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Old 16th Aug 2014, 10:16
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OverRun
Prof. Airport Engineer
 
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The original post missed the commercial issues to do with the A340-600. It’s not a lemon, but rather its market disappeared. The economics of the A340-600 were actually pretty good for the time, matched the 777-300 and beat the 747-400.

When the A340 family was conceived, there was domination of the major long-haul routes by the 747-200 and that domination continued by the 747-400 up to about 2002. The A340-200 and more so the -300 had the ability to replace the 747-200/-300 on longer Europe-Asia and trans-Pacific routes, by consolidating capacity and increasing frequency. The later A340-600 with its 380 seats was aimed at both the -200/-300 and towards the 747-400.

What happened though was that the airlines changed strategy as the market evolved. The large aircraft were conceived for the regulated market, with traffic being fed through major airports. As the market deregulated, it fragmented. As a result the 747 has been replaced in many cases with smaller aircraft over the past two decades, partly because the 747/A340-600 capacity was always too large for many airlines, but also because smaller aircraft have stimulated the fragmentation of the major markets. It is the market change that cast the gloom on the A340-600 sales, with only 97 sold out of 377 total A340 sales.

Interestingly one comparison performed by Aircraft Commerce 10 years ago looked at 747 replacements and showed that the 777-300 and A340-600 have virtually identical profit profiles, explained by the A340’s marginally higher trip costs being offset by its 15- seat higher capacity. The 777-300’s and A340-600’s profit profiles also shadowed the 747-200’s, even though the 777/A340 were new and the 747-200 was used and depreciated. This illustrates the 777-300’s and A340-600’s suitability as 747-200/-300 replacements. This is explained by the A340-600 and 777-300 having similar capacities and trip costs to the 747-200 (which included finance costs). This rather dispelled the issue of new aircraft having an economic disadvantage because of high finance charges. The 747-400 has a lower profit profile than the 747-200. This is because the 747-400 has higher costs than the 747-200, explained by high finance charges (the -200 was used, and the 747-400 was new). So the 747-400 had higher cash operating costs than the A340-600 and 777-300.
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