Cathay buying 14 used B744s

[answer=42]

surely the interesting BA question is what their strategy will be to respond to EU/US 'open skies' (and, to a lesser extent, post-Concorde).
Having lots of capacity and a strong balance sheet can't be bad weapons for that particular battle. This would argue for them to sit on their hands.
But this is pure speculation.
answer=42

[747FOCAL]

Notso Fantastic,

Now I know you nothing. The wings on the 747-400 are common with the exception of the pylons. Its the control units that make the job tough. Even Boeing is not foolish enough to try and build 3 different wings to support each engine type.

What I think the real issue here is that you work somewhere with 747s for BA and nobody is telling you that pretty soon you will no longer be necessary. Wake up, you think BA management would tell their slaves that they are killing a particular line???

Nice to know you are still laughing (giggling) at my joke. Your the only one that thought it was a serious assessment of stowaways. If the stowaways did not die and drop out of the gear bays onto innocent people I would not care at all.

[Liam Gallagher]

From the CX side of the fence this is more than speculation. Some of stuff purportedly on Speednews is remarkably similar to a quote from our CEO broadcast on the Press Room at cathaypacific.com

Pre-SARS it was more than an open secret around CX City we were in the market for used 744 to refit in CX livery to enter service 2005 ish. SARs hit the 744 hard and survival became priority. Post-SARS, or Post the previous bout of SARs CX has openly stated it is in the market for used 744 if the price is right. RR powered makes life easier, but they are scarce in supply and talk is of the net being cast wider. I understand the talk of a BA deal came about as they are RR powered and Uncle Rod is known to CX and it was thought with the planned expansion of BA's 777 fleet a bit of disposal of the 744 fleet may occur. Further, we are after all, oneworld buddies......

Our CEO has just returned from Seattle; apart from why is our latest 777 just that....late...wonder what they talked about.....

[Hand Solo]

What I think the real issue here is that you work somewhere with 747s for BA and nobody is telling you that pretty soon you will no longer be necessary. Wake up, you think BA management would tell their slaves that they are killing a particular line???

Hmm, I could say now I know you know nothing 747FOCAL. You certainly don't know how BA work, as with NSFs seniority he'd probably be the last man in BA flying 744s. Nor are BA about to dispense with 14 744s without having an immediate replacement as we'd lose lots of LHR slots. Furthermore I'd suspect that if they really did intend to dispense of 14 aircraft imminently they wouldn't be undertaking a massive training program on the aircraft or looking at external recruitment in the near future.

As for this "I know something you don't know" business, are you suggesting RR and Boeing would sit back and watch the @rse fall out of the market for the RR powered 744? There's plenty of money to be made supporting old RB211s, can't see RR shooting themselves in the foot.

[747FOCAL]

Hand Solo,

I agree the 14 aren't going to go straight to CX or anybody else right away without replacements. Long line that 777 is.

I still stick with my comment that BA senior management will only tell the slaves what they want them to know.

Current Operational lists of 747-400s worldwide:

GE powered = 276
PW powered = 210
RR powered = 118

Ever more is the pressure for the 777 Freighter which will literally kill the 747F. Boeing is only in the NEW airplane business, does not care about already delivered aircraft. And it would appear that neither does Rolls when it comes to this aircraft.

Why do you think that the RB211 is not offered on the 747-400ER? Only GE and Pratt? Coffee is brewing fellas, the signs are everywhere. There are very few RR powered 747s that are firm delivery aircraft. After this next (2004) year there may be none.

[Liam Gallagher]

Notso,

The title of the thread is CX buying used 744; they are definitely in the market place and buying if the price is right. As for BA being the seller; that rumour went round HK about a year ago and you will appreciate that BA was faced with different circumstances back then.

As for any deal that may occur; I agree people on our pay-band will read about in the newspapers like everyone else; otherwise join Martha Stewart on the insider-trading bandwagon.

747focal,

I'm bored and shall play your silly games; why is the RB211 not being offered on the 747-400ER (or 747-400 advanced to use CX speak)???

[flight sim boy]

P&W4056 - 9400lb basic engine weight
GE CF6-80C2-B5F - 9499lb
RR RB211-524G/H-T - 9470

GE is therefore the hevier unit.

[747FOCAL]

Liam Gallagher,

I am not playing any game. The facts speak for themselves.

The RR is not on the 747ER, that is a fact. Now ask yourself.....Why isn't the RR available on the 747ER?

I would tell if I could, but I won't/can't. Someday it may hit the fan and we all will know, but then Notsofantastic won't be happy when his RR 744 is on the ground for a long time.

And NO, there is no safety issue with the RR 747. Don't even go there.

[flight sim boy]

Boeing's website lists the RR engine as an option for the -400ER...


http://www.boeing.com/assocproducts/...s/7474sec1.pdf

[Hand Solo]

Well as a wild guess, maybe RR wish to concentrate on the Trent in future? If one takes an objective look at sales opportunities for the RB211, you've got the 757 (dead), the 767 (dying) and the 744 (rapidly turning a nasty shade of purple, probably going blue when the A380 flies). The only Boeing products with a future are the 737 and the 777, neither of which use RB211s. Perhaps Rolls don't want to invest/waste any money on a tweaked-up RB211 with relatively insignificant sales opportunities when they've got a market full of 777, A330, A340 and A380 running on Trents? Still think theres money to made supporting the RB211s already in service though. Jusy my 2p's worth.

[Groaner]

OK, 747Focal, you're on for a dollar.

NotsoFantastic, are you willing to also put up some money?

[Freehills]

747FOCAL,

RR is available on B747-400ER, but the GE has advantages at the ULH ranges.

I presume with all your "ooh, I know something you don't" you are referring the marginal noise performance of RR powered B744 at LHR?

It's potentially a big problem, but I can't see the UK government sticking it to BA or RR in a big way, more likely to take test results on "quiet" days (raining, fog, etc.) and declare the combination noise compliant...

CX wouldn't have a big problem taking non-RR powered aircraft. Some of the B742 are GE powered anyway, and no engine maintenance is in house.

[747FOCAL]

Freehills,

You couldn't buy an RR powered 910k 747 for 1 billion dollars a copy.

[Jim Morehead]

On the various points of view (POV),here are some things to consider.

With reference to the 777F and all of that,SOME people may like it to fly,but OTHERS still like the 747-400F. China Airlines receives #16 next month and a few more coming. It is a straight 744F and China has no combies like EVA.

On the United issue, United can do about anything they want right now (and they have). All United has to do is to convince Judge Wedoff of the need to get the carrier to survive and he says yes. And some 747-400s are definitely for sale. I think 2 went to the Middle East. I don't know the status of the 7-8-9 that were going to Thai. It was an on again/off again thing and I retired before the outcome was known.

I believe I know where two more are going in the next 6 months.

In terms of UAL's history, they had 44 at peak. About 18 months ago , it dropped to about a need for 20-22. There were usually 1-2 in Maintenance at any once time,but 20 was required for the schedule.

Then the bankruptcy came and I left 3 months after that. FWIW,UAL has cut the employee force from 103,000 (some were part time obviously) and they are down to about 60,000 people.

Then UAL went to the airplane owners ( I think part were owned by UAL and part by holding companies) and told them that the rent was too high that if they didn't reduce it, they would return the airplane. Since the worldwide market for 747-400s is diminishing in most places, the owners did reduce their price. If they didn't Judge Wedoff would have helped <bg>. All during this time, the 777 was the SHOW STOPPER!

Then they got the 400 prices lower and then announced they would be increasing the use of the 400 back to about 28-30 airplanes since they got the rent lower. Then they went to the 777 owners and said, we need to reduce the rent on the 777s because hyou are not competitve. How 'bout that? Then they were going to park 18-22 of them and put out bids for 400s and surplussed off of the 777.All during this time,of course, the 400 pay was reduced to 777 pay through negotiation with the help of one Judge Wedoff. So at UAL, there is now no reason to bid to the 400 for pay since the pay is the same. The routes overlap in most situations. One is ETOPS and one is not of course.

So most of the 400s were removed from Victorville and engines were placed back on. In fact as a matter of trivia, the leases and tax laws of somebody required that the airplanes fly once every 6 months or so and I remember one airplane where they put the engines back on (an 8 hour job), flew it toNRT or ICN, and flew it back to the desert and took the engines off a week later!!!

[Schrodingers Cat]

A point that seems to be being missed is the cost of the cockpit upgrades necessary for the B747 to fly in EU (and other jurisdictions) airspace, currently at about 6m a pop. This MUST be done by 3/12/2004.
Amortizing the cost of this plus the HR costs of the flight engineer over the relatively short lifespan left for the Classic makes the choice of an all 744F fleet 'upgrade' look convincing. B-HVY is ccming up to some quality 'desert time', and B-HIH can't be much younger. The ex-Varig CF6 aircraft also getting long in the tooth, make for an irritating fleet mix.
(I know that CX is 'investing' in getting rid of the apalling Smiths fuel gaging, but I think you'll find that is mandatory due to the explosions in fuel tanks AD).
If I was on the CX Classic freighters I would be casting anxious glances over my shoulder......

[Torquelink]

BA 744 disposal. Sorry NotSo, it may not be what you want to hear but it is common knowledge in the aircraft trading/leasing world that BA is actively attempting to dispose of B744s and CX is a prime target. I HEAR (note I'm not suggesting this is FACT) that CX would launch the Boeing SF conversion and, as this programme could not accept the first unit until mid-2004 and then manage only about four or five units a year initially, the phase-out by BA would be gradual permitting them to source replacements. Oh and Boeing have 777 delivery slots next year (FACT).

Engines. I would GUESS (for NotSo's benefit) that HandSolo is correct. RR realised that the market for the 744 is likely to be less than extensive (around 12 sold so far?) and are keeping their powder dry for future Trent applications on, possibly, a much more developed version of the 744 which Boeing are now suggesting would incorporate 7E7 technology and would follow development of this aircraft by at least two years.

747FOCAL. I don't think you should keep us in suspense - what's the problem with the RR 744? I suspect, as others do, that it's the noise issue and, again, like others on this thread, I doubt that RR/Boeing would just sit on their hands. After all who's been flight testing the chevronned nacelle on a 777?

[thetexpat]

FYI from todays Air Transport World e-news:
Boeing entered into negotiations to help Cathay Pacific Airways acquire 15 RB211-524-powered 747-400s from British Airways. Cathay would use the 747s for both passenger and freighter services. Under the agreement, BA will take up to 20 777-300ERs. It operates 777-200ERs powered by both GE90s and Trents while its earlier 777-200s are powered by GE engines. The deal appears similar to a transaction with BA's 757s that saw Boeing buy them back and convert them into freighters for DHL. Boeing also is proposing that it purchase BA's 767 fleet and convert the aircraft into tankers for the RAF. BA long has been considered a frontrunner for a 7E7 order.--GT

[acmi48]

the RR is not avail on the -400ERF and cannot operate at higher weights due to its noise level being outside regulatory limits at this thrust-or so i have been told.. so current RR 400f customers limited to the lower weight model mtow 396893 kgs instead of the 405000 kgs which Af a GE customer have

[747FOCAL]

Torquelink,

Don't believe everything you read about flight testing.


Sit on their hands??? They did that so long ago that their hands are in up to the elbow.

[Re-Heat]

Most BA 744s are on tax-enhanced finance leases with ownership, eventually, vesting in BA so they can sell them provide the banks get paid out what they are owed plus any tax clawbacks resulting from early termination. A bigger problem is that BA capitalise major maintenance expenditure making the book value of their aircraft much higher than market values. Difficult to see how they'll do a deal without making large book loss.

Capitalisation of major maintenance expenditure, be it statutory or not, is specifically prohibited by accounting standards - if they were doing this, E&Y would not sign off the accounts.

What is allowed is that finance leases be capitalised at the present value of the future cashflows, even if it is not owned. They may capitalise only expenditure relating to upgrades that will enhance these cashflows. This is such things as engine core upgrades, new wingtips, or a new composite part, plus all associated labour.

As for the question, BA require aircraft to fill the slots and fly the routes. The fleets of 777 and 747 are fairly optimised at the moment in the current climate - what BA really wanted to do in 2002 was sell 777s, since they would generate more revenue.

As said, the 747s and owned by Bank of Tokyo-Mitsubishi and others, and are inherently less-easily disposable; however with cash-strapped airlines and a demand for 747s, the situation is more reversed. 773s have already been considered in the past, and may be again. Who knows.

And for Christ's sake the only people who care about the RB211 noise are the HACAN fools, many of who live in Barnes, Putney and Fulham - 6 miles out. Snobs.