Once Emirates has its 90 A380s (total # ordered), it can become the official Mecca shuttle.
Another US red flag?
- Thread starter Mrs. McFly
- Start date
Once Emirates has its 90 A380s (total # ordered), it can become the official Mecca shuttle.
xUT
Veteran
Flying during Hajj, they will save a lot on toilet paper and eating utensils. Cleaning the lavs might be a loss leader...
Might make it up in a goat section in cargo hold.
Could add a 'chickens fly free' policy...
JMHO
xUT
Veteran
xUT
Veteran
1st place isn't much better. UA fought to be the global airline of choice and make it number one.
How did that work out?
B) xUT
WorldTraveler
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For years, DL was supposedly interested in the 773 just like AA is now buying. I am not sure what they are after now but there are still 16 747s which are going to need to be replaced starting in five years max and the few 787 orders DL has won't come close to replacing the 60 763s, for which the first replacements need to start coming in the next 3-5 years as well unless DL keeps them well past 30 years or faces a major replacement cycle.
There has also been talk of a 330NEO similar not unlike what Airbus is doing with the 320. Given DL's bent for less-than-latest technology, I wouldn't rule that out. The 333 is already one of the lowest cost widebodies in DL's fleet and Airbus would sell them at cost to put widebodies at DL - or AA for that matter. The 332 as a NEO could potentially be a viable low cost replacement for the 763ERs.
The main point is that AA, DL, and UA are going to diverge with their fleet plans probably more than they ever have in the past - and it will be very interesting to see the impact of all that over the next few years.
xUT
Veteran
Thanks for the laugh.
UA/CO, NW/DL, AA/??, will continue to do the same damn thing they have done for years.
Blame SWA for their inability to be as nimble as they are.
Maybe some should divest in hotels and travel opportunities (like they do now and failed in the past).
B)xUT
Kev3188
Veteran
Why not? We already have 30+ (counting subfleets)... B)
WorldTraveler
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except there is a clear difference in the way each of the network carriers compete..... and the results are quite obvious in their respective networks, particularly with respect market shares of competitors in former hubs/strength markets.
which probably means that DL could add any aircraft in production and find pretty close commonality with something it already flies.....
and then they could turn around and sell MRO services for that fleet type too.
The whole notion of fleet commonality and the supposed savings from a simplified fleet is obviously not universally accepted.
to your point, have a look at DL's fleet page on Delta.com.. the list of 757s goes on and on....
BTW, I guess the word is out that DL is adding lie flat seats to the intercontinental/transcon 757 fleet but will put 763s with lie flats in the market as soon as next spring just as AA's 321s hit the market and AA's 762s leave.
777 / 767 / 757 Love
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- Jan 26, 2012
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While I agree with what WT says, I can't argue with most of your points, as you could be correct. The only thing I will say is AA appears to be revising and pretty much revamping her whole fleet and trying to get back to distinguishing themselves as a service airline to grab higher value customers. With that being said no one REALLY knows what the other guys will do.....
The one thing I will disagree on is the SWA / nimble comment. Not sure what you do for the airlines, or if you are a customer, but I assumed every knew that the cost of having parts for multiple aircraft at multiple points in your system can be VERY expensive. I guess not everyone realizes how expensive it is to hold inventory and to have the capabilities to fix MULTIPLE aircraft, not to mention train flight crews for MULTIPLE aircraft type-rating, rather than just one as proven by SWA obsession with having a single type-rating 737 ( a decision Boeing regrets to this day). How nice was it for AA to have the 757/767? Cause the flight crews were interchangeable. Bottom line, if your entire fleet is one type rating, you can grab any crew for any flight.....nice, right?
So yes, SWA is more nimble, but that is her business model, and just like the "majors" business model has some downsides (less "nimble") so does SWA (she can't grab international revenue traffic like the majors).
Cheers,
777 / 767 / 757
WorldTraveler
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Once again, the whole notion of fleet simplicity doesn't necessarily translate into the cost savings that alot of people here think it does. AA, DL, and UA all have large 767 and 757 fleets which share common cockpit ratings which reduces cockpit training costs and increases operational flexibility. Given that alot of carriers send maintenance out and engines are very long life machines, the benefit from commonality comes from the companies who overhaul the engines, not the airlines that fly them. Even among airframes, there are alot of common parts between otherwise different fleets, including DL's DC9/M80/M90/717 fleet. And even though DL's 330s, for example, are very different airframes than the 767s, there is a lot of commonality between engines - which DL does maintain on large portions of its widebody fleet.
AA is indeed spending a whole lot on fleet renovation - some of which is way overdue and has resulted in higher costs than for other airlines.
But every airline is spending at least some money on fleet renewal; the obvious question is how much is necessary and how much only adds more costs w/o providing a real advantage. Not only are other airlines spending less money overall on fleet renewal - even though some of them are larger than AA - but they are also not necessarily going to be stuck w/ old technology aircraft - and thus, AA's cost advantage is not near as great as you might think that 550 new airplanes would otherwise provide.
And then there is that refinery that has the potential to reduce it's owners fleetwide fuel costs as much as 5% compared to its competitors..... you can justify keeping alot of older aircraft if your fuel costs are as much as 5% lower than your peers.
Many people completely fail to appreciate how expensive it is to borrow money for fleet replacement- even at the historically low interest rates we enjoy today.
An additional $10B in leases or debt for new aircraft even at the best discounts for those aircraft can easily add $500M or more to debt service for a company.... given that AA's order book is worth $25B or more, far more than any other airline both in absolute numbers and the percent of debt relative to revenue or other statistics, AA will remain highly leveraged. There is ample evidence from airline history of how difficult it can be for heavily indebted airlines to make money at the same rate as others.
It is notable that WN's fleet is not necessarily terribly young right now and they have managed to survive quite well... again for several years on the basis of lower fuel costs than their peers. AA and DL have had very similar fuel efficiency rates among their fleets for years yet there is a clear difference in the finances between the two.
WN is remaking itself as it becomes a true nationwide carrier, adds longer haul flying outside of the continental US, and competes in big business markets where network carriers are strong instead of just at airports where WN has been able to carve out a pretty significant operation ALONG SIDE the network/legacy carriers.
WN will adapt but they are not going to be the same threat to the legacy carriers as a whole that they were for years.
The industry is nearing the final point of restructuring where carriers will either be positioned to keep w/ the much smaller remaining pool of carriers or else they will not.
From a structural standpoint, it isn't really clear that any more consolidation among network carriers will dramatically alter the outcome.
AA is indeed spending a whole lot on fleet renovation - some of which is way overdue and has resulted in higher costs than for other airlines.
But every airline is spending at least some money on fleet renewal; the obvious question is how much is necessary and how much only adds more costs w/o providing a real advantage. Not only are other airlines spending less money overall on fleet renewal - even though some of them are larger than AA - but they are also not necessarily going to be stuck w/ old technology aircraft - and thus, AA's cost advantage is not near as great as you might think that 550 new airplanes would otherwise provide.
And then there is that refinery that has the potential to reduce it's owners fleetwide fuel costs as much as 5% compared to its competitors..... you can justify keeping alot of older aircraft if your fuel costs are as much as 5% lower than your peers.
Many people completely fail to appreciate how expensive it is to borrow money for fleet replacement- even at the historically low interest rates we enjoy today.
An additional $10B in leases or debt for new aircraft even at the best discounts for those aircraft can easily add $500M or more to debt service for a company.... given that AA's order book is worth $25B or more, far more than any other airline both in absolute numbers and the percent of debt relative to revenue or other statistics, AA will remain highly leveraged. There is ample evidence from airline history of how difficult it can be for heavily indebted airlines to make money at the same rate as others.
It is notable that WN's fleet is not necessarily terribly young right now and they have managed to survive quite well... again for several years on the basis of lower fuel costs than their peers. AA and DL have had very similar fuel efficiency rates among their fleets for years yet there is a clear difference in the finances between the two.
WN is remaking itself as it becomes a true nationwide carrier, adds longer haul flying outside of the continental US, and competes in big business markets where network carriers are strong instead of just at airports where WN has been able to carve out a pretty significant operation ALONG SIDE the network/legacy carriers.
WN will adapt but they are not going to be the same threat to the legacy carriers as a whole that they were for years.
The industry is nearing the final point of restructuring where carriers will either be positioned to keep w/ the much smaller remaining pool of carriers or else they will not.
From a structural standpoint, it isn't really clear that any more consolidation among network carriers will dramatically alter the outcome.
- Banned
- #86
You speak of things you have no idea about.
Having multiple fleet types and subtypes cost money in parts inventory and training, same fleet types require not stocking of different parts, parts are a huge expense in the airline industry, that was my specialty.
You really dont understand the hundreds of millions of dollars of parts required to be kept on hand to keep the fleet flying.
Having multiple fleet types and subtypes cost money in parts inventory and training, same fleet types require not stocking of different parts, parts are a huge expense in the airline industry, that was my specialty.
You really dont understand the hundreds of millions of dollars of parts required to be kept on hand to keep the fleet flying.
WorldTraveler
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I didn't say there was no cost to diverse fleets... but you don't grasp the concept that it costs money to borrow money... and it doesn't matter if it is via an EETC or a lease sale back or an outright ownership.
Unless you own an asset free and clear, there is some sort of liability on your books... and those liabilities add up no matter how you slice them.
Look at the fuel efficiency chart here and tell me where the correlation is between fuel efficiency OR fleet simplification and profitability.
http://online.wsj.co...1677748380.html
There is NO correlation because while those factors are real, there are far more factors that are far more significant.
If you don't grasp that an additional $20B in debt added to a balance sheet adds a couple billion dollars in extra finance costs per year that other airlines won't have, then the entire conversation is over your head to be very blunt.
Furthermore, AA is not getting rid of its existing fleet all at one time... they will STILL have M80s flying while they are adding Airbus aircraft on top of new generation Boeing aircraft and engines. AA's fleet is about ready to get MUCH more complex.
Only years after its merger is US getting rid of some some of its excess fleet types. If it had made sense to park some of those duplicate fleet types, it would have been done sooner.
You also fail to acknowledge that an MRO business significantly contributes to offsetting the cost of carrying parts - but then you don't want to admit the value of being an airline AND an MRO because there is really only one US airline that is successfully doing both at the same time.
Unless you own an asset free and clear, there is some sort of liability on your books... and those liabilities add up no matter how you slice them.
Look at the fuel efficiency chart here and tell me where the correlation is between fuel efficiency OR fleet simplification and profitability.
http://online.wsj.co...1677748380.html
There is NO correlation because while those factors are real, there are far more factors that are far more significant.
If you don't grasp that an additional $20B in debt added to a balance sheet adds a couple billion dollars in extra finance costs per year that other airlines won't have, then the entire conversation is over your head to be very blunt.
Furthermore, AA is not getting rid of its existing fleet all at one time... they will STILL have M80s flying while they are adding Airbus aircraft on top of new generation Boeing aircraft and engines. AA's fleet is about ready to get MUCH more complex.
Only years after its merger is US getting rid of some some of its excess fleet types. If it had made sense to park some of those duplicate fleet types, it would have been done sooner.
You also fail to acknowledge that an MRO business significantly contributes to offsetting the cost of carrying parts - but then you don't want to admit the value of being an airline AND an MRO because there is really only one US airline that is successfully doing both at the same time.
- Banned
- #89
Buying new planes and interest expense are tax write-offs and the savings that new planes bring with more fuel effiecency and less maintenance costs make up for the added expense.
Why do you think airlines replace older planes with newer ones?
The expense in diverse fleets isnt just the cost of the parts, but the cost of warehousing them and the taxes they have to pay on them each year.
US use to sell a bunch of parts before the end of the year so they wouldnt have to pay the tax on them and then buy them back at the start of the new year.
Airlines dont stock parts primarly for heavy maintenance they stock them for line maintenance to keep the fleet flying.
Heavy checks are planned out way in advance and parts are bought, ordered or overhauled just when the plane comes in for its check, since you never worked heavy maintenance or stores I know you dont know how it works.
And then a plane goes to the MRO, the airline ships all the parts needed to the facility, the MRO doesnt stock the parts for each airline, since you never worked maintenance you dont know how it operates, now do you?
Why do you think airlines replace older planes with newer ones?
The expense in diverse fleets isnt just the cost of the parts, but the cost of warehousing them and the taxes they have to pay on them each year.
US use to sell a bunch of parts before the end of the year so they wouldnt have to pay the tax on them and then buy them back at the start of the new year.
Airlines dont stock parts primarly for heavy maintenance they stock them for line maintenance to keep the fleet flying.
Heavy checks are planned out way in advance and parts are bought, ordered or overhauled just when the plane comes in for its check, since you never worked heavy maintenance or stores I know you dont know how it works.
And then a plane goes to the MRO, the airline ships all the parts needed to the facility, the MRO doesnt stock the parts for each airline, since you never worked maintenance you dont know how it operates, now do you?
Remember many of the aircraft have common parts-like the A320 family, 737NG, 757/767, etc. WT can correct me if I'm wrong but many of the DL subfleets are related to things like seating configuration-they have 9 different 757 configurations (and counting). Some also have different cockpit configurations, engines, and exit row configurations too.
Point is when you have an operation the scale and scope of DL the benefits from placing the most suitable aircraft and configuration on a route outweigh the costs of maintaining different subfleets and parts. I think DL has also shifted flying of some aircraft like the 744s out of MSP and into ATL/JFK or the A319/320 out of MSP and into SLC while the MD-88/MD-90 are being added to MSP.AA does the same thing, MIA does not see any scheduled MD-80 service and hasn't for years. BOS only sees 757s and 738s at the moment, so there are ways to keep costs in line with different aircraft types. I trust that the management at DL has run the numbers-and they speak for themselves-that it is better to maintain a greater variety of aircraft configuration to adequately serve their markets.
Josh
