…Down & Out
Is that the new catchphrase for the clientele formerly accustomed to flying in first class?
IATA has said for months that it doesn’t expect to see any meaningful industry-wide recovery anytime soon and the inherent collapse of first/business class travel means that moves to cut back on this once much sought after product could catch on very quickly.
As mentioned before, the only major full-service airline to have done away with first class altogether was Air New Zealand, who like other carriers is struggling with falling traffic, but is now much less reliant on these premium-paying passengers for its bottom line.
Qantas‘ decision to scrap first class on a handful of routes for a few months is hardly a surprise given Alan Joyce’s admission that first/business class traffic had dipped around 30% – like its oneworld partner British Airways (BA), Qantas has been hit hard with traffic falls in the Asia-Pacific Rim region.
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The murmurs from within BA already point to a questioning of the wisdom behind the 2007 “purchase” of Airbus A380′s, whose very essence was a key focus for premium seating as well as deployment to hubs such as Singapore and Hong Kong.
Given Airbus’ decision to finally cave in and enact a production cut to the A380, it would not be at all surprising to see BA defer its order by around twelve months – in part to better cope with traffic fluctuations and also because BA still quite hasn’t figured out what it will do to address the loss of high yield cargo on flights the A380 will operate on because of its dismal space gobbled up by baggage.
(Although if you’d been unfortunate to waste your life reading some other ”me too” wasted media machine – you’ll have been informed that BA had “dropped” its first class product altogether- which is so hopelessly incorrect, it makes me want to go out and buy a BA first class ticket to anywhere just to prove how wrong this assertion actually is…)
While BA aims to stand down sixteen airplanes, including 8 747-400′s; capacity cuts on their own do not address the fundamental shift in recent consumer spending habits – namely that premium economy and a feel-good factor dished out by low cost airlines have become the defacto “new first class”.
Of course, the biggest question in this traffic-falling conundrum resonates simply as “who’s next” to halt sales of first class tickets.
We mentioned before that airlines will have little choice from here on in other than to shift focus to route-centric demand – Qantas’ move here is indicative of that and others will follow suit should the latter half this year be just as dire as the former.
Air New Zealand on the other hand may be pleased it has edged out its neighbouring rival in this field and rightfully so – but in an industry aligned with a “follow the leader” mentality, this is ultimately one path that few carriers can ignore or avoid - particularly those for whom the A380 was touted as the big bird for business travellers.
But with yields falling and no sign of a bottoming out, the plethora of A380 deferrals has shown its business case is under very close scrutiny. Quite simply, if traffic models continue to shift emphasis away from high price customers to lower ones, then customers for the A380 will be queuing up for a long walk off a short pier.
Should we expect then a new premium economy from Emirates too?
I wouldn’t wager against it.
Things will get worse if they haven’t already – before they get better – for customers, discerning between who has the better premium economy/economy class could be the real marketplace battle that many consumers for years have been wanting to see.
Maybe they’ll get that contest after all?
36. MPTA-098 | May 27th, 2009 at 17:14 said,
Looks like some people are unaware that SQ’s two daily A388 flights and one daily 77W flight to LHR already carries more passengers than the three SQ 747-412 flights that used to fly the route.
Three daily flights are not enough to put such a big aircraft. In my very simple “simulation” using my pocket calculator and colored paper strips, I found out that you need about FIVE flights to allow only ONE 450 seater.
35. boeing investor | May 27th, 2009 at 15:09
I’m sorry but you’re being silly – are you suggesting that cattle class is not profitable?
Since first class is empty and business class sees low demand these days, adding y-pax will improve yields (empty seats don’t pay and the (average) price of any class ticket is at least the cost for those (filled) seats)
51. Vero Venia | May 28th, 2009 at 07:15
Huh, are you suggesting any route is unprofitable for 450+ a/c unless it’s serviced by a minimum of 5 flights a day?
If so, what was that link again where you detail your estimation?
48. Leelaw | May 28th, 2009 at 06:29
Was the airline industry just a fraction of it’s size? in number of aircraft that is, not pax/miles flown.
It was smaller, I’m sure – but the 747 was a much larger improvement over it’s predesessors than the 380 can be (law of diminishing returns).
Also, the ability to buy combo, or quickly change an 747 from pax to freight must have helped a lot. If the seats can’t be filled (yet), fill the floor.
The suspended animation of the 38F if Boeing’s Biggest Success for Decades – that includes the 787.
52. ikkeman | May 28th, 2009 at 09:22 asked, “Huh, are you suggesting any route is unprofitable for 450+ a/c unless it’s serviced by a minimum of 5 flights a day?”
Yes sir.
If you do not want to take too much risk and keep a maximum flexibility in order to keep the concerned route profitable even when there is a downturn like the one in which we are living today, you need high frequency before you can put a big or a very big aircraft.
I can’t link you to my pocket calculator and my colored paper strips. But you can do it yourself. It takes you about six hours of “simulation” trying different configurations of aircraft on the route.
Perhaps clever people can do the same using Excel, but I love doing things the “old” way. It’s more visual and more intuitive.
If you want to do it, imagine a route with a big enough traffic (don’t forget your competitors). Then you allocate your aircraft to the route. Now, introduce variation to your passenger flow (V=U +/- u). You also have to consider that passenger flow V is seasonal. Cut colored paper strips (your fleet) and put seat count on each. I put Red for 460 seater, Blue for 274 and 325 seaters and finally Green for 230 and 274 seaters.
Run your simulation and draw your own conclusion. Don’t forget the notion of “spill” during the simulation.
Frankly, I was shocked the first time I have to make that conclusion. I ran again the simulation and came to the same conclusion.
I admit that there may be specific conditions that push you to put big or very big aircraft on your route. But I think, if you take into account the risk correctly then you come to the same conclusion as mine.
That’s the reason why I understand today why Boeing estimated about one hundred 747-8i to sell. The market of 450+ seater is small and a significant chunk of that market has been taken by the A380. Don’t expect to see many A380 and 747-8i sales in the coming years.
http://verovenia.wordpress.com/2009/05/18/dreamfleet/
Vero Venia: “Three daily flights are not enough to put such a big aircraft. In my very simple “simulation” using my pocket calculator and colored paper strips, I found out that you need about FIVE flights to allow only ONE 450 seater.”
With all due respect, you’re not making a living out of doing such analysis, are you?
Your seriously flawed moddeling does not take into account that long-range international services differ form domestic services in that of time-zones. Departures from Asia to Europe, for example, are primarily concentrated in the late evening, in order to arrive in Europe early in the morning. To dispatch a flight from Singapore at 3 or 4 AM is not feasible at LHR. Because of this overlooked fact, you have a bunch of departures within a very narrow time window on these routes.
Boeing investor: “Whichever way its sliced, the A380 does not have the lowest trip costs right now and no matter how many sardines you pack into it – it will not make money. I bet SQ’s sole 777-300ER flight to LHR, for example, makes it more money than does one A380-800 flight any any given day.”
Actually, due to the “collapse” in lower deck cargo demand, SQ’s 77Ws additional cargo revenue potential has currently no, or little value over that of the A380. And since the CASM of the A380 trumps that of the 77W, you’d better present the current load factors in Y for SQ’s 77W and A388 flights respectively on the LHR route. If not, your “bet” that the 77W makes more money on the route is nothing but an uninformed opinion.
“Way back in July 1974, approximately 100 months after the program was launched, when the airline industry was only a fraction of its current size, Boeing had delivered 238 747s.” Leelaw
So what?
@ Ikkeman
Of the 238 747 deliveries through July 31, 1974 I cited in my earlier reply, two were 747-200Fs, three were 747-200Cs, and no 747-200Ms had been delivered yet. Isn’t that essentially immaterial to the total? IMO, it’s futile to seek parallels/comparisons with the “early” history of 747 program in order to rationalize the financial black hole and marketing failure that is the WhaleBus[t], because upon close scrutiny they all prove to be essentially meaningless.
MPTA-098
“your “bet” that the 77W makes more money on the route is nothing but an uninformed opinion.”
Rather akin to your modelling in favor of the A380 on the LHR run too. But I digress.
Ikkeman
“I’m sorry but you’re being silly – are you suggesting that cattle class is not profitable?
Since first class is empty and business class sees low demand these days, adding y-pax will improve yields ”
I didnt suggest it wasnt profitable – rather, its not as profitable.
Load factors will go up, not yield if all a carrier does is add econ passengers in place of First or Business. The costs for moving more econ customers is higher than a handful of First class people and their revenue is offset by added fuel costs etc.
Simple math –
10F, 35Biz and 150Econ.
0F, 12Biz and 220Econ.
Very simplified, but which one will make more money? (route/pricing specifics not necessarily required for such a basic model)
“So what?”
The comparison is intended to show that the 747 program was a commercially viable enterprise 100 months after its launch, while the WhaleBus[t] program 8 1/2 years after its “industrial launch” an essentially moribund project still in search of compelling business case for its manufacturer. But I’m never gonna convince a dye-in-the-wool Airbusier like you, am I?
boeing investor: “Rather akin to your modelling in favor of the A380 on the LHR run too. But I digress.”
Wrong, you bet the 77W is doing better on this route without presenteng a shred of evidence. It’s not “modelling” to state that the A388 is beating the 77W on CASM. SQ’s A388s have an average fuel burn of around 47-49 percent more per trip than SQ’s 77Ws, while carrying 50 percent more seats in F/R, 43 percent more seats in C, and 75 percent more seats in Y. For the sake of argument, and assuming equal (percentage) load factors in F/R and C, it’s clear that the A388 has a lower break-even factor in Y than the 77W.
Again, failing to come up with some sort of documentation supporting your “bet” that the 77W supposedly makes more money on the LHR route, is still nothing but an uninformed opinion.
Leelaw sez “So what?”
Air commerce is like a lot of other things. You’ve got to balance “one big daddy” against a broad based, flexible model of marrying demand and supply. Like the notion of distributive power in the electricity business.
Depending on who you are and where you are in time and space, these polar opposite models can be useful, but we’re starting to see the advantages of Deming flexibility and adaptability as compared to Taylorist rigidness of structure and ‘one best way’.
Of course Taylorism was good in its time, but what it did not do was recognize and value the individual-something we now see is of signal importance. Taylorism was the best system in the days of the tin Lizzie, but it’s an idea whose time has come and gone.
And therein lies the difference between the view from Seattle and the view from Toulouse. One is rooted in the past and one looks to the future.
Look at it another way. Moving lots of stuff (cargo, people, it doesn’t matter) at one time in big shipments has its advantages if you’ve got all the demand you need and all the time in the world. But if demand is spotty or uncertain, you don’t need a Kenworth when a Ford pickup will do as well. What Boeing’s said is that, all things being equal, a fleet of Ford pickups going anywhere you want when the customer asks is better than a single Kenworth.
So. Lemme have a ‘nother swig of Koolaid, ‘Law. All this infernal palaver is making me thirsty.
Leelaw,
So I guess the C-17 wasn’t on commercial terms for McDonnell Douglas then?
Where have I said the A380 has a compelling business case? What I find interesting is how many people show such a hatred for the A380 that they use different yardsticks for it, can’t look at it as just another program. Then of course if they get questioned they must claim Airbusier
Using the same yardstick my outside view says there were valid business reasons to launch the A380 but it never had a large upside. The delays killed it. Now it is a matter of what is the best option from here on. Will continuing bring better net result than shutting down production? I don’t have the answer and I doubt you do.
If being prepared to use the same yardstick for everything I evaluate makes me an Airbusier then I’m proud to wear that tiltle. Sadly, I don’t think it us how it should be measured.
“SQ’s A388s have an average fuel burn of around 47-49 percent more per trip than SQ’s 77Ws, while carrying 50 percent more seats in F/R, 43 percent more seats in C, and 75 percent more seats in Y. ”
Equally, you failed to provide any meaningful numbers to refute my bet either.
Yours too is nothing but an uninformed opinion with nothing to substantiate your claims. Just because the A380 has more seats etc etc, it does not mean they’re full.
I’m surprised commentor “Heathrow Guy” hasnt come into the fray – seems he has some insight into SQ’s LHR services.
“Yours too is nothing but an uninformed opinion with nothing to substantiate your claims. Just because the A380 has more seats etc etc, it does not mean they’re full.”
Again, mine is an informed opinion which is based on fact: A380 CASM is lower than 77W CASM because SQ’s A380s proportionally need less passengers in Y than SQ’s 77Ws to break-even (assuming same proportional load factors in F/R and C, and not the least; little, or no demand for additional lower deck cargo revenue). It looks like SQ’s A380s are doing “ok” in Y in the LHR route. For SQ’s 77W to “make more money” [or loose less money
] in this economic environment, it needs a higher relative load factor in Y than the A388. Simple as that.
I think if the airlines simply take out (remove) 1/3 of all the seats they’ll get better fuel economy (because a lighter load) AND passengers might feel happier being less cramped.
I’m not sure where the revenue vs fuel economy equation becomes optimum, but at the same time IF so many planes are half empty already why keep flying the extra weight around ?
At the same time, I think every airliner ought to be convertable (at least partially) to cargo anytime the airline feels the need.
54. MPTA-098 | May 28th, 2009 at 11:25 said, “Your seriously flawed moddeling does not take into account that long-range international services differ form domestic services in that of time-zones. Departures from Asia to Europe, for example, are primarily concentrated in the late evening, in order to arrive in Europe early in the morning. To dispatch a flight from Singapore at 3 or 4 AM is not feasible at LHR. Because of this overlooked fact, you have a bunch of departures within a very narrow time window on these routes.”
That is exactly why there won’t be many A380 and 747-8I sales in the coming years. VLA market is a small niche market.
What you forget, the destination for a traveler is not LHR but LONDON. There are many airport around London.
Another thing you forgot, is the fact that the most dense routes are below 4,000 nm.
Surprise? Oh yes it is very surprising but that’s the reality.
Please let me remind you a very hard fact about the VLA.
Launched in December 2000, the A380 has garnered only 200 orders in 2009 (in almost nine years).
Launched in 2006, the 747-8i has today 27 orders.
What can you expect in the coming years?
Don’t forget that many A380 and 747-8i were ordered before the launch of the A350-1000XWB. The A350-1000XWB, as specified today, is much better for long haul than the A380, 777-300ER or the 747-8i.
Vero Venia: “Another thing you forgot, is the fact that the most dense routes are below 4,000 nm.
Surprise? Oh yes it is very surprising but that’s the reality.”
Never knew that, Vero. Not that I want to dispute you, but do you have a source for this and other route info? That would make it tough to sell Whalejets & 748Is.
“CASM is lower than 77W CASM because SQ’s A380s proportionally need less passengers in Y than SQ’s 77Ws to break-even”
If the A380 had just econ pax and the 77W had just econ pax, any mathematician will tell you that the A380 is not the cheaper option. Period.
Your uninformed opinion has and relies upon too many variables which you are skewing to falsely justify than a heavier airplane that uses more fuel for the same number of pax from Singapore to Heathrow somehow costs less to operate than a 777-300ER.
67. Aurora | May 28th, 2009 at 22:10 said, “Never knew that, Vero. Not that I want to dispute you, but do you have a source for this and other route info? That would make it tough to sell Whalejets & 748Is.”
Very long routes above 6,000 nm are “usually” relatively thin routes. If you wish to know more you have to get access to databases like the one offered by OAG. http://www.oag.com/oagcorporate/
I agree with you that it will be very tough to sell A380 and 747-8i.
The issue when you are trying to sell those aircraft is more about “risk management” than simple frequency vs capacity debate.
Today, some airlines learn the hard way that big and very big aircraft are inherently risky (in financial terms).
As much as a fan and supporter of the A380 program as I am, thanks to the benefit of 20-20 hindsight the program would not have been overwhelmingly successful even if it had been on time and on budget.
The 777-300ER was just too damn good.
And what I mean by that is all the 747-400 airframes Airbus expected to be replaced with A380-800s were instead replaced by 777-300ERs. Part of this was because the 777-300ER matched the 747-400′s range. Part of it was the 777-300ER is more economical to operate. And part of it is the significantly more voluminous cargo holds.
I know many claim that airlines only ship luggage and atmosphere in their holds, but the fact is the A380-800 was designed to offer about as much space after passenger bags as the 747-400 does while the 777-300ER offers a dozen or more extra positions beyond that.
In 2000, Airbus believed they would sell 1000 A388s and Boeing believed they would sell a couple hundred 777-Xs (77L/77W/77F).
But in 2010, it looks like it is the 777-X that will reach 1000 (well, maybe 750) while the A380 is struggling to stay north of 200.
And Airbus didn’t announce the EIS delays until the middle of the largest airline ordering boom in at least recent history so it really cannot be considered the sole and root cause of the A380′s sales trend. And if airlines were clamoring for a VLA, they could have had the 747-400 during that time, but they didn’t buy it or the A380.
I admit to being skeptical of the original 250-frame “break-even” point. I firmly believe the A380 will never recover it’s costs, much less make a profit, but I am also firmly on record as saying that doesn’t matter and bringing it up serves no purpose other then to make pedantic snipes, IMO. Airbus didn’t have anything else to spend the money on and they had no private shareholders to return that equity to in the form of dividends or such (the shareholders were the governments and they already were receiving a dividend in the form of all the taxes and RLI interest payments and royalties Airbus was making).
As for customer preference, it stands to reason that SQ, EK and QF have substituted the A380 on their most popular departures, which would have formally been run with 747-400s. So I expect it’s not so much a case of passengers specifically booking the A380 as passengers continuing to book the departure that best suits them and that departure just happening to be operated with an A380 instead of a 747.
I have flown the A380 in First Class and I do like it far more then the 747, but then I also like the 777 in First Class far more then the 747. I don’t like the nose – it’s cramped with 12 seats.
But if the choice was a 747 at a convenient time or an A380/777 at an inconvenient time, I’d take the 747.
And in the interests of full disclosure, I drive a Lexus L600h.
BI wrote “If the A380 had just econ pax and the 77W had just econ pax, any mathematician will tell you that the A380 is not the cheaper option. Period.”
Do you define cheaper as trip cost or cost per seat? If by trip cost then sure but a 737 or A320 would be even cheaper.
If you got it right and mean cost per seat the just for fun I showed your comments to my friends at the leasing company. Granted they have neither A380 nor 77W in their portfolio but I trust what they said way above you and to be nice they said you’re wrong. Simply put, if what you claim was true, most of the A380 orders would never have happened and every single one would have been canceled by now.
We are all familiar with your SOP so I expect you to through some “stupid” and similar FOD but nothing substantial.
Falcon sez “So I guess the C-17 wasn’t on commercial terms for McDonnell Douglas then? ”
No, it wasn’t, and I was there. First major difference. Uncle Sugar paid for the development starting back in the mid seventies and progressing until it seemed that the C5, although an admirable s**t hauler had its limitations, most importantly that of the runway length that it required. Parenthetically, Lockheed made many efforts to derail the C-17 with C5 vaporware variants.
Here’s what Uncle said to Douglas: “Here’s what I want. I want an airlifter that’ll put an all up, ready to fight M1 Abrams tank and crew onto a 5,000 foot unimproved strip, and will do it with three crew members. I want to drive it out onto the battlefield. And I want it to do a lot of other stuff as well but that there is the primary mission. Here’s the checkbook, make it happen. Oh, and by the way, I am also paying for a brand new building to make it in and all new tooling which will be mine.”
When you’ve ridden the handcar down through the belly under the floor as I have, and seen what’s there for floor beams, you know exactly what it was built for.
There was no speculation about potential markets although everyone realized that if the deliverables were good enough, a lot of them would be built and sold to a lot of people, because people would soon figure out if you have that much in the way of heavylift capacity and short field-high and hot capability, you’ll think of all sorts of interesting and useful tasks for it.
The aircraft was designed around the mission rubric. Commercial productions are a little bit different. There, you actually have to go out and sign people up and sell them on the utility of your product. And even then they have money problems down the road which makes the whole notion of firm orders kind of tenuous even in the best of times.
Boeing Investor sez “Just because the A380 has more seats etc etc, it does not mean they’re full.”
That’s the entire point of this whole discussion, which some people seem to ignore. If you build it, they may not come.
“We are all familiar with your SOP so I expect you to through some “stupid” and similar FOD but nothing substantial.”
Had it not been for your needless ignorance, I’d have happily clarified my point to you. Since your fence-sitting goad attitude has kicked in, you can forget it. No its not a “cop out” – I’ve been more than respectful on this discussion and your salvo here was unwarranted frankly.
“Boeing Investor sez “Just because the A380 has more seats etc etc, it does not mean they’re full.”
That’s the entire point of this whole discussion, which some people seem to ignore. If you build it, they may not come.”
This is why MPTA-098′s argument holds zero credibility on whether the SQ A380 makes more money than 77W on SIN-LHR flights.
70. Chris Wallace | May 28th, 2009 at 23:56 says, “And in the interests of full disclosure, I drive a Lexus L600h.”
Is it as good as I imagine? I mean is it quiet and comfortable?
70. Chris Wallace | May 28th, 2009 at 23:56 said, “The 777-300ER was just too damn good. “
The 777-300ER is good, but it is not as good as it should be. There is much room for improvement for the 777-300ER.
I would qualify 777-300ER’s virtual monopoly in the 300-400 market as an “anomaly” in recent aviation history. The 777-300ER does not have any serious contender and that is why it is where it is today. It is even more surprising that the first possible contender will enter into service only in 2015 or 2016.
I think the luck of the 777-300ER is due to Airbus’s appreciation mistake concerning the progress of technology. I still remember about this very interesting article http://www.flightglobal.com/articles/2003/01/21/160569/airbus-calls-for-lrops-unity.html
Boeing bet on the progress in engine technology (automatic relight, engine monitoring system etc) and built their product strategy around efficient twins. In my humble opinion, the A350XWB launch is a kind of endorsement of Boeing’s strategy.
You can hardly deny that twins now fly most long range routes. http://www.boeing.com/commercial/aeromagazine/articles/qtr_2_07/article_02_6.html
57. boeing investor | May 28th, 2009 at 14:42
all other things being equal, and with the demand to fill any of the higher class seats, and with demand to fill the empty space in the belly those “high profit” pax leave – yes, you’re right… now show me
a: that the 77W is in any way equal to the 380
b: that the demand exist (in near or mid term) to fill any of the expensive seats
c: see b for cargo
d: you fail to take into account the difference in CASM.
CASM of the 380 is greater simply because it burns less fuel per floorspace. anyway profit you make from the 777 you can make from the 380 while offering your pax more space – or offer them the same space and carry more of them, increasing profit.
Ofcourse this assumes the demand exeeds the 777 sulpplied ASM by some 25%.
68. boeing investor | May 28th, 2009 at 22:20
are you a mathematisian – at least you’re not a real reader, are you – he was talking Cost per Available Seat Mile – That’s cost divided by (number of seats multiplied by range). Yes the 380 is more expensive to fly, but the question is one of Return On Investment.
76. ikkeman | May 29th, 2009 at 08:52 said, “Yes the 380 is more expensive to fly, but the question is one of Return On Investment.”
Today, some airlines learn the hard way that investment in big and very big aircraft is inherently risky.
“What I find interesting is how many people show such a hatred for the A380 that they use different yardsticks for it, can’t look at it as just another program.”
I don’t hate the A380 per se, I think her wings are among the most magnificent things ever manufactured by man. I’ve been a passenger on her three times now, and have thoroughly enjoyed the ride, save for some drunken Aussies on my first trip who were way too loud in a very quiet cabin… However, as a student of the history of this industry, what I do dislike, indeed find repugnant, are the false historical parallels/revisionist history employed by some to blithely rationalize away the industrial, financial, and marketing failure that is the “WhaleBus[t]” program. I also find it annoying that those who raise legitimate questions about various aspects relating to the A380 program are immediately labeled as “bashers” by the die-hard (often fatuous) A380 aficionados.
As if we needed more validation that long haul and premium were suffering. A perspective from Asia:
http://www.flightglobal.com/articles/2009/05/29/327123/asian-carriers-most-adversely-affected-by-downturn-aapa.html
“Business traffic and long-haul leisure traffic will take longer to recover, he says, adding that “people don’t make impulse buys for long-haul trips.”
Herdman declines to say when the recovery in long-haul travel will begin because it depends on when the North American and European economies recover.”
Again, it comes down to filling the planes.
ikkeman sez “b: that the demand exist (in near or mid term) to fill any of the expensive seats
c: see b for cargo
d: you fail to take into account the difference in CASM.
CASM of the 380 is greater simply because it burns less fuel per floorspace. anyway profit you make from the 777 you can make from the 380 while offering your pax more space – or offer them the same space and carry more of them, increasing profit.
Ofcourse this assumes the demand exeeds the 777 sulpplied ASM by some 25%.”
Youse guys are always talking about CASM as if it’s some sort of magic mantra that expunges all the other bad stuff.
I personally think you do it because it sort of sounds like “orgasm”-that wet and creamy feeling you get when Il duce John Leahy opens his mouth for yet another pronunciamento or when Barbara Kracht sets the record straight with yet another Papal Bull Against the moon-now THERE’S a name, huh?
All humor aside-which I doubt any airbus fanboys will appreciate- let’s dissect a little.
Cost per available aircraft seat mile is a squishy concept and it really comes down to what you put in and what you leave out. If we take it as steady state cruise fuel burn divided by the available number of seats, that’s one index. But it’s inadequate as an apples to apples index of comparison because it assumes that all seats are full. On the other hand, if we take steady state cruise fuel burn divided by available seats and all those seats are really full of people and baggage, all of a sudden your steady state cruise fuel burn goes to pot.
Here’s how that figure varies from the real world. Hypothecate a Cessna 172 with three passengers and a pilot en route from Des Moines to Omaha. Then run the same route with an A380 with three people on board.
The cost per available seat mile doesn’t vary, but the reality is that in the one case, the vehicle is not properly married to the available carriage. So which is really more efficient?
It depends on casm, of course, but that is ONLY a starting point for the discussion, rather than a destination or the ultimate arbiter. One of the more significant indices of efficiency is whether you actually have the aircraft you were promised to run your route.
Real world comparative efficiencies takes into account a lot more than a synthetic efficiency index that leaves out more than it includes.
Now. Trouble me no more about casm.
Vero Venia: “That is exactly why there won’t be many A380 and 747-8I sales in the coming years. VLA market is a small niche market.”
On the contrary, the bean counters at the blue chip Asian/Australasian airlines (and their European competitors) want to maximise profit and i.e. will consequently maximise CASM and fly one A388 ( later on the A389) instead of managing two departures within an hour in the late evening on smaller aircraft such as 77Ws and/or A35Xs; at a time of the day when “frequencies” truly are irrelevant!
Vero Venia: “What you forget, the destination for a traveler is not LHR but LONDON. There are many airport around London.”
Come on, you’re making this up, aren’t you? Why, for example, are the major american airlines clamouring to get into Heathrow due to the open skies treaty? Blue chip airlines are NOT going to land at STN, and LGW is seemingly not that sought after by the blue chips either.
Vero Venia: “Another thing you forgot, is the fact that the most dense routes are below 4,000 nm.
Surprise? Oh yes it is very surprising but that’s the reality.”
On the major routes from SEA and NEA to the major european hub airports, significantly you’re on average more than 1,000 nm short (“great circle”), and that’s the reality.
http://gc.kls2.com/cgi-bin/gc?PATH=bkk-frasin-lhrhkg-lhrhnd-cdg&RANGE=&PATH-COLOR=red&PATH-UNITS=nm&PATH-MINIMUM=&SPEED-GROUND=&SPEED-UNITS=kts&RANGE-STYLE=best&RANGE-COLOR=navy&MAP-STYLE=
boeing investor: “This is why MPTA-098’s argument holds zero credibility on whether the SQ A380 makes more money than 77W on SIN-LHR flights.”
This is a classic straw man fallacy. I’ve never said that in the current economic environment, the A380 makes more money than the 77W for SQ on the LHR route. What I’ve indicated is that since traffic in cattle class seems to be holding, I can’t see why the 77W should be doing better than the A388 considering (i) the lower CASM — ably explained by ikkeman — and (ii) that the 77W is currently producing little, or no additional revenue on the lower cargo decks.
MPTA sez: “This is a classic straw man fallacy. I’ve never said that in the current economic environment, the A380 makes more money than the 77W for SQ on the LHR route. What I’ve indicated is that since traffic in cattle class seems to be holding, I can’t see why the 77W should be doing better than the A388 considering (i) the lower CASM — ably explained by ikkeman — and (ii) that the 77W is currently producing little, or no additional revenue on the lower cargo decks.”
Your argument sounds like “they’re just as bad as we are, ergo, we’re better.”
Sorry. I’m having a WTF moment over this.
80. Dougloid | May 29th, 2009 at 15:06
I did state in the same post as you reference:
” Of course this assumes the demand exceeds the 777 supplied ASM by some 25%.”
Yes, when you fill the 777 and 380 with the same number of people, the 777 will make more money. But when the extra luxury/space/comfort (in the 380, just cause it’s newer, not cause it’s Ab) allows you to steal additional traffic from your competitors, and you fill the 777 and 380 with the same load factor, the 380 will win.
Let me make one thing clear: I strongly doubt that the 380 will be a financial winner for the bus company. I don’t believe it’s an economists darling – but it is beautiful to behold, a superb engineering marvel and simply to expensive to stop.
82. Dougloid | May 29th, 2009 at 20:01
The reverse is true to…
81. MPTA-098 | May 29th, 2009 at 18:39 says,c “On the contrary, the bean counters at the blue chip Asian/Australasian airlines (and their European competitors) want to maximise profit and i.e. will consequently maximise CASM and fly one A388 ( later on the A389) instead of managing two departures within an hour in the late evening on smaller aircraft such as 77Ws and/or A35Xs; at a time of the day when “frequencies” truly are irrelevant!”
Nope. Those bean counters will find out soon that a packed A350-1000XWB is much more profitable than the A380.
Let’s wait and see. In only four years we will have the answer. If A380 orders takes off, to 350 orders in 2013, I would be willing to admit I am wrong. No problem.