senatorflyer
Posts: 323
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Re: Narrowbody vs widebody costs trans Atlantic

Tue Apr 30, 2019 10:49 pm

Sokes wrote:
Alias1024 wrote:
kitplane01 wrote:





I wonder if you all are overstating the importance of cargo revenue for a mainline airline. Google says
Airline 2Q2018 cargo revenue
American USD261 million
Delta USD223 million
United USD314 million

Each of these has about $10B in revenue per quarter, so cargo is about 2-3% of revenue.


But cargo is likely to be relatively more important to the economics on longer hauls like trans-Atlantic or trans-Pacific where road and rail transport isn’t a viable competitor and ships take days. A domestic short haul flight in the US might only have demand for a couple hundred pounds of mail or a few very time sensitive packages. No need for a lot of cargo space. LAX-HND might have 5 or 10 tons of cargo. That’s a lot of revenue potential that airlines are going to want to add to their bottom line, and cargo capabilities will absolutely be considerations on longer flights and therefore fleet decisions.

https://investor-relations.lufthansagro ... group.html (in German):
2018 Lufthansa sold:
284.561 million passenger kilometer
10.907 million freight tonne kilometer
For each passenger kilometer Lufthansa flew, they also flew 38 kg freight kilometer cargo.

https://www.dvz.de/rubriken/luft/detail ... msatz.html (again in German):
3.52% of freight kilometers was flown within Europe.
In nine months freight generated 1.841 million Euro turnover.

Freight makes roughly 2,5 billion Euro turnover of 28 billion Euro turnover in traffic (35 billion Euro total).
I'm not sure what is meant with traffic and total.
The vast majority of flights are within Europe which generates just 3.5% freight kilometers.
The 2,5 billion Euro/ 9% of traffic turnover generated by freight seem to be generated on rather few flights.

Does anybody have a rough number how many $/ton freight an airline gets for transatlantic/ transpacific?
Or better: Roughly how many % of revenue is freight in a transatlantic/ transpacific flight?
Still better: How much revenue does transatlantic passenger traffic and how much revenue does transatlantic freight traffic generate?

The wing of A321/ B737 was not designed for transatlantic. Even though we have this discussion.
I guess once Boeing introduces the NMA or Airbus puts a longer carbon wing on the A321, transatlantic passenger traffic will be done by narrowbodies. More frequencies or more city pairs allow for higher ticket prices.
But why would Airbus/ Boeing do this? They want to sell their widebodies.


Since you’ve posted the LH numbers, have you checked what their annual profit was in 2018? If you subtract the cargo ops from the overall profit then it shows how important cargo actually is.
 
strfyr51
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Re: Narrowbody vs widebody costs trans Atlantic

Wed May 01, 2019 5:35 am

while a Narrow body aircraft is less expensive to fly than a widebody? The earning potential for a widebody is predicated on the freight it can carry along with the bags.
If a 777 is carrying a full belly load of freight? The passengers are PURE Profit for the Airline. United had no dedicated cargo airplanes but take a look at the quarterly reports and you will see Millions of Freight Ton Kilometers, Because of that? United can earn money with the Passenger loads available. As does Delta and American.
 
Sokes
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Re: Narrowbody vs widebody costs trans Atlantic

Wed May 01, 2019 6:11 pm

senatorflyer wrote:
Since you’ve posted the LH numbers, have you checked what their annual profit was in 2018? If you subtract the cargo ops from the overall profit then it shows how important cargo actually is.

The first link I mentioned says Konzernergebnis (=profit) is 2,163 billion Euro. Turnover from cargo was around 2,5 billion Euro.
But I can't see how to read profit caused by freight out of this. Lufthansa cargo has 7 B777F and 12 MD11F (according to Wikipedia in March 19).

Even otherwise I don't see how cargo revenue is "almost all profit". If a plane is not loaded to MTOW one could argue that the added cargo only cost a little fuel. But airlines who need cargo capacity will choose a different plane, e.g. a B787-9 instead of a B787-10. They prefer more cargo revenue over lost revenue from added passengers. Agreed, the B787-9 is cheaper.
Maybe choosing an A350 over a B787-10 or choosing a B777 over an A350 are better examples.

I anyway agree with you that cargo is important in transatlantic traffic.
I agree even more with leghorn who argues that business travellers will prefer more direct connections and therefore narrowbodies.
Why can't the world be a little bit more autistic?
 
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kitplane01
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Re: Narrowbody vs widebody costs trans Atlantic

Thu May 02, 2019 3:33 am

Sokes wrote:
senatorflyer wrote:
Since you’ve posted the LH numbers, have you checked what their annual profit was in 2018? If you subtract the cargo ops from the overall profit then it shows how important cargo actually is.

The first link I mentioned says Konzernergebnis (=profit) is 2,163 billion Euro. Turnover from cargo was around 2,5 billion Euro.
But I can't see how to read profit caused by freight out of this. Lufthansa cargo has 7 B777F and 12 MD11F (according to Wikipedia in March 19).

Even otherwise I don't see how cargo revenue is "almost all profit". If a plane is not loaded to MTOW one could argue that the added cargo only cost a little fuel. But airlines who need cargo capacity will choose a different plane, e.g. a B787-9 instead of a B787-10. They prefer more cargo revenue over lost revenue from added passengers. Agreed, the B787-9 is cheaper.
Maybe choosing an A350 over a B787-10 or choosing a B777 over an A350 are better examples.

I anyway agree with you that cargo is important in transatlantic traffic.
I agree even more with leghorn who argues that business travellers will prefer more direct connections and therefore narrowbodies.


Actually, I don't know how much of cargo revenue is pure profit. Does cargo not have a handling cost? Does it not need marketing and accounting and people to load and unload and wearhouses to wait for shippers and equipment and ....
 
Sokes
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Re: Narrowbody vs widebody costs trans Atlantic

Thu May 02, 2019 5:40 am

kitplane01 wrote:
Sokes wrote:
If a plane is not loaded to MTOW one could argue that the added cargo only cost a little fuel.


Actually, I don't know how much of cargo revenue is pure profit. Does cargo not have a handling cost? Does it not need marketing and accounting and people to load and unload and wearhouses to wait for shippers and equipment and ....

Of course you are right.
Why can't the world be a little bit more autistic?
 
BA777FO
Posts: 324
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Re: Narrowbody vs widebody costs trans Atlantic

Sun May 05, 2019 2:37 pm

I'll use the example of TLV to compare an A321 vs a B777-200

The A321 carried 154 passengere in a 23J/131Y split - a payload of 14.7 tonnes with no cargo. It burned 13.7 tonnes of fuel.

The B777-200ER carried 253 passengers in a 3 class 45J/23W/185Y split. It also had 5 tonnes of cargo and 2 tonnes of mail. Of course it's capable of carrying more but these were our hypothetical once-upon-a-time loads. Total payload 27 tonnes.

So the A321 burned roughly half the fuel, but carried a bit more than half the passengers. However, the 777 carried an extra 7 tonnes of freight at just under double the A321's payload.

Of course, the 777 is optomised for longer sectors than this wheras this is in the A321's sweet spot. But the 777 carried twice as many J seats, 23 more W and 54 more Y seats. The 23W seats paid for the extra fuel alone so the 22 extra J, 54Y and 7 tonnes of freight was additional profit minus slightly higher aeronautical fees and ~5 more cabin crew/5 more hotel rooms in TLV.

As for cargo, a very crude way of working it out was to divide total cargo revenue by cargo tonne kilometres to work out revenue per kilo per kilometre. It will vary depend on kind of cargo (temperature sensitive or other specialist cargo/livestock etc) but on a typical 4,000nm sector a tonne of cargo is worth about £1,300, or roughly a one-way J fare. So every tonne of cargo is roughly equivilent to carrying a business class passenger.

Obviously over ~4,000nm an A321 starts, or has already, taken a payload hit. The B777 can carry 20+ tonnes of cargo and a full passenger load over that distance happily.

Profit = revenue - expense. Often management are guilty of focusing too much on cost but if filled appropriately, even on shorter sectors, the extra revenue from a B777 is worth running it. It's only on those thinner routes where filling a widebody is a struggle does the narrowbody seem to win out.
 
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kitplane01
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Re: Narrowbody vs widebody costs trans Atlantic

Mon May 06, 2019 3:00 am

BA777FO wrote:
I'll use the example of TLV to compare an A321 vs a B777-200 ...

... Total payload 27 tonnes.

So the A321 burned roughly half the fuel, but carried a bit more than half the passengers. However, the 777 carried an extra 7 tonnes of freight at just under double the A321's payload.



First, I love any post with numbers. Thanks.

Second, I assume you meant "total fuel burn" and not total payload??

Third, I feel like I'm missing some context. What's the TLV example? What route?
 
JayinKitsap
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Re: Narrowbody vs widebody costs trans Atlantic

Mon May 06, 2019 4:23 am

A way to check is observing NY to UK flights. From JFK to LHR with some slot constraint what is flying?

From smaller nodes, is there a seasonal variation where NB's do the routes in low season, WB in high?
 
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kitplane01
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Re: Narrowbody vs widebody costs trans Atlantic

Tue May 07, 2019 7:39 am

JayinKitsap wrote:
A way to check is observing NY to UK flights. From JFK to LHR with some slot constraint what is flying?

From smaller nodes, is there a seasonal variation where NB's do the routes in low season, WB in high?


I don't think that's true.

1) The NEO/MAX are new, and out in small numbers. And the previous jets are marginal with a standard load into a headwind for this distance.

2) It's a VERY slot constrained route, which favors larger aircraft.
 
Lamp1009
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Joined: Wed Sep 11, 2019 7:36 pm

Re: Narrowbody vs widebody costs trans Atlantic

Wed Sep 11, 2019 8:15 pm

brilondon wrote:
Arion640 wrote:
Don’t forget widebodies carry an enormous amount of cargo also. Cargo is huge business for airlines like BA (and others of course) and those 6 daily widebodies out of JFK will be full of it.


No it's not. Cargo makes up about 3% -5% of revenue that airlines generate. If it was such a huge money maker, why do airlines not fly cargo aircraft? That comment is false.

Where do you get that statistic? What airlines does it cite? What routes is it considering? What aircraft does the airline have in its fleet? What routes do those aircraft fly? Does it include baggage handling? Way too many questions.

If we use this simple case study and look at United Airlines (which, I might add, is a very large international traffic generator), they fly over 9 million passengers domestically and 7.2 million passengers internationally. Of those international flights, 2 million passengers fly to Latin America, and, while it doesn't say, it's implied that at least 1.5 million passengers travel to Canada (Looking at YYZ alone, there are close to 14 million annual transborder passengers). While United flys a few widebodies across the country, these are a minority overall, so for simplicity's sake, we'll ignore the Canadian portion of the International passengers. Overall, we can estimate that 5.2 million United passengers fly on widebodies (it's really hard to quantify this, it's just an exercise). In other words, only about 33% of the airline's passengers travel on widebodies.

We can also assume that cargo can only travel on widebodies because the only things that really travel on narrowbodies include dead bodies, chartered cargo (for routes like the island hopper) and excess luggage. These are all negligible in the grand scheme of things.


Now that all the background information is present, we can make a quick analysis. if 3-5% of an airline's revenue comes from cargo overall, and only 33% of their flights are fit to handle cargo, then cargo must account for 9-15% of the revenue generated by the widebody fleet. This is hugely significant since cargo operations are relatively cheap compared to passenger operations, and because long haul flights are expensive to operate.

https://hub.united.com/united-reports-j ... 73630.html
https://en.wikipedia.org/wiki/Toronto_P ... al_Airport
 
Junglejames
Posts: 24
Joined: Sat Jan 05, 2019 4:07 am

Re: Narrowbody vs widebody costs trans Atlantic

Fri Sep 13, 2019 9:15 pm

kitplane01 wrote:
BA777FO wrote:
I'll use the example of TLV to compare an A321 vs a B777-200 ...

... Total payload 27 tonnes.

So the A321 burned roughly half the fuel, but carried a bit more than half the passengers. However, the 777 carried an extra 7 tonnes of freight at just under double the A321's payload.



First, I love any post with numbers. Thanks.

Second, I assume you meant "total fuel burn" and not total payload??

Third, I feel like I'm missing some context. What's the TLV example? What route?
Heathrow to Tel Aviv isn't it?

I think that answer tells you everything though. Yes the cost per seat may be less, but by the time you've taken the extra revenue potential into account, the wide body often wins out.

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