British Airways Selects 777-300ER
August 1st, 2008
After pondering an order for months, British Airways finally joined the burgeoning club of Boeing 777-300ER customers by announcing a deal to buy six of the airplanes with options on four more.
While discussing first quarter results in which fuel costs have risen by 49%, the carriers profits nosedived over 85% to just £37m.
Earlier on this week, low fares rival Ryanair also posted abysmal results.
“We have ordered six new Boeing 777-300ER aircraft for delivery beginning in 2010. They are 23 per cent more fuel efficient than the Boeing 747-400 and give us additional flexibility in the longhaul fleet,” says CEO Willie Walsh.
Surprising is the absence of reference to any potential order for the A350-1000, which despite being the largest Airbus twinjet, is still smaller than the 777-300ER and not available until 2015 or beyond at the earliest. BA’s decision may have partly been influenced by the inherent success of the 777-300ER and also the favourable 2010 slots, just a year after it takes delivery of 4 Boeing 777-200ER’s (2009).
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As opined several months ago, the decision to select the 777-300ER is one that BA could ill afford to miss out on. It could have chosen to wait for the A350-1000 yet miss out on lucrative cost savings on the 777-300ER, which still has the advantage of being able to haul at least an extra 6 tons of freight (based on Emirates configurations/mission rules).
BA’s reliance on underbelly freight capacity would have taken a major hit with the A350-1000, and while the said airplane itself struggles to overcome weight and range issues, BA’s selection of the class winning 777-300ER was almost a “foregone” conclusion. Just looking at BA’s figures today, it reported a jump of 21% in cargo revenue - nothing to be snubbed in a climate of high competition and rising fuel costs, which the carrier cites as being the equivalent of £8m a day.
Qantas too had been eyeing the 777-300ER in the wake of the 787 delays and as an alternative 350-seater to fly selected Pacific-Rim routes. Given BA’s early slots for the type, and the recent management change at Qantas, we may yet see the Australian carrier buy the big Boeing twin, although there is no guarantee that it could get similar delivery slots.
Willie Walsh had mentioned previously the “flexibility” he had for airplane orders, particularly since BA too is on standby while the 787 has yet to be delivered. It may well appear that BA’s relationship with GE may also be on the mend. Should we expect to see a 747-8I order?
It’s a distinct possibility given that BA had no choice in the engine selection of the 777-300ER. As the airline prepares to phase out some of its oldest 747-400’s and with a projected service entry of 2010 for the 747-8I, Boeing still has an outside chance to fill the void beneath the airlines A380-800’s (due for delivery in 2012) and its 777-300ER fleet.
Pending a merger with oneworld partner, Iberia, the likelihood of the Spanish carriers A340’s being dropped in favour of more 777’s and 787’s becomes more attractive to maximise the operational and fleet synergies between the two going forward.
“The combined balance sheet, anticipated synergies and network fit between the airlines make a merger an attractive proposition, particularly in the current economic environment,” says Walsh.
In sticking with its policy of not opting to be a launch customer, BA may yet order the A350-1000. However, now that the 777-300ER has finally found a way into the fleet setup, the prospects of BA buying more 777’s (and 787’s) instead of A350’s increases.
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Entry Filed under: Aeroplane, Aerospace, Air Transport, Air Travel, Airlines, Airplane, Airplane Order, Airplanes, Airport, Airports, Aviation, BA, Boeing, Boeing 777, Boeing 777-300ER, Boeing Orders, British Airways, Willie Walsh
16 Comments Add your own
1. Chris Wallace | August 1st, 2008 at 2:13 pm
I imagine BA will order a brace (20?) of A350-1000s, as they will need something to service current 747-400 destinations that will not see the A380-800.
But the 777-300ER is the right plane at the right time for BA. It carries almost as many people as their 747-400s, but the ratios can be slanted towards premium (FIRST, Club World, World Traveler Plus) cabins and BA can reduce World Traveler seating, which is likely suffering some pressures as leisure travelers fly less.
BA still should have ordered the 747-8I in addition to the A380-800, but at least they are addressing their immediate and near-future needs.
2. keesje | August 1st, 2008 at 10:58 pm
777-300ER seems a rational short term decision. A350-1000 was no real alternative short term.
More exiting times could come if BA makes a decision on how to replace their large 777-200ER fleet on long haul.
Another decision will have to made on the rest of the 747-400 fleet..
3. Falcon | August 2nd, 2008 at 10:25 am
Surprising is the absence to any potential order for the A350-1000, which despite being the largest Airbus twinjet, is still smaller than the 777-300ER and not available until 2015 or beyond at the earliest.
???
4. Cheesedog65 | August 2nd, 2008 at 3:43 pm
… 777-300ER, which still has the advantage of being able to haul at least an extra 6 tons of freight
.. and it has an empty weight of 15-20 tonnes more as well. Those 6 tonnes of cargo better be fine art or Ming vases.
The more likely reasons they went for the 777-300ER:
- The 787 is delayed so they got a good deal from Boeing as compensation
- Boeing made their offer favor -300ERs over -200ERs
- The 777s are available in the short them
The 777 is a great plane but to believe it will be competative against a new plastic one is to be as naive as Airbus was with its early a350 models against the 787. That said there are still 5-6 years more sales left for the 777 and probably 10-15 years of production.
5. Cheesedog65 | August 2nd, 2008 at 3:55 pm
Should we expect to see a 747-8I order?
Dream on, the 747i has flopped and furthermore, as you say yourself, BA isn’t an early adopter. The A380 flew for 2.5 years before BA committed andthat was probably a record for them.
Boeing now has a great opportunity. The 747i has so few sales that it can be scrapped and all the engineers transferred to boosting 787 production. Seems a much more profitable idea to me than continuing with the 747i.
6. Chris C | August 2nd, 2008 at 5:44 pm
“Should we expect to see a 747-8I order?”
I would definitely agree with Chris Wallace and others that British Airways should’ve opted for the highly-efficient -8I as well as the A380. The two levithans compliment each other well in BA’s fleet network. BA has been on the record several times saying that the 747-8 certainly has some compelling attributes for BA. I think BA will re-evaluate the 747-8 for sure.
As for some people having “ideas” on how Boeing should spend their resources on the 747…ha! How cheesy! The 747-8I is a niche market airplane and will be a successful airplane. It’s in a similair niche as the 777-200LR…great airplane. It’s always amusing how so many people make the drastically flawed mistake as ruling out the new 747-8I…it’ll do just fine. If only those critics knew what lay ahead… : )
7. Cheesedog65 | August 2nd, 2008 at 10:56 pm
You think BA should have opted for the 747i, why don’t you like BA? The 747i is a niche alright. So niche it has 1 customer. I love your boundless optimism in the face of so few sales.
How does a flawed mistake differ from a regular one? The real mistake is to starve a highly successful program that is behind schedule to feed a sick old dog no one wants. They should just take it out behind the garden shed and shoot it in the head.
8. Chris C | August 3rd, 2008 at 12:21 pm
I think BA is a fine carrier. Where have I indicated that I don’t like BA? My optimism remains firm for the phenomenal 747-8I as it really is an incredible airplane, period. I have a whole host of reasons why I believe in the -8I, and yes, there is still plenty of opportunities out there for many more sales. People tend to over look the fact that after the launch of the 747-8, Airbus has only secured British Airway as a new, major customer…and one that very, very nearly went to the new 747.
The A380’s order book is really dismal for a multi-billion dollar airplane program. Yes, it’s a fantastic airplane in many regards, but it really is having a tough time trying to break the 200 firm order mark…after nearly a decade on offer.
The 747-8 is doing just fine, and no matter how upset the critics get, this airplane will be a big success. Who knows, when the last A380 retires, the crew will be flown home in a 747-8.
9. Jeffo04 | August 3rd, 2008 at 10:40 pm
Chris C:
Yea…only 198 orders for the A380 and only 3 new orders this year…they need to sell 420 to break even on the A380 program…if this continues this might become the biggest white elephant ever…only time will tell
10. Steve | August 4th, 2008 at 11:10 am
Surprising is the absence of reference to any potential order for the A350-1000
Why is it surprising? The -1000 is being considered by BA as part of their major relacement RFP. This lease/buy deal for 77Ws is a tactical order. What will be decided later this year is the strategic decision. Don’t confuse the two.
11. BOEING777 | August 4th, 2008 at 11:16 am
Surely one would surmise that locking in an A350-1000 order sooner rather than later would ensure good delivery positions?
The A350 is pretty much sold out through 2017, 2 years after the targeted EIS of the -1000.
(Pre-emptive measure rather than reactive, vis a vis the 77W order?
)
12. Steve | August 4th, 2008 at 12:41 pm
Surely one would surmise that locking in an A350-1000 order sooner rather than later would ensure good delivery positions?
Who’s to say they haven’t already (if they’ve made their long-term decision)?
You’ll be seeing another major airline lining up A350 delivery positions very shortly.
13. boeing investor | August 4th, 2008 at 4:27 pm
“The real mistake is to starve a highly successful program that is behind schedule to feed a sick old dog no one wants.”
Hm, sounds just the recipe for the A380 as well!
14. Jacobin777 | August 4th, 2008 at 7:14 pm
What’s interesting is according to this ATWonline news, Boeing might have a B777 replacement between 2020-2025….that would be only a few years between BA
would be able get A350-1000 slots (unless Airbus have a few reserved, which they might)….
I think if Boeing can improve the operational numbers of the B77W, offer BA some good prices and get to work on the B777 replacement, BA could certainly order more B77W’s and wait for a potential “Y3″….IMHO of course.
http://www.atwonline.com/news/story.html?storyID=13555
15. Steve | August 7th, 2008 at 9:00 pm
Boeing’s order update this week shows BA has ordered 2 77Ws. So the “rumours” that they were leasing the remaining 4 from GECAS seems to be accurate.
16. John Smith | November 10th, 2008 at 5:14 pm
This is a cool site!
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