Progress Update

[Borescope]

"Since when is the 747-400 more economical to run than the 777?"

"It was my understanding the 747's are hugh gas guzzlers."

Fuel and cost of ownership (ie, lease costs) seem to both hover between 10 and 15% of operating costs, so if your "ownership cost" of a basically new 400 gets cut in half, then the it can burn more fuel and be the efficient solution. the 400 only "guzzles gas" down low (high speed wing)

Just goes to show you anyone can put a spin on. My understanding was that UA tried to negoiate lower the lease payments on the 777 and the lessors balked because they know they can place those aircraft with other operators. So, UA will turn in some of the 777's and they will replace those routes with the more expensive 747.

 

[Busdrvr]

Just goes to show you anyone can put a spin on. My understanding was that UA tried to negoiate lower the lease payments on the 777 and the lessors balked because they know they can place those aircraft with other operators. So, UA will turn in some of the 777's and they will replace those routes with the more expensive 747.

More "expensive" 747-400? Hardly, and that's the point. we just sold a five yo example for under 60 million. this is a jet that retails around 200 million. Corespondingly, our lease costs went WAY down for the jet. (These are arbitrary numbers, but here's the point). Lets say you were paying 100K a month to lease a 777, and the 100k per month on fuel to serve a certain route, and pre-911 the cost would have been 150k lease, 150k fuel for a 400. Now the 400 is 50k for lease and still 150k for fuel, you now have direct operating cost on the 400 that make it at least competative (given larger capacity for people and cargo). as for UAL's 777's, we designed the jet and got the first 50 or so copies. Our 777's are NOT the good ones. the -300's with the GE's at least appears to be a much more capable jet. I wouldn't count on many going back (nobody wants them), and the 400 may be a tool to hammer down the leases.

 

[Borescope]

I seriously doubt the 400, even after an adjustment in lease rates will be more cost effect than the 777. You are assuming that the aircraft will be full all the time. It may carry more, but unless it has the payload it's not going to be more cost effective. If it is more cost effective, then why is NWA the only other US airline to fly them. Surely Delta, Continental and American would jump on them for their long routes if they were that much more cost effective. Bottom line is no one else wants these airplanes and were stuck with them.

 

[Busdrvr]

Actually, we aren't "stuck" with them. we could heave given each and every one of the leased ones back. The reason other US companies don't fly them is that UAL and NWA dominate the pacific, and the Atlantic routes seem to be flown by "too many" carriers, reducing loads. I'm sure there are a couple routes that would justify the 400 for DAL, CAL, and AMR, however, they don't have enough of those routes to justify a whole differant fleet. The 400's economics are borne out when you watch the ramp in FRA. The US is just about the only country that doesn't load the place up with them. We'll just have to agree to disagree on this one. Myself, i prefer the coach product in the 777.

 

[atabuy]

Surely Delta, Continental and American would jump on them for their long routes if they were that much more cost effective. Bottom line is no one else wants these airplanes and were stuck with them.

I seem to remember when AA had the 47.
The pilots were in contract talks and would not give in to certain wages and rules about the 47 if I remember correctly. So Crandall agreed to the contract and sold the 47's right after they settled the contract.
Anyone remember this? Or is it just a figment of my imagination?

Crandall was a good negotiator. It was hard to beat him at it. Very inovative.

 

[Fly]

How many other airlines fly 15 hour flights? I primarily fly Asia, and the 47 is almost ALWAYS full......5 to 10 open seats per flight usually. I figure that is why we fly them, probably wouldn't be too profitable on the shorter 10 hour flights.

 

[767jetz]

I seriously doubt the 400, even after an adjustment in lease rates will be more cost effect than the 777.


Bottom line is no one else wants these airplanes and were stuck with them.

Actually, We got an increadible lease rate on the 400. Our 400's and engine combination are used by only 1 (possibly 2) other airlines. Our cost is only a fraction of what they were. Add to that labor concessions, and the the fact that it carries more cargo (forget about the seats), and they instantly became more cost effective than the 777.

Just to gauge the significance of the lease savings, UA's target was to save around $500 - $600 Million per year in lease costs. We are currently already up to around $900 Million in saving, and there are still some leases to renegotiate.

We are definitely not stuck with them. We are the largest US operator of the airplane, and the engines are common with our 767-300 fleet. This is a big savings in maintenance and parts inventory. The 400 would simply not make sense at Delta or American.

 

[The Ronin]

I seem to remember when AA had the 47.
The pilots were in contract talks and would not give in to certain wages and rules about the 47 if I remember correctly. So Crandall agreed to the contract and sold the 47's right after they settled the contract.
Anyone remember this? Or is it just a figment of my imagination?

Crandall was a good negotiator. It was hard to beat him at it. Very inovative.

AA had 2 747's at one time. UA picked them up around the time we expanded into Asia with PanAm's routes. They were the only 747-123's we had and I don't know if AA ever flew RPM's with them. They were distinguished by the 3 upper deck windows.

 

[The Ronin]

Actually, We got an increadible lease rate on the 400. Our 400's and engine combination are used by only 1 (possibly 2) other airlines. Our cost is only a fraction of what they were. Add to that labor concessions, and the the fact that it carries more cargo (forget about the seats), and they instantly became more cost effective than the 777.

I don't know if I'd go that far and say a -400 is more cost effective than a 777 even with renegotiated leases. I do believe that the -400 still has a place in the US-Asian market. As with any plane, if the seats and belly are full you are getting the most out of the aircraft utilization, but more importantly, are the yields on passenger and freight miles offsetting your operating costs per mile for the airframe, crew and fuel. I think the 777 will have a better operating cost structure per mile for a wide body aircraft in every market except Asia/Australia, where perhaps the -400 might compete.

 

[solancoforever]

Hi everyone:

I am a newbie and need some help. I was reading what you all had to say and I hope you can help me.

I am flying (for the first time in my very old life) to London from Dulles. My daughter and I are on United flight 924 going and United flight 919 coming back. Can you tell me anything about the planes themselves and offer any helpful hints? My daughter is treating me because I am ill so have to walk with a cane so we are going economy.

You guys are so knowledgable I would really appreciate any help you can offer to a clueless sole!

Thanks!

 

[ual06]

solancoforever,

You will be flying on one of UAL's many "Long Range" aircraft. Due to many factors, it is impossible to say which type it will be. I feel you may be assured that all UAL personnel you and your daughter encounter on your trip will be amongst the finest and most safety conscious in the aviation industry.

Thanks for choosing UAL.

I would make one suggestion. Sometime during the afternoon of your first day there, pick up something for a midnight snack.

 

[solancoforever]

Thanks UAL06--I'll make sure to take your advice and pick up something!

 

[Borescope]

Yea, Those peanuts that your going to get from us just don't quite fill you up on that 9 hr flight.