BA will get the A380
However, LAX? The passenger load is there, but the airport is tighter than ..........
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Agreed the aircraft will have a certain cache about it, and that will attract a lot of curious travellers.
In fact when you think of the increase in congestion getting through customs, immigration etc. I shall be looking not to fly on it.
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BA would stand a better bet getting their hands on the 300ER than the A380s as they already are a 777 operator and have GE-90s as well as the Trent 800s (which btw are the better of the three engines).
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Just a few thoughts on this subject
Facts:
• BA is the largest long-haul carrier in the world
• BA serves more cities in the United States on inter-continental routes than any other airline
• BA has the largest 747 fleet in the world
• Financially it is doing far better than its American competitors
• No US based transatlantic passenger airline is profitable
• BA is the biggest Trans Atlantic airline by far.
• Only 2 US based airlines operate the 747, United and Northwest. United has grounded some of its 744’s which are up for sale.
So why has BA not so far ordered the A380?
Possible answers:
1. BA has 3 long haul types already, 747, 777, 763. It has 57 744’s, 43 777’s and it looks like 9 763’s allocated to long haul.
2. Why does it want another?
3. BA has had a strategy for several years on developing frequencies to long haul destinations as a way of meeting increasing demand.
4. There is every reason to believe that that will continue
5. The aircraft that has made this possible is the 777-200.
6. Passengers like high frequencies because it gives then choice
7. More flights per day on a city pair route than your competitors has always been a driver of airline success
8. The A380 does not fit easily with a high frequency policy
9. The logical aircraft with which to expand BA’s long haul fleet is the 777-300 (not ER)
10. The 300ER offers no range/payload advantages over the 744 on any BA route
11. The straight 300 would be an ideal aircraft for most BA North American operations to replace 744’s if they are required elsewhere for range reasons or if 772’s are required to replace 763’s for capacity reasons.
12. If BA could sell 744’s now, which I am sure it would like to do, it would replace them with Rolls powered 773’s
13. There probably is a place for the A380 at some time but only for those routes where frequency fully satisfies demand and passenger growth continues.
14. Boeing believe that frequency growth and the opening of new routes is the future of long haul operations. They were proved spectacularly right about this with the 777.
15. A daily service between London and Sydney requires 3 aircraft. To upgrade such a route to an A 380 is an awesome commitment
16. BA’s first duty is to its shareholders. At a time of chaos in our industry that surely spells caution.
Facts:
• BA is the largest long-haul carrier in the world
• BA serves more cities in the United States on inter-continental routes than any other airline
• BA has the largest 747 fleet in the world
• Financially it is doing far better than its American competitors
• No US based transatlantic passenger airline is profitable
• BA is the biggest Trans Atlantic airline by far.
• Only 2 US based airlines operate the 747, United and Northwest. United has grounded some of its 744’s which are up for sale.
So why has BA not so far ordered the A380?
Possible answers:
1. BA has 3 long haul types already, 747, 777, 763. It has 57 744’s, 43 777’s and it looks like 9 763’s allocated to long haul.
2. Why does it want another?
3. BA has had a strategy for several years on developing frequencies to long haul destinations as a way of meeting increasing demand.
4. There is every reason to believe that that will continue
5. The aircraft that has made this possible is the 777-200.
6. Passengers like high frequencies because it gives then choice
7. More flights per day on a city pair route than your competitors has always been a driver of airline success
8. The A380 does not fit easily with a high frequency policy
9. The logical aircraft with which to expand BA’s long haul fleet is the 777-300 (not ER)
10. The 300ER offers no range/payload advantages over the 744 on any BA route
11. The straight 300 would be an ideal aircraft for most BA North American operations to replace 744’s if they are required elsewhere for range reasons or if 772’s are required to replace 763’s for capacity reasons.
12. If BA could sell 744’s now, which I am sure it would like to do, it would replace them with Rolls powered 773’s
13. There probably is a place for the A380 at some time but only for those routes where frequency fully satisfies demand and passenger growth continues.
14. Boeing believe that frequency growth and the opening of new routes is the future of long haul operations. They were proved spectacularly right about this with the 777.
15. A daily service between London and Sydney requires 3 aircraft. To upgrade such a route to an A 380 is an awesome commitment
16. BA’s first duty is to its shareholders. At a time of chaos in our industry that surely spells caution.
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Colegate
You forgot:
Fact
... the British government have delayed the long overdue to develop a 3rd (realign the existing 3rd?) runway at LHR
... BA have been taking seats out of their LH aircraft thus reducing capacity
... air travel is forecast to grow by about 50% in the next decade, much of it on LH routes
Possible result
... to increase seat availability at a slot restricted airport you either have to pack more in to what you have - won't happen
... to reduce SH slots to increase LH slots - may happen, but will still require more aircraft
... buy bigger aircraft such as the A380 to maximise use of existing slots - I suspect this will happen in a 2-3 year timeframe
... buy slots at LHR as and when available - will continue to happen but not at the stupid QF price paid, and still requires more aircraft.
Personal note
BA, if given the choice, would undoubtedly like to reverse their 57 B744 to 43 B777 ratio. If a freighter deal could be done then BA would probably swap 6 B744's for 6 B773 (RR), however financing would be a big issue right now, so the deal would have to be good. In the 2-3 year timeframe I cannot see BA without the A380 in the portfolio of options at least, probably for the kangaroo routes and maybe JNB, probably requiring about 12-15 hulls.
You forgot:
Fact
... the British government have delayed the long overdue to develop a 3rd (realign the existing 3rd?) runway at LHR
... BA have been taking seats out of their LH aircraft thus reducing capacity
... air travel is forecast to grow by about 50% in the next decade, much of it on LH routes
Possible result
... to increase seat availability at a slot restricted airport you either have to pack more in to what you have - won't happen
... to reduce SH slots to increase LH slots - may happen, but will still require more aircraft
... buy bigger aircraft such as the A380 to maximise use of existing slots - I suspect this will happen in a 2-3 year timeframe
... buy slots at LHR as and when available - will continue to happen but not at the stupid QF price paid, and still requires more aircraft.
Personal note
BA, if given the choice, would undoubtedly like to reverse their 57 B744 to 43 B777 ratio. If a freighter deal could be done then BA would probably swap 6 B744's for 6 B773 (RR), however financing would be a big issue right now, so the deal would have to be good. In the 2-3 year timeframe I cannot see BA without the A380 in the portfolio of options at least, probably for the kangaroo routes and maybe JNB, probably requiring about 12-15 hulls.
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TopBunk,
I did not forget the issues that you raised and I think that they are all valid parts of a very complex equation. The ultimate issue though is that the first duty of the BA Board is to the shareholders. That always requires a balance between risk and opportunity. Going into the A380 will be risky but it will also create new opportunities. Do not forget that the original 747 user (PanAm) was destroyed partly by the decision to buy that aircraft.
I am sure that if the opportunity arose BA would gladly dispose of large numbers of 747's in exchange for Rolls powered 777's. But the reality is that the resale market for 747's is almost non -existent at the moment. United have stored aircraft availabler immediately and they have been available since Sept, 2001. the only taker for some of them seems to be TUI.
I think you are absolutely right in suggesting that if BA goes ahead with this aircraft it will need to place an order for 12-15 aircraft. Tha is the minimum that would make sense. My guess is that if they do decide to proceed the first order would be for 10 with 20 options. The delivery rate would probably be 5 per annum and the first route would by JFK.
I am sure that the planning people in BA are spending a lot of timer on this just now as they are having to decide what to do about the 747's , the oldest of which is now 15 years old. BA well knows thew cost of keeping aircrfat beyond 20 years and I am sure that they will not wish to repeat the mistake of the retention of the 747-100's for so long.
I did not forget the issues that you raised and I think that they are all valid parts of a very complex equation. The ultimate issue though is that the first duty of the BA Board is to the shareholders. That always requires a balance between risk and opportunity. Going into the A380 will be risky but it will also create new opportunities. Do not forget that the original 747 user (PanAm) was destroyed partly by the decision to buy that aircraft.
I am sure that if the opportunity arose BA would gladly dispose of large numbers of 747's in exchange for Rolls powered 777's. But the reality is that the resale market for 747's is almost non -existent at the moment. United have stored aircraft availabler immediately and they have been available since Sept, 2001. the only taker for some of them seems to be TUI.
I think you are absolutely right in suggesting that if BA goes ahead with this aircraft it will need to place an order for 12-15 aircraft. Tha is the minimum that would make sense. My guess is that if they do decide to proceed the first order would be for 10 with 20 options. The delivery rate would probably be 5 per annum and the first route would by JFK.
I am sure that the planning people in BA are spending a lot of timer on this just now as they are having to decide what to do about the 747's , the oldest of which is now 15 years old. BA well knows thew cost of keeping aircrfat beyond 20 years and I am sure that they will not wish to repeat the mistake of the retention of the 747-100's for so long.
Do not forget that the original 747 user (PanAm) was destroyed partly by the decision to buy that aircraft.
BA will know that if they don't continually invest in current technology they will fall behind others, and it then becomes very expensive to catch up some time in the future. Once the likes of Singapore, Cathay, Virgin etc have A380s (and they will all deploy them initially on BA-competitive routes to London, of course) BA will start to lose market share. Pan Am would have gone under a lot faster if they'd still been running only 707s across the Atlantic through the 1970s.
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Sure, the occasion of Pan Am's demise was Lockerbie but it was already a walking corpse by then. Just look at their financial results throughout the 1970's and 1980's. they were continuously losing money throughout that period of time partly because they had overcapacity.
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It's all very well to talk of increasing frequency as being the preferred option to increase capacity on many routes. I certainly don't disagree -- I like having lots of different schedule choices between two points.
BUT:
1. There are many routes where increasing frequency doesn't make much sense because time zone differences limit possible departure and arrival times. For example, on eastbound trans-Atlantic you can have an early morning departure which barely squeezes into Europe in late evening, or late afternoon departures that arrive the following morning. A mid-day departure would put you in London at 3am. Do you really want that? (assuming that curfews even let you do it)
2. More frequency = more slots. Many airports, including LHR, at tightly constrained on slots.
For these two reasons, I personally think it's inevitable that BA will eventually acquire A380s. On many routes, it will basically have no choice, if it wants to increase capacity.
And on those routes that currently support 747s, even if BA does not want to increase capacity, it may have no choice if a competitor introduces an A380, with its much lower seat-mile costs.
BUT:
1. There are many routes where increasing frequency doesn't make much sense because time zone differences limit possible departure and arrival times. For example, on eastbound trans-Atlantic you can have an early morning departure which barely squeezes into Europe in late evening, or late afternoon departures that arrive the following morning. A mid-day departure would put you in London at 3am. Do you really want that? (assuming that curfews even let you do it)
2. More frequency = more slots. Many airports, including LHR, at tightly constrained on slots.
For these two reasons, I personally think it's inevitable that BA will eventually acquire A380s. On many routes, it will basically have no choice, if it wants to increase capacity.
And on those routes that currently support 747s, even if BA does not want to increase capacity, it may have no choice if a competitor introduces an A380, with its much lower seat-mile costs.
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Pan Am went t!ts up for a number of reasons over a good 25 or so years. It was actually a series of bad decisions by the airline’s management starting with one by Juan himself. When it’s initial 747 order was placed in the mid 60s the Juan had every reason to expect that fuel prices would remain the same the global economy would remain buoyant, passenger numbers would continue to grow and yields stay strong (hmm that’s a familiar refrain). So why not order 30 or so 747s to cater for the boom?
What Juan didn’t see coming was first of all delays to the JT9D, which slowed deliveries of the initial batch (anybody remember the pictures of almost complete 747s parked in Seattle with concrete blocks hanging from the pylons instead of engines?)
This meant that instead of having the aircraft on stream in 1969-70 (and making money) they didn’t arrive in large numbers until 1972-3 (by which time the airline had ordered some more 747Bs (that’s –200s now). The older among us will remember that in 73 the first really big oil crisis hit the fuel price went through the roof and the global economy went into reverse. Result? Pan Am is busy for much of the mid/late 70s flying pretty much empty 747s about the place and hemorrhaging cash
Thus the once mighty and still iconic PA is weakened tremendously – it’s the beginning of the end….
The airline switches from being proactive (the 747 itself was prompted by a demand by Trippe that Boeing build a really big plane) to reactive and the various post Trippe-ian management teams get their reactions wrong time after time…
Roll forward five or so years and deregulation means that for the first time it is in danger of getting competition on long haul (only had TWA to worry about before) So rather than build up their own domestic operation (they had a few domestics) they go the quick and dirty method – ie buy an domestic. All well and good but they get suckered into a bidding war with Lorenzo for National and end up paying waaaaaayyy over the odds. Whoops
Which leads the airline to think about alternative means of raising cash ah HA says the airline flog the aircraft and lease em back. OK for short-term cash flow but it also means they lose collateral for future loans.
By late 80s, they have another cash crisis but have no means of securing loans.
So flogging their trans pac operation to United staves off the crisis. Again, a quick fix but kinda knackers longer term revenues in a lucrative market
Then Lockerbie (the trouble with being an icon, it makes you a target). Actually, I suspect didn’t have as big an effect on the airline as many think but certainly didn’t help
In it’s final spasm of cash crisis they compounded the Pac error and flogged the Atlantic routes to UA.
So no real revenues , spiraling debts….game over
But to get back on track of course the A380 does have better seat mile costs than the 747 (at least it's designed to) but that only works if the loads are there.
Get into the spectre of 20-30% loads for a sustained period- it's happened before (73, 82,90,01) and you could be in big trouble quick sharp.
Granted the airport issue is a big one (and on the original time table Airbus were talking about service entry in the 18-20 month time frame) but I wonder how many traffic reservations VS and AF have. But you can bet your booties BA will be thinking the same way and as a result are unlikely to get the 380 into their inventory before the 2009-10 timeframe.
What Juan didn’t see coming was first of all delays to the JT9D, which slowed deliveries of the initial batch (anybody remember the pictures of almost complete 747s parked in Seattle with concrete blocks hanging from the pylons instead of engines?)
This meant that instead of having the aircraft on stream in 1969-70 (and making money) they didn’t arrive in large numbers until 1972-3 (by which time the airline had ordered some more 747Bs (that’s –200s now). The older among us will remember that in 73 the first really big oil crisis hit the fuel price went through the roof and the global economy went into reverse. Result? Pan Am is busy for much of the mid/late 70s flying pretty much empty 747s about the place and hemorrhaging cash
Thus the once mighty and still iconic PA is weakened tremendously – it’s the beginning of the end….
The airline switches from being proactive (the 747 itself was prompted by a demand by Trippe that Boeing build a really big plane) to reactive and the various post Trippe-ian management teams get their reactions wrong time after time…
Roll forward five or so years and deregulation means that for the first time it is in danger of getting competition on long haul (only had TWA to worry about before) So rather than build up their own domestic operation (they had a few domestics) they go the quick and dirty method – ie buy an domestic. All well and good but they get suckered into a bidding war with Lorenzo for National and end up paying waaaaaayyy over the odds. Whoops
Which leads the airline to think about alternative means of raising cash ah HA says the airline flog the aircraft and lease em back. OK for short-term cash flow but it also means they lose collateral for future loans.
By late 80s, they have another cash crisis but have no means of securing loans.
So flogging their trans pac operation to United staves off the crisis. Again, a quick fix but kinda knackers longer term revenues in a lucrative market
Then Lockerbie (the trouble with being an icon, it makes you a target). Actually, I suspect didn’t have as big an effect on the airline as many think but certainly didn’t help
In it’s final spasm of cash crisis they compounded the Pac error and flogged the Atlantic routes to UA.
So no real revenues , spiraling debts….game over
But to get back on track of course the A380 does have better seat mile costs than the 747 (at least it's designed to) but that only works if the loads are there.
Get into the spectre of 20-30% loads for a sustained period- it's happened before (73, 82,90,01) and you could be in big trouble quick sharp.
Granted the airport issue is a big one (and on the original time table Airbus were talking about service entry in the 18-20 month time frame) but I wonder how many traffic reservations VS and AF have. But you can bet your booties BA will be thinking the same way and as a result are unlikely to get the 380 into their inventory before the 2009-10 timeframe.
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Colegate
(Sorry for the delay in replying... )
JAL have over 60 747s of various models, but you might be right if only referring to 744s.
Pan Am were finally sunk by the Lockerbie insurance claims & made money throughout the '70s
But you're right - one of their senior bods (might have been Rod or Bob) clearly said once that if they could swap a dozen 744s for a dozen 777s, they'd do it this afternoon.
(Sorry for the delay in replying... )
JAL have over 60 747s of various models, but you might be right if only referring to 744s.
Pan Am were finally sunk by the Lockerbie insurance claims & made money throughout the '70s
But you're right - one of their senior bods (might have been Rod or Bob) clearly said once that if they could swap a dozen 744s for a dozen 777s, they'd do it this afternoon.
