So you need a new fleet Leigh?
If the -8 was still a goer I could imagine another 40-60 orders, but that’s without Airbus' recently announced A350-1000ULR (or whatever it’s called).
Struggling to come up with 25 city pairs that would, with competition, require circa 100 aircraft.
ME to AKL
SYD to LHR
SYD to CDG
SYD to FRA
SYD to JFK
SIN TO JFK
PER TO LHR
YYZ TO SYD
where else?
Yes, but in the meantime other operators are thinking about ULH, some are even rumoured to be eyeing Australia. If QF was to wait for the 777-8 which may be later cancelled they would surrender first mover advantage to a customer with the A350-1000ULR.
There isn’t a compelling reason for Boeing to do the -8 anytime soon. A -8F might be a different kettle of fish, but a freighter optimised MLW might be counter-productive for an ULH pax version. In any event the entire world demand for ULH can’t be 100 aircraft.
You know what this stuff costs-do you think the -8 engineering would be in the 150 million neighborhood, or am I still expecting to see 25¢ gasoline?
I don't think Boeing can do much of anything for $150 million - I suspect just the needed flight test program will cost that much. Depending on how much of the -8 engineering still needs to be done, I'd estimate the additional cost to put the -8 in production after the -9 is certified as somewhere in the $500 million to $1 billion range. Money well spent if it means another 100 aircraft sold.
The reality is, once an aircraft is flying that has the range to open up new route possibilities airlines will look around for unserved markets and fly them direct.
How about Japan to anywhere in South America. Seoul to Rio.
Perth to LA
LA to Johannesburg.
Auckland to Athens/Istanbul.
Shanghai/Beijing-Lima (as a gateway to all of South America).
I guess my point is, with every leap in aircraft range airlines across the globe have found new routes to try, this should be no different. I do realise we are getting toward a limit of unconnected points however I don’t think we are there yet.
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The problem is the longer the route, the larger the effect of the compounding nature of fuel burn as flight time increases. If you look at something like PER-LHR the B787 is around 575 Kg additional fuel burn per ton of payload (16:30 flight time) compared with 385Kg per ton and a BNE-LAX (12:00 hour flight time).
The simple economics of it is that comparing a single sector direct will always have a higher burn overall burn compared to a one stop near the mid point.
The counter point is higher maintenance costs, landing charges & pax handling charges by transiting at a stopover/hub. A hub also allows airlines to increase yield and utilisation of their network.
Routes that work well for ULH point-to-point are probably going to be a more expensive operation for an airline given the fuel vs intermediate stopover tradeoff, for which they are going to have to charge a premium. The best premium comes from a significant time reduction between two points Other airlines operating similar aircraft but with a low cost hub are likely to be able to have a lower cost base, at the expense of travel time.
In my understanding of the world, suitable city pairs for ULH are ones where a direct flight significantly reduces travel time between two cities of significance, generally financial & business centres. Airlines using the intermediate one stop model will be able to capture the non time sensitive travel at a lower cost base using similar equipment. How much of a market is there for these city pairs for Boeing & Airbus, it probably isn't likely to be an enormous market for them.
The simple economics of it is that comparing a single sector direct will always have a higher burn overall burn compared to a one stop near the mid point.
The counter point is higher maintenance costs, landing charges & pax handling charges by transiting at a stopover/hub. A hub also allows airlines to increase yield and utilisation of their network.
Routes that work well for ULH point-to-point are probably going to be a more expensive operation for an airline given the fuel vs intermediate stopover tradeoff, for which they are going to have to charge a premium. The best premium comes from a significant time reduction between two points Other airlines operating similar aircraft but with a low cost hub are likely to be able to have a lower cost base, at the expense of travel time.
In my understanding of the world, suitable city pairs for ULH are ones where a direct flight significantly reduces travel time between two cities of significance, generally financial & business centres. Airlines using the intermediate one stop model will be able to capture the non time sensitive travel at a lower cost base using similar equipment. How much of a market is there for these city pairs for Boeing & Airbus, it probably isn't likely to be an enormous market for them.
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"As Alan told the market at our financial results, we can only proceed if the business case stacks up. These aircraft represent a large amount of shareholder money and we need to have confidence about our ability to generate a good return from them. The answer may be that we’re better off returning more money to shareholders or investing more in domestic, Jetstar or our loyalty business instead." (Thanks to those QF folk, providing the enlightening insights!)
Almost perfectly timed, recently minted QFI CEO Tino La Spiv, in a thinly veiled threat to pilots about "project Bananarama" threatened to divert much needed cap ex for fleet re-equipment to "other" parts of the business, or curiously buy back more shares...Go right ahead Tino, slide your feet under your new desk.
The problem, which is soon to be yours Tino, your Boss has neglected to re-equip. Your fuel included CASK is 64% higher across the Pacifc than your competitors and your fleet age is 11 years. CAP EX is needed to be spent on fleet, otherwise you may have a relatively short career as an airline CEO. You see Tino, whilst you enjoyed your weekend, Houthi rebels attacked Saudi Oil Production. What that does to the oil price isn't yet known, but suffice to say YOUR fleet Tino just cost a bit more to run...
https://www.abc.net.au/news/2019-09-...fires/11513728
Almost perfectly timed, recently minted QFI CEO Tino La Spiv, in a thinly veiled threat to pilots about "project Bananarama" threatened to divert much needed cap ex for fleet re-equipment to "other" parts of the business, or curiously buy back more shares...Go right ahead Tino, slide your feet under your new desk.
The problem, which is soon to be yours Tino, your Boss has neglected to re-equip. Your fuel included CASK is 64% higher across the Pacifc than your competitors and your fleet age is 11 years. CAP EX is needed to be spent on fleet, otherwise you may have a relatively short career as an airline CEO. You see Tino, whilst you enjoyed your weekend, Houthi rebels attacked Saudi Oil Production. What that does to the oil price isn't yet known, but suffice to say YOUR fleet Tino just cost a bit more to run...
https://www.abc.net.au/news/2019-09-...fires/11513728
“You see Tino, whilst you enjoyed your weekend, Houthi rebels attacked Saudi Oil Production. What that does to the oil price isn't yet known, but suffice to say YOUR fleet Tino just cost a bit more to run...”
So with 787s coming for more USA destinations, the 747s days appearing to be numbered, the 380 operating at max cap, yes the tree turties getting long in the tooth, 737 fleet ageing (what’s the competition got?). Fuel goes up, subject to the hedgehogs does it not effect everyone proportionally? Me thinks you just like brewing storms in teacups........
Now back to Bananarama... Hang on that will be an all new efficient fleet or will it? The QF advantage will be the direct routes.
So with 787s coming for more USA destinations, the 747s days appearing to be numbered, the 380 operating at max cap, yes the tree turties getting long in the tooth, 737 fleet ageing (what’s the competition got?). Fuel goes up, subject to the hedgehogs does it not effect everyone proportionally? Me thinks you just like brewing storms in teacups........
Now back to Bananarama... Hang on that will be an all new efficient fleet or will it? The QF advantage will be the direct routes.
ULH is a definite advantage but it only applies to certain markets from Australia that's the USA and UK currently - several possible other stops in the USA - I guess it would make sense to extend the network in S America - Rio, Sau Paulo, ?BA? but it gets a bit low rent after that. Maybe re-enter the European market? Paris, Frankfurt, Rome?
For the rest of LH you still have to scrap it out with the local airlines
For the rest of LH you still have to scrap it out with the local airlines
Once the ULLH proves itself why wouldn’t it work for other markets?
Aussies going on holidays or business would like to go direct??? Otherwise why try? As has been said via DXB was stopped, back to via SIN... but then no new destinations. Yes it was a 747 that went to Franky apart from SIN but where else?
Call it the game changer, call it TequilaSunrise but what it is is different! No one else can compete unless doing it from home base.
Everyone said PER LHR wouldn’t work........ Is it working?
Whatever they build they will come! Straya is a remote island, an airline to survive must show initiative, I think QF does.
Shoot me down for my thoughts, it’s the Aussie way.
*ULLR I’ve called it as it’s more than current ULR.
P.S. If you really think pilot salary’s are going to determine to outcome you are all in lalala land, remember the pointy end costs are fark all compared to the operation. Even with a 6 man crew.
Aussies going on holidays or business would like to go direct??? Otherwise why try? As has been said via DXB was stopped, back to via SIN... but then no new destinations. Yes it was a 747 that went to Franky apart from SIN but where else?
Call it the game changer, call it TequilaSunrise but what it is is different! No one else can compete unless doing it from home base.
Everyone said PER LHR wouldn’t work........ Is it working?
Whatever they build they will come! Straya is a remote island, an airline to survive must show initiative, I think QF does.
Shoot me down for my thoughts, it’s the Aussie way.
*ULLR I’ve called it as it’s more than current ULR.
P.S. If you really think pilot salary’s are going to determine to outcome you are all in lalala land, remember the pointy end costs are fark all compared to the operation. Even with a 6 man crew.
Yup UULR could be a QF specialty - most other airlines (eg BA) won't bother as they can tap a lot of markets with an LR fleet
You are right about the proportion of relative costs - BUT you forget the management...
"lets see - we're not making enough profit to trigger my bonus... we need to cut costs- cheaper 'planes? Thought not.... Fuel?? Whoops ......... Landing fees???? Oh.......
SO.......... HOW do I show people I'm the very model of modern manager? Be Ruthless?? Fire the cleaners!! OK but that doesn't make much difference ... and no-one notices (for a while anyway... let's see....... those mouthy, arrogant, uniform wearing snobs who only put in a few days a month.......... hand me the list...."
PEOPLE costs are one of the few things that management actually have any control over
You are right about the proportion of relative costs - BUT you forget the management...
"lets see - we're not making enough profit to trigger my bonus... we need to cut costs- cheaper 'planes? Thought not.... Fuel?? Whoops ......... Landing fees???? Oh.......
SO.......... HOW do I show people I'm the very model of modern manager? Be Ruthless?? Fire the cleaners!! OK but that doesn't make much difference ... and no-one notices (for a while anyway... let's see....... those mouthy, arrogant, uniform wearing snobs who only put in a few days a month.......... hand me the list...."
PEOPLE costs are one of the few things that management actually have any control over
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Yup UULR could be a QF specialty - most other airlines (eg BA) won't bother as they can tap a lot of markets with an LR fleet
You are right about the proportion of relative costs - BUT you forget the management...
"lets see - we're not making enough profit to trigger my bonus... we need to cut costs- cheaper 'planes? Thought not.... Fuel?? Whoops ......... Landing fees???? Oh.......
SO.......... HOW do I show people I'm the very model of modern manager? Be Ruthless?? Fire the cleaners!! OK but that doesn't make much difference ... and no-one notices (for a while anyway... let's see....... those mouthy, arrogant, uniform wearing snobs who only put in a few days a month.......... hand me the list...."
PEOPLE costs are one of the few things that management actually have any control over
You are right about the proportion of relative costs - BUT you forget the management...
"lets see - we're not making enough profit to trigger my bonus... we need to cut costs- cheaper 'planes? Thought not.... Fuel?? Whoops ......... Landing fees???? Oh.......
SO.......... HOW do I show people I'm the very model of modern manager? Be Ruthless?? Fire the cleaners!! OK but that doesn't make much difference ... and no-one notices (for a while anyway... let's see....... those mouthy, arrogant, uniform wearing snobs who only put in a few days a month.......... hand me the list...."
PEOPLE costs are one of the few things that management actually have any control over
As for the "mouthy, arrogant uniform wearing snobs"..well they took a 30% hit last time, and you are now short of them on most fleets..B737, B787, and especially A330..firing them will make all the difference....
The problem with Angels on this forum is a little bit of knowledge is dangerous..
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"lets see - we're not making enough profit to trigger my bonus... we need to cut costs- cheaper 'planes? Thought not.... Fuel?? Whoops ......... Landing fees???? Oh....... SO.......... HOW do I show people I'm the very model of modern manager? Be Ruthless?? Fire the cleaners!! OK but that doesn't make much difference ... and no-one notices (for a while anyway... let's see....... those mouthy, arrogant, uniform wearing snobs who only put in a few days a month.......... hand me the list...."
Underneath much of the "corporate administration" of airlines is envy.
Having said that, labour unit cost is low hanging fruit. Rather easy.
It actually takes vision and strategy, to plan for, and purchase a fleet.
Unfortunately for Fort Fumble, the low hanging fruit is all picked. The regulatory limits are their targets. The targets reached they look for ways to squeeze their operating cost.
Rather like Interest rates being cut to generate more consumption; when it doesn't work do it again.
In the interim, real airline management have decided, funded and taken delivery of fuel efficient fleets.
Crew costs matter little when the Capital Generating Unit is in excess of UDS$300 million and has an expected service life of 20 years.
Fort Fumble prefers social discourse, endless media spin and not much else. Their CASK per RPK shows it clearly and no amount of Chairman's lounge memberships will hide it.
Qantas like most airline spend a lot on staff, that is total Full Time Equivalent and a lot of contractors. That includes floors of administration. That is carried in the true seat cost.
It is not their crew costs that need to be tackled.
Fix their fleet metrics and they fix the biggest item of cost (fuel), tackle the back office overhead and they will reform another, they have neither the ability nor desire to do either.
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The Irish-born boss of Australia’s largest airline, Qantas, has affirmed his confidence in Boeing as the planemaker works to improve its aircraft following two fatal crashes involving the 737 Max.
Speaking to The Irish Times, Alan Joyce said: “I think Boeing are fantastic engineering company, they will fix this issue,” adding that his airline had a “lot” of Boeing aircraft.
He said that while Qantas currently has a substantial order for Airbus Neo aircraft, the airline will next year be looking to place an order for an additional 75 aircraft with either Boeing or France-based Airbus.
Speaking to The Irish Times, Alan Joyce said: “I think Boeing are fantastic engineering company, they will fix this issue,” adding that his airline had a “lot” of Boeing aircraft.
He said that while Qantas currently has a substantial order for Airbus Neo aircraft, the airline will next year be looking to place an order for an additional 75 aircraft with either Boeing or France-based Airbus.
Interesting.
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will next year be looking to place an order for an additional 75 aircraft with either Boeing or France-based Airbus.
Other airline management simply scratches its head and gets on with it.
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I'm curious why you think that Qantas should have ordered more aircraft by now. Do you think that there are aircraft, currently in service, that Qantas should already have replaced (other than the 747-400s and ERs, which are on the way out)? Or, do you believe that Qantas will be unable to secure delivery slots to replace part of their fleet before it becomes uncompetitive - and if so, which part?
The reason I'm asking is because Qantas is highly profitable domestically, indicating that its narrowbody fleet is competitive with VA. And, although some of the fleet is aging, none of it is plainly at or approaching retirement age yet. Similarly, QFi is doing better than most of its regional competitors and, other than the 747s, none of its fleet obviously needs to be retired yet. So, unless I'm missing something, the main questions are whether QF:
The reason I'm asking is because Qantas is highly profitable domestically, indicating that its narrowbody fleet is competitive with VA. And, although some of the fleet is aging, none of it is plainly at or approaching retirement age yet. Similarly, QFi is doing better than most of its regional competitors and, other than the 747s, none of its fleet obviously needs to be retired yet. So, unless I'm missing something, the main questions are whether QF:
- should have begun replacing parts of its fleet several years before the end of its commercial life (for a Western, full service carrier), and taken any depreciation charges as a result, or
- is likely to be unable to secure delivery slots to begin replacing its regional, 737 and A330 fleets in the next few years - given that it has orders for A320neos and 787s, and the A220 and E2 orderbooks are pretty thin, that doesn't seem likely.
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"I'm curious why you think that Qantas should have ordered more aircraft by now"
1. Pilots love new aeroplanes - just like spotters (and aircraft manufacturers)
2. New types mean retraining - which adds interest & skills
3. New types means you can try and extort extra cash
4. You can hold up your head with those who have shiny new new types rather the being the girl/guy at the BBQ who has to admit they're flying an airframe that's older than they are.......
I agree with PF (new) - if you are making money why would you take on more debt etc just to have a shiny out of the box fleet? Pay yourself more, retire the debt you have , pay the shareholders and even throw a bone to the whining mob who fly the things
1. Pilots love new aeroplanes - just like spotters (and aircraft manufacturers)
2. New types mean retraining - which adds interest & skills
3. New types means you can try and extort extra cash
4. You can hold up your head with those who have shiny new new types rather the being the girl/guy at the BBQ who has to admit they're flying an airframe that's older than they are.......
I agree with PF (new) - if you are making money why would you take on more debt etc just to have a shiny out of the box fleet? Pay yourself more, retire the debt you have , pay the shareholders and even throw a bone to the whining mob who fly the things
"I'm curious why you think that Qantas should have ordered more aircraft by now"
1. Pilots love new aeroplanes - just like spotters (and aircraft manufacturers)
2. New types mean retraining - which adds interest & skills
3. New types means you can try and extort extra cash
4. You can hold up your head with those who have shiny new new types rather the being the girl/guy at the BBQ who has to admit they're flying an airframe that's older than they are.......
I agree with PF (new) - if you are making money why would you take on more debt etc just to have a shiny out of the box fleet? Pay yourself more, retire the debt you have , pay the shareholders and even throw a bone to the whining mob who fly the things
1. Pilots love new aeroplanes - just like spotters (and aircraft manufacturers)
2. New types mean retraining - which adds interest & skills
3. New types means you can try and extort extra cash
4. You can hold up your head with those who have shiny new new types rather the being the girl/guy at the BBQ who has to admit they're flying an airframe that's older than they are.......
I agree with PF (new) - if you are making money why would you take on more debt etc just to have a shiny out of the box fleet? Pay yourself more, retire the debt you have , pay the shareholders and even throw a bone to the whining mob who fly the things
Alternatvely:
1. Many pilots are over the age of 12, and realise that a jet is just a tube with some wings & engines. I think most QF 767 and 747 drivers would’ve been very happy for them not to be retired. New jets are nice, but other things are more important.
2. Who honestly wants to do yet another training course?
3. ‘New types mean you can try and extort extra cash’ - what, like the 30% productivity that was given up on the 787?
And note that Tino says he wants even more concessions beyond that 30%, if he’s to buy any more 787s. There may be extortion going on here, but it’s not from the pilots. 4. See 1.
So why take on debt for a shiny new fleet? Because your existing fleet burns a heap more fuel than more modern alternatives. Because your existing fleet starts costing a lot of money to keep in the air, and may eventually just run out of cycles and hours. And because eventually your passengers might notice that your competition is flying stuff that isn’t 20 or 30 years old. But by all means hang onto your ageing fleet and use the money on share buybacks, $24 million CEO salaries, and to pay QF Angels to write sh1t on the internet. It just mightn’t be the healthiest choice in the long term.
The main reason that QF pilots want to management to buy some new airplanes is to stop the continuous shrinking of the airline since the bullying Irishman started running the company.