78J or 350 to fill that role. Given that the 717s and 737s won't even be 20 years old, and would still have a good 5 plus years of service left in them, I expect them to kick that can down the road. A C-Series/E2 and MAX/NEO order is likely maybe in 2018-2020 for 2020-2022 initial deliveries IMHO.

This is just my opinion, reading between the lines of what QF have said, so I could be very wrong.

Quoting TrijetsRMissed (Reply 22):
HA may only be interested if it's a steal, as they don't need the extra lift of 4 frames

I doubt that HA are interested, and my reasoning is their A321 order. With other carriers flying from the West Coast to the Outer Islands, HA's HNL hub isn't as relevant as it has been in the past. The future of Hawaii flying is definitely in narrow bodies flying non-stop to LIH, OGG, KOA, even ITO, rather than wide bodies to HNL with a connecting flight. HNL will continue to be a vitally important destination in its own right, but HA seem to have realised that they're not as competitive as they once were. By moving into this market themselves, they will be somewhat cannibalising their Inter-Island network. I'm not saying there will be cuts to their current flying program, and indeed the AT4s should allow for some expansion, but I don't see much need for more Inter-Island jet service.

Quoting TrijetsRMissed (Reply 22):
T5 is a bit dubious

I personally don't think that they're even a contender.

Quoting TrijetsRMissed (Reply 22):
That leaves only QF and DL.

Agreed.

Quoting TrijetsRMissed (Reply 22):
QF are unlikely to overpay for a short/mid-term solution. DL do like opportunistic acquisitions, and I see these aircraft fitting the bill even if there is mild interest from other operators.

Ultimately I can see QF being willing to pay more than DL but for a shorter lease, while DL is less likely to be willing to pay market rates but would take the aircraft for a longer lease, and possibly buy it when the lease is up. Ultimately it is for the lessor to decide which of those alternatives is more valuable for them. Personally, I'd lease to QF for 5 years, and then try and sell to DL  
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RE: Blue1 /SAS Finland To Cut B717-fleet By Four

Fri Jun 20, 2014 6:27 am

Quoting RyanairGuru (Reply 23):
Quoting TrijetsRMissed (Reply 22):T5 is a bit dubious
I personally don't think that they're even a contender.

I'd be less surprised to see T5's current 717s end up somewhere else, than to see T5 take more 717s.

Quoting RyanairGuru (Reply 23):
Given that the 717s and 737s won't even be 20 years old, and would still have a good 5 plus years of service left in them, I expect them to kick that can down the road.

I'm with you on that... replacing the 717s is by far one of their lower fleet priorities in the near term. In fact, as has been pointed out, the 717s aren't a bad choice to replace Network's F100s. Possibly from 2018 we'll see Network as the 717 service provider for QantasLink, replacing Cobham in that role.

I personally think it's an each way bet between QF and DL, likely coming down to 'who blinks first'.
 
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RE: Blue1 /SAS Finland To Cut B717-fleet By Four

Fri Jun 20, 2014 7:41 am

Quoting RyanairGuru (Reply 23):
As I said in reply 15, I err on the side of the former. A C-Series/E2 and MAX/NEO order is likely maybe in 2018-2020 for 2020-2022 initial deliveries IMHO.

I actually think we're on the same page. Retirements starting in 5 years or so with a likely replacement identified, and complete phaseout in the early 2020s.

Quoting RyanairGuru (Reply 23):
I doubt that HA are interested, and my reasoning is their A321 order.

Yes, more direct point-to-point reduces the need to funnel everything through HNL. I do think HA will eventually look for additional aircraft as a source of parts and/or replacement for their own higher cycle 717s. Just not now.

Quoting RyanairGuru (Reply 23):
Personally, I'd lease to QF for 5 years, and then try and sell to DL  

You never know! Like you said, it depends on what the lessor finds more valuable.

Quoting DeltaB717 (Reply 24):
I'd be less surprised to see T5's current 717s end up somewhere else, than to see T5 take more 717s.

Agreed.

Quoting DeltaB717 (Reply 24):
I personally think it's an each way bet between QF and DL, likely coming down to 'who blinks first'.

I would be very surprised if these 717s wind up anywhere else.
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aerosol
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RE: Blue1 /SAS Finland To Cut B717-fleet By Four

Fri Jun 20, 2014 12:19 pm

A bit of topic: on which leg can I fly these blue1 birds for sure - I know they fly them to DUS, but not on a regular basis.
 
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RE: Blue1 /SAS Finland To Cut B717-fleet By Four

Fri Jun 20, 2014 12:47 pm

Quoting Aerosol (Reply 26):
A bit of topic: on which leg can I fly these blue1 birds for sure - I know they fly them to DUS, but not on a regular basis.

SAS routes from HEL, such as ARN, OSL and CPH are rather safe bets for getting the 717
 
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RE: Blue1 /SAS Finland To Cut B717-fleet By Four

Fri Jun 20, 2014 1:16 pm

Going slightly off topic (but still on 717s), are they all essentially the same aircraft from an engineering persepcetive (ie engines, avionics, spares etc etc) with minor customisation differences across carriers? As in, are there sub models within the global fleet, or are they pretty much homogenous? I exclude the on board product of course from this question.
 
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RE: Blue1 /SAS Finland To Cut B717-fleet By Four

Fri Jun 20, 2014 3:34 pm

Quoting TrijetsRMissed (Reply 12):
That's because WN was only shopping them as an "all or none" scenario. WN were unwilling to deal at granular levels of 5-10 frames.

Remeber WN is sub-leasing them. It would be big headache for WN sublease to multiple airlines so thats why they may have wanted the all or none scheme.
 
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RE: Blue1 /SAS Finland To Cut B717-fleet By Four

Fri Jun 20, 2014 4:25 pm

Thanks for all your replies!

Quoting TrijetsRMissed (Reply 22):
From all accounts, it seems QF have been rather pleased with the 717 and have used them effectively.

After the integration of Impulse Airlines, I had my fear that Qantas would decide very quickly that the 717 is no longer viable. I was surprised that Qantas talked in a very positive way shortly after    .

Here is a nice photo for all of you. It shows an Impulse Airlines Boeing 717 in the original livery:

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RE: Blue1 /SAS Finland To Cut B717-fleet By Four

Fri Jun 20, 2014 8:29 pm

Quoting LPDAL (Reply 20):

DL, on the other hand, is a massive airline that used to have heavy reliance on CR2s before Comair went bankrupt and a good chunk of their CR2s needed to be replaced due to routes being cut

IMHO, this is the key to the answer. DL customers have been very vocal in their dislike of the CR2's and DL seriously wants them gone. On the other hand if this group of 717's is asking a premium price thinking that DL will pay any amount to acquire them they are dead wrong. DL went with the WN deal because it was a package deal for 88 frames and WN footed the bill for the upgrades.

And there are still a handful of MD90's out there!

If DL could cut a deal for the ENTIRE fleet from Blue1 they would probably jump on them.

[Edited 2014-06-20 13:30:25]

[Edited 2014-06-20 13:31:30]
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MD80
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RE: Blue1 /SAS Finland To Cut B717-fleet By Four

Fri Jun 20, 2014 8:36 pm

Quoting DTWPurserBoy (Reply 31):
If DL could cut a deal for the ENTIRE fleet from Blue1 they would probably jump on them.

Without having detailed information, I think that a deal by Delta to take the entire fleet would be a very good solution and could ensure a long life for these nine aircraft. The addition of nine aircraft would result in a staggering fleet of 97 Boeing 717 - wow!
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Ideekay
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RE: Blue1 /SAS Finland To Cut B717-fleet By Four

Fri Jun 20, 2014 8:36 pm

I wonder what SAS is doing with Blue1 .. maybe SAS will get rid of the brand Blue1, which I don't hope of course.
I'd hope that they will get some new planes for them.

[Edited 2014-06-20 13:37:12]
 
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MD80
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RE: Blue1 /SAS Finland To Cut B717-fleet By Four

Fri Jun 20, 2014 9:23 pm

In early May 2014, the CEO of Blue1 confirmed plans to replace the Boeing 717-fleet with the aim to be more flexible capacity-wise. I am not aware of the plans of SAS with Blue1/SAS Finland. It would be nice to read more information about the plans of SAS.
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RE: Blue1 /SAS Finland To Cut B717-fleet By Four

Fri Jun 20, 2014 9:58 pm

Quoting ideekay (Reply 33):
I wonder what SAS is doing with Blue1 .. maybe SAS will get rid of the brand Blue1

I believe the brand Blue1 will disappear, it's already converted to a production company, Mama-SAS have taken over responsibility for all commercial operations in Finland.
 
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MD80
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RE: Blue1 /SAS Finland To Cut B717-fleet By Four

Fri Jun 20, 2014 10:09 pm

Quoting HELyes (Reply 35):
I believe the brand Blue1 will disappear, it's already converted to a production company, Mama-SAS have taken over responsibility for all commercial operations in Finland.

Is there a reason why the brand of Blue1 is still in use after conversion into a "production company". IMO it would be more logical to use only one brand in public and on airplanes - SAS.

Earlier I thought that Blue1´s fleet would be repainted with a small sticker attached: "Operated by Blue1 for SAS Scandinavian Airlines" or something like that.
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TrijetsRMissed
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RE: Blue1 /SAS Finland To Cut B717-fleet By Four

Sat Jun 21, 2014 6:50 am

Quoting infiniti329 (Reply 29):
Remeber WN is sub-leasing them.

Of course they are. FL didn't own 88 717s... how else was DL going to acquire them? Remember that DL have a 7-year lease extension directly from Boeing, after the last of WN sub-leases expires in 2024.

Quoting infiniti329 (Reply 29):
It would be big headache for WN sublease to multiple airlines so thats why they may have wanted the all or none scheme.

A big headache? No. Airlines have teams within Procurement and PM that handle situations just like this. Asset management and vendor/partner specialists. It's their job. And quite frankly, it would not take the bandwidth of a significant number of FTEs.   

But sub-leasing to multiple carriers does not jive with a plan to phaseout the fleet completely. The only way to accomplish that for an orphan type like the 717 is one major "all-in" deal. Otherwise you would have WN sub-leasing groups of 5-10 frames to maybe 2-4 carriers, at most. Which would still leave WN with 50+ 717s on their hands...Creating a weaker economies of scale - for a new prospective party and themselves.

To be honest, the perceived extra work multiple sub-lease agreements would create is a moot point.

Quoting MD80 (Reply 30):
I was surprised that Qantas talked in a very positive way shortly after

It would have been interesting if QF had ordered the MD-95 or 717 as a NB, and if other carriers would have taken notice, given their respected status.

Quoting DTWPurserBoy (Reply 31):
And there are still a handful of MD90's out there!

If DL pass on the BR/B7 frames, it may further support a Blue1 717 acquisition.

Quoting MD80 (Reply 32):
The addition of nine aircraft would result in a staggering fleet of 97 Boeing 717 - wow!

I remember when two MD-95/717 clients were projected to EACH take delivery of 100 aircraft, (FL and TW). And then there was the vetoed US order for another 100 on top of that...  
Quoting HELyes (Reply 35):
I believe the brand Blue1 will disappear,

Seems logical to standardize the brand on SK.
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RE: Blue1 /SAS Finland To Cut B717-fleet By Four

Sat Jun 21, 2014 9:18 pm

Quoting TrijetsRMissed (Reply 37):
Of course they are. FL didn't own 88 717s... how else was DL going to acquire them? Remember that DL have a 7-year lease extension directly from Boeing, after the last of WN sub-leases expires in 2024.

While I certainly have not seen the contract it is usual that there is a provision for the carrier (in this case DL) to have the opportunity to purchase the aircraft as it comes off lease. They have done this numerous times, most recently with some 757 aircraft.

I would assume after a certain period of time they are considered fully depreciated.

Any a.netters have some inside knowledge on how these deals are structured and what type of cost the airline pays to buy the frame off lease?
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RE: Blue1 /SAS Finland To Cut B717-fleet By Four

Sun Jun 22, 2014 2:11 am

Quoting DTWPurserBoy (Reply 38):
While I certainly have not seen the contract it is usual that there is a provision for the carrier (in this case DL) to have the opportunity to purchase the aircraft as it comes off lease.

Yes, but not while it is sub-leased. Maybe BCC will want to remove itself from ownership responsibility and agree to sell to DL during the 7-year direct lease extension period. However, that would be more likely if BCC's catalog was not primarily 717s. Rather, the 717s will likely be purchased by DL as they come off of lease from BCC beginning in 2024, IMO.


Quoting DTWPurserBoy (Reply 38):
Any a.netters have some inside knowledge on how these deals are structured and what type of cost the airline pays to buy the frame off lease?

Yes. The leasing company will structure a deal by taking the full list price at YOM, less the depreciation. For a plane like the 717, the airline will counter with a fair market value estimate, based on the aircraft's vintage and FC/FH numbers. If the plane had a less than stellar MX log, that would be exploited as well. They will meet somewhere in the middle, with the nod slightly in the airline's favor.
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RE: Blue1 /SAS Finland To Cut B717-fleet By Four

Sun Jun 22, 2014 3:39 am

Quoting TrijetsRMissed (Reply 22):
FWIW, it was acknowledged at an IR conf that 717 profit margins trippled that of the departed D95s on equal missions. Also, keep in mind DL had 16 months or so to plan and strategize the 717 implementation, before the type's EIS with the company. I'm sure they have a pretty good idea at this point.

That's a really interesting fact. Triple profits with the newest DC-9 versus the oldest one.

Quoting MEA-707 (Reply 8):

The interesting thing with the 717 is; apart from the scrapped  prototype all other 155 built aircraft are flying now with 7 airlines ... none scrapped, none waiting for a buyer, none crashed (knock on wood).

Also an interesting fact. They must be very reliable and safe. If none has been scrapped for parts, it means their value on the used market is higher than the value of their parts. And it also means Boeing (and subcontractors) still produce replacement parts for them.

I wish this bird was still manufactured. There's obviously a market for them. But I have a suspicion it's about the same story as with the 757, they both went out of production around the same time.. at a low time for air travel and probably very little demand for new frames. Now 10 years later they both seem really popular again.
 
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RE: Blue1 /SAS Finland To Cut B717-fleet By Four

Sun Jun 22, 2014 3:49 am

I have a gut feeling these 717's will going to DL. Wiki shows Qantas link ordering additional used frames but wiki information isn't correct always. So my gut says DL as they could use them to bring the fleet to 92.

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RE: Blue1 /SAS Finland To Cut B717-fleet By Four

Sun Jun 22, 2014 4:26 am

Delta Air Lines will be willing to acquire more B717s if the price is right and the aircraft are worn out parts planes. Then they might buy them on the cheap as parts planes. Saudi Arabian Airlines had about 24 MD-90s that eventually got sold to AirSale which ferried them over to the United States. Delta had no interest in them as they had totally different glass cockpits similar to what is used in the MD-11. Delta is looking for deals and will pounce on any aircraft if it is what Delta wants and the price is right. They are not going buy any aircraft just because it is available.
If it makes GOOD business sense, Delta will buy it.   
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RE: Blue1 /SAS Finland To Cut B717-fleet By Four

Sun Jun 22, 2014 7:52 am

Quoting HELyes (Reply 35):

Quoting ideekay (Reply 33):
I wonder what SAS is doing with Blue1 .. maybe SAS will get rid of the brand Blue1

I believe the brand Blue1 will disappear, it's already converted to a production company, Mama-SAS have taken over responsibility for all commercial operations in Finland.

The Blue1 brand is near extinction , remains only for charter operations.
All scheduled flying is under SAS umbrella and includes several movement each day from Helsinki into Stockholm and Copenhagen where they then integrate within the SAS network operating SAS flights to/from places such as Dublin Manchester Birmingham Geneva and several Swedish domestics.

With a number of both used 737 and new 738s still to be delivered those flights will return to mainline or recast to the CRJ900 if capacity needs be,
The remaining small MD95/717 fleet can simply operate the Helsinki - Stockholm/Copenhagen shuttles and occasional charter.
 
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RE: Blue1 /SAS Finland To Cut B717-fleet By Four

Sun Jun 22, 2014 10:28 am

Quoting MD80 (Reply 34):
In early May 2014, the CEO of Blue1 confirmed plans to replace the Boeing 717-fleet with the aim to be more flexible capacity-wise. I am not aware of the plans of SAS with Blue1/SAS Finland. It would be nice to read more information about the plans of SAS.

Given SAS's tradition of operating an eclectic mix of types, they must be eyeing the Embarer 170/190 for Blue 1. That's a type still missing in the SAS collection....  
 
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RE: Blue1 /SAS Finland To Cut B717-fleet By Four

Sun Jun 22, 2014 11:57 am

Quoting vfw614 (Reply 44):
Given SAS's tradition of operating an eclectic mix of types, they must be eyeing the Embarer 170/190 for Blue 1. That's a type still missing in the SAS collection....

  

Quoting rutankrd (Reply 43):
The remaining small MD95/717 fleet can simply operate the Helsinki - Stockholm/Copenhagen shuttles and occasional charter.

It´s quiet sad that Blue1 shrunk that dramatic. However it shows the recent changes in the Finnish aviation scene.

Quoting JetBuddy (Reply 40):
And it also means Boeing (and subcontractors) still produce replacement parts for them.

IIRC, a US-based manufacturer (or its successor) is obliged to provide new parts "as long as needed". Please correct me if I am wrong. The problem is that these parts are much more expensive compared to the purchase of used parts or (legally) self-made parts. So, officially there are no problems with new spare-parts but they are more and more expensive.
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RE: Blue1 /SAS Finland To Cut B717-fleet By Four

Sun Jun 22, 2014 2:04 pm

Quoting TrijetsRMissed (Reply 39):
Quoting DTWPurserBoy (Reply 38):While I certainly have not seen the contract it is usual that there is a provision for the carrier (in this case DL) to have the opportunity to purchase the aircraft as it comes off lease.
Yes, but not while it is sub-leased. Maybe BCC will want to remove itself from ownership responsibility and agree to sell to DL during the 7-year direct lease extension period. However, that would be more likely if BCC's catalog was not primarily 717s. Rather, the 717s will likely be purchased by DL as they come off of lease from BCC beginning in 2024, IMO.


Quoting DTWPurserBoy (Reply 38):Any a.netters have some inside knowledge on how these deals are structured and what type of cost the airline pays to buy the frame off lease?

Yes. The leasing company will structure a deal by taking the full list price at YOM, less the depreciation. For a plane like the 717, the airline will counter with a fair market value estimate, based on the aircraft's vintage and FC/FH numbers. If the plane had a less than stellar MX log, that would be exploited as well. They will meet somewhere in the middle, with the nod slightly in the airline's favor.

Thanks so much, Trijets. An interesting and educational post.

I have a feeling that in 7 years time there will not be a lot of interest in a 717 and DL will probably get them at a rock bottom price. Someone mentioned some frames being parted out. I was not aware of any 717's having reached that stage yet, unlike the 737-700's and some -800's.
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n471wn
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RE: Blue1 /SAS Finland To Cut B717-fleet By Four

Sun Jun 22, 2014 4:28 pm

Quoting DTWPurserBoy (Reply 46):
I have a feeling that in 7 years time there will not be a lot of interest in a 717 and DL will probably get them at a rock bottom price. Someone mentioned some frames being parted out. I was not aware of any 717's having reached that stage yet, unlike the 737-700's and some -800's.

All 717's are in service and not even one is in storage---let alone being parted out
 
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RE: Blue1 /SAS Finland To Cut B717-fleet By Four

Mon Jun 23, 2014 3:59 am

Quoting MEA-707 (Reply 8):

The interesting thing with the 717 is; apart from the scrapped  prototype all other 155 built aircraft are flying now with 7 airlines

It's a shame that the prototypes for the MD-90 and 717 were scrapped in relatively short order. At least we have N901DA, which played a significant role in the certification process.

Meanwhile the DC-10 prototype operated for nearly 30 years with AA and the MD-11 prototype is at 23 years and counting with FX.
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UA444
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RE: Blue1 /SAS Finland To Cut B717-fleet By Four

Mon Jun 23, 2014 8:56 am

Quoting TrijetsRMissed (Reply 48):
It's a shame that the prototypes for the MD-90 and 717 were scrapped in relatively short order. At least we have N901DA, which played a significant role in the certification process.

Meanwhile the DC-10 prototype operated for nearly 30 years with AA and the MD-11 prototype is at 23 years and counting with FX.

Why were these prototypes scrapped, along with the DC-10, DC-9, and DC-8 l/n 1s? Even though the first MD-11 is still here, it's really l/n 447 so doesn't feel like a #1.

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