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A346 vs B77W with oil at $35

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A346 vs B77W with oil at $35

Old 22nd Feb 2016, 09:45
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A346 vs B77W with oil at $35

This is not a 'which is better' question, but one of economics. With oil at $35 (ish) a barrel, and if one considers an A346 lease cost against a B77W lease cost how do the two compare. The A346 is a great performer, with loads of container space, it must surely be a far more viable machine to have in the fleet compared to the days when oil was $100+ a barrel.
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Old 22nd Feb 2016, 22:56
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I don't know what model A340s were involved, but I recall reading maybe two years back that Airbus was potentially on the hook for several hundred million dollars for guaranteeing A340 lease return residual values as lots of A340s were coming off lease.

Lower fuel prices will help, but the extra engine maintenance will still keep the A340 less desirable than the twins.
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Old 23rd Feb 2016, 07:52
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but the extra engine maintenance will still keep the A340 less desirable than the twins.
The maintenance cost of the 4 RRs on the 346 is lower than the cost for the 2 much larger/powerful engines of any 777.
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Old 24th Feb 2016, 14:21
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Years ago when I worked at EK, they had outstanding orders for both the 340-600 and the 777-300ER. I asked someone in the know why we had orders for 2 types that essentially had the same mission and was told that if oil stayed "cheap", the 340 was the more economical airplane over 10 years. It burned "a lot more fuel" and had higher maintenance costs but its cheaper acquisition cost made up the difference. If oil got expensive, the 777 ended up being more economical over 10 years. Oil got expensive, the 340's were cancelled and the rest is history.

I would expect that with the rock bottom residual values of the 340-600, that it might not be a bad buy. The big questions would be how long oil stays cheap and how much more are maintenance costs going to be with the older machines.
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