There has been talk recently of a phase 2 expansion of Chicago’s O’Hare airport and now there are calls for expanding both JFK and Newark airports in the New York City area.

No doubt that the latter two could certainly stand some better planning and a revision of runway strategy.  I would also be wholly unsurprised to find out that others will argue for a new airport serving the area.  Then they will point to White Plains as the next NYC airport again.

I’m all for airports getting revamped and better plans and runways.

But what I would like to see more of is rapid transportation to and from these airports.  A big part of the problem with using many of today’s airports is the inability to get to them in timely manner as well as the parking fees that resemble mob extortion.

Everyone knows the challenges in accessing most of the New York’s airports.  It’s much the same at many other airports around the country including my own home base in DFW.  I can drive 40 miles and pay a minimum of $13/day to park at DFW (anything somewhat close to the terminal is considerably more) and I don’t have much in the way of choice in doing that.

We have a rail system now and it’s actually a pleasant one.  You can get kind of close to DFW via the rail system but you still have to transit from a rail station to the airport via shuttle at the cost of at least 15 minutes more time and often more. 

Why I can’t ride a rail right to the DFW airport terminals and their new rail system is completely beyond me and a sorely neglected option.  It’s coming, they say but it’s about 10 years overdue in my opinion.

And these conditions aren’t much different at other major airports.  We need to do a better job of planning access to these airports in addition to building a new runway here and there.

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For the uber-airline geek, Bader models is making USB flash drives with the tail of your favorite airline.  You can see more HERE.  Among their samples, I’ve noticed iconic airlines such as Eastern and PanAm and I’ve noticed the distinctive tail of an L-1011.  Bader says you can order any aircraft and color you want. 

It doesn’t come cheap though.  The 4GB model is $53 and the jumbo jet version in 32GB is a whopping $120.  But you get to be one of the cool kids on the block with that sticking out of the side of your computer. 

I’m tempted myself.  I wonder if they’ll do a 727 tail with the first generation Braniff logo on it in white?

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I wonder if I am the only one grossly underwhelmed by airline performance in the 4th quarter.  American’s performance is, at this point, embarrasing to the company’s leadership in my opinion and they hold on, in my opinion, only because of an ever thinning smokescreen.   Delta only managed to eke out $19 million and for an airline that had charged through most of 2010 with impressive profits, you have to ask “why” it was so dismal.  Even if you allow for weather disruptions, it still kind of stinks.

ContiUnited (I’ll stop using that moniker one day soon) managed to beat expectations but still posted a significant loss and let’s not forget that both of these airlines were performing exceptionally well prior to the consummation of their merger.   Even Southwest remained guarded abouts its prospects going forward despite a reasonably decent fourth quarter result.

Are rising fuel costs a problem?  Certainly but they aren’t a problem anyone was unaware of.   The same is true of labor productivity.  These are pretty well known variables and if you don’t know how to manage those effectively at this point, it is time to leave the business.

When US Airways manages to stand out among our airlines given the inherent weakenesses they have in the US marketplace, you have to ask who isn’t doing their job, no?  Alaska Airlines even shined and that is an airline who has all the costs one would associate with any of the legacy US airlines. 

It certainly points out that mergers aren’t the solution to everything and capacity management doesn’t necessarily ensure profits.  In fact, I wonder if this excess of restraint isn’t effecting demand in general and driving customers to other options secondarily.   There is a reason why Southwest keeps running up its revenue score. 

At some point, you have to go out there on the playing field and compete.  Competing isn’t just offering the best price, it’s earning that customer for more than one particular flight.  With all that the airlines have implemented to enhance their revenues, are we finally seeing the results of that behaviour towards consumers?  I certainly think its a important part of the equation.

It’s time to put on the pads and get out on the field ready to play rough and compete.

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Boeing’s CEO, James McNerney, reiterated Boeing’s view that re-engining the 737 even in light of Airbus’ A320NEO announcement is not the pathway to success for Boeing.  They continue to believe that if a new 737 replacement is forthcoming in the 2019/2020  timeframe, customers will wait.  I agree.

However, if customers are asked to wait until 2025, I’m not so sure.  There is only so much more additional performance that Boeing can get from either the airframe or the engine on the 737.  Let’s not forget that, in many respects, the current 737 lineup continued to perform well against the A320 in part because of the development of the winglets and the evolving refinement of the CFM engine.  Additional gains are going to be increasingly difficult to find.

Also of concern is McNerney’s announcement that research and development will be going down over the next couple of years and that they intend to cut back on some of their engineering resources which are extraordinarily high (say McNerney) at present while retaining their core capability.   While I understand the cravings for normalcy, this worries me. 

To really get a 737 replacement out in the 2019/2020 timeframe, it’s time to get started now.  You have effectively just 8 years to redesign another technically innovative aircraft that will compete for 20 years or more.  Schedule is more critical in accomplishing this than budget is.  It takes time to design innovative technology and implement it into a product that must be 99% reliable “out of the box”.   Boeing’s schedule for doing so is, in some respects, already eroding.

I think there is more time to consider options for the 777 line than there is for the 737 replacement.  Enough airlines and, in particular, 737 customers have signaled the very strong desire for a better airplane. To act as if you have all the time in the world or even little competition for these people is a bad idea.  Even Southwest acknowledges that they can handle transitioning to a new type and they don’t mean just transitioning to a new Boeing. 

There are 3 SuperLegacy airlines who’ll be shopping in the next 1 to 2 years for fleet replacement and 2 LCC carriers who need to find new efficiency gains in their fleet (Southwest and Ryanair) who could literally place enough orders to pay for the 737 replacement.   Having something that will significantly beat the A320NEO in the stated time frame that also provides for future efficiency and a product line capable of lasting 20 years is almost a necessity rather than something to study for another 2 years.

The 737 replacement won’t be an evolution of the 737.  It will be much more a revolution for single aisle aircraft much as the 787 is for medium capacity, twin aisle aircraft.   Furthermore, I think you would want to have that program on firm footing and about to produce new aircraft as you begin to enter into engaging on a 777 evolution or replacement later in the decade.

So what’s the hold up?

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American Airlines and Sabre have decided to enjoy a truce while negotiating a new contract until this summer.  Is this war between AA and the GDS systems over?  No, not yet. 

I think AA needed some of the heat to die down in the public given their most recent financial results and this was a way of moving one of 3 major problems off to the back burner and getting their revenue stream back online with the largest GDS system.   They can continue to play chicken with Expedia and Orbitz in the meantime and see if they can get any traction at all. 

But it begs the question as to why AA is choosing to fight this right now when it so obviously has a large pile of other problems to solve first.   They are the only legacy/SuperLegacy airline to lose money for 2010 and while they have some promising developments in their favor, they continue to fall further behind other airlines when it comes to earning a profit. 

If you compare the problem of fees with respect to GDS systems vs the problem of labor unrest and productivity, I know which one I would want to get solved first.  I wonder when AA’s board of directors and shareholders begin to be unsatisfied with AA’s financial performance relative to the rest of the industry.

In another development, Virgin America has inked a deal with Sabre to provide reservations systems and to continue its GDS relationship going forward in a multi-year contract.  Several airlines have reaffirmed the GDS model (US Airways as well) and American continues to stand alone in this conflict although I do think Delta is paying close attention. 

One good thing that may come from this is the GDS providers doing a better job of accomodating the a la carte fee structures and upselling.  That would not be a bad thing.  In addition, it may well spur the GDS systems to invest in new technology that not only will accomodate future needs as well as lower fees.  That, too, would not be a bad thing. 

Right now, I would say the GDS systems have a slight upper hand in this fight.

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Mexicana says it has made significant progress with its creditors allowing it to go forward with its debt restructuring and it now planes to start operations in the near future with seven aircraft and eleven routes.  Agreements with labor unions have been reached and Mexicana says it has 39 pilots, 80 flight attendants and 846 maintenance techs ready to go when they re-start.

If that 846 maintenance techs number is correct, I think I know who “won” among the labor unions.

Current plans call for Mexicana to start international routes to Los Angeles, Chicago, San Antonio, and Havana, Cuba and domestic routes to Guadalajara, Monterrey, Cancun, Oaxaca, Tuxtla Gutierrez and Veracruz.  Although Mexico City isn’t named, I presume that these routes will be centered upon Mexico city itself.

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Sounds like a really dull airline, no?

That’s British Airways and Iberia Airlines under their merged company name.  British Airways and Iberia will continue to operate under separate brands while enjoying the synergies of a merged company in the background.

Willie Walsh becomes CEO of the combined company while Antonio Vázquez Romero sits as non-executive Chairman of the group.  Why isn’t Willie the top guy?  Because in this case, the CEO is who gets to run things.  Chairman just gets to run the board of directors.

The new company hit the stock exchanges yesterday with a new fleet of just in excess of 400 aircraft and anticipated annual revenues exceeding $19 Billion.  They’ll sit as the 3rd largest airline in Europe but let’s put things in perspective:  American Airlines has 620+ aircraft and $22 Billion.  However, IAG should earn a profit and AA has yet to show a profit despite most airlines of its size already doing so for 2010.

Look for the new company to start targeting other purchases.  Willie Walsh has already stated their intent to go on a shopping spree for other airlines.  Who is anybody’s guess but an international airline purchase is always difficult given ownership rules that generally exist from one country to another.

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I mentioned in a post a few weeks ago that I had started collecting diecast aircraft.  One commenter asked why no BAC 1-11 aircraft.  Well, here it is:

From 2011 01 22 Fleet Additions

See the rest of the additions HERE.

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Virgin America has had a great experience with its new flights between DFW and Los Angeles as well as San Francisco.  So much so, they’re adding one new frequency on each route by terminating its LAX – Toronto flights. 

This is what I mean by it being time to compete with American Airlines.  That big bully that everyone sees in the DFW area is a lot more vulnerable than it may look at first glance.  AA has fought back some on those routes but with VA’s load factors running in the 80 percents and their advance bookings running about 70 percent, it’s clear that a new, service oriented entrant can compete with AA.  Especially on routes that have been traditionally dominated by AA over the past 10+ years. 

Once VA gets these flights settled and tweaked and finds itself satisfied, look for new flights out of DFW.  I see opportunities for them on DFW to New York city, Boston and Seattle.  All three routes are the non-stop domain of AA and all three have relatively high fares.  Just like the DFW-LAX and DFW-SFO routes had.  Virgin has a presence in each of those cities which would make it easier to integrate routes from DFW to those destinations as well.

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Delta is introducing a program where upon check-in, you can bid to be bumped from certain flights.  The customer will name how much they want in order to be bumped.  The low bidder(s) get bumped for that compensation.  The passenger can opt to change their mind and if there are no bidders, the airline will have to involuntarily bump someone and compensate them accordingly.

I like this idea.  It is economically efficient by prioritizing bumps according to those who have the least to lose as opposed to the most to lose.  It also drives down the cost of bumps which inherently means the airline’s costs are driven down as well.  The current system for seeking volunteers bids upwards instead and passengers know that waiting before volunteering will drive up the offer of compensation.  In fact, frequent fliers know that they can game the system for high compensation that doesn’t necessarily go to whoever paid for the ticket:  their businesses.

If someone is on a leisure trip and they’re willing to be bumped in return for $200 in travel voucher plus a guaranteed booking on the next flight, that means those who really need to get to their destination have a far higher probability of doing so and at the least cost to the airline.  Remember, higher costs = higher air fares.

Yes, if you are in voluntarily bumpbed, you can get far higher compensation in the form of real cash, hotels and positive space on another flight.  However, the idea here is to bump those who have the least to lose, not the most.  It also means less probability of angry passengers as well. 

Other airlines could stand to adopt this system and, frankly, I think it should be deployed so that at a certain overbooking point, airlines solicit these people *before* they arrive at the airport.  And if this works as Delta believes it will, I suspect that will be the next step.

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Vision Airlines is a new entrant into the Florida leisure markets suddenly and I don’t see this going anywhere anytime soon.  Vision is a charter company that owns a number of 737s and a few 767s as well.  The truth is, they do a bit of everything.  Vision runs a tour operation using Dornier aircraft out of Las Vegas.  They do charter flights to Cuba.  They work for the United States government transporting spies for a spy trade.  And now they’ve decided to find a way to use their 737s a bit more and they’re going to operate scheduled services.

These scheduled services are primarily to the Destin, Florida area although there are a few flights into Gulfport/Biloxi.  Their flying routes from places like Macon, GA and Asheville, NC and Shreveport, LA to Destin/Fort Walton Beach Florida.  They do have some flights from Atlanta, Orlando, Tampa, and Miami but not because they have other flights to those cities feeding traffic. 

Frankly, I see this going nowhere in a great hurry.  The smaller destinations aren’t going to originate enough traffic for 737 flights and the larger destinations have, you know, real airlines like Southwest and Airtran serving them. 

In New Mexico, I read THIS interesting story about New Mexico Airlines.  New Mexico Airlines plans to offer service between Clovis, NM and Albuquerque.  Currently, that route is serviced by Great Lakes Airlines using Beechcraft 1900D aircraft twice a day during the week and once a day on the weekend.  A quick look at the Great Lakes Airlines’ website reveals a non-refundable fare of about $89/each way and a refundable fare of about $189/ each way.  This service is subsidized by EAS (Essential Air Service). 

New Mexico Airlines (a division of Hawaii’s Pacific Wings)  intends to come in with an even smaller, unpressurized aircraft and charge $600 round trip between the two cities.  But they’ll offer 1 more frequency each day.  They’ll have to since their Cessna Caravan’s can seat 9 people and the Great Lakes Airlines’ Beechcraft can seat 19.   NMA’s President said:

“There has to be more to your business model than collecting subsidies,” NMA President Gabriel Kimbrell said. “Otherwise, it’s just airline welfare.

“It’s the only sustainable approach.”

And I find that attitude interesting since they themselves were established in New Mexico by EAS contracts.   The truth is, New Mexico is sparsely populated and it will be decades before some cities grow enough to justify unsubsidized service.  While I’m no fan of EAS in general, it would appear that this is working OK in Clovis and at what appears to be an economically efficient price. 

If New Mexico Airlines really thinks it is going to succeed by doubling prices, well, I don’t.  I think they’ll fail miserably.  For anyone wanting to travel beyond Albuquerque, they can drive to Amarillo or Lubbock which are just 100 miles away and fly on Southwest Airlines.  Don’t kid yourself that they won’t.  If Great Lakes Airlines goes away and New Mexico Airlines takes over at those prices, people will simply drive.  It is the only economical thing to do.  If they’re traveling beyond ABQ, they’ll drive to Amarillo or Lubbock and fly from there.  If they’re going to ABQ, they’ll drive the 220 mile trip. 

Then New Mexico Airlines will fail and Great Lakes Airlines will come back under the EAS program.

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Lately, it seems like QANTAS has all kinds of engine failures all over its fleet.  Is it because they’re not maintaining them?  I seriously doubt that.  You have to consider how QANTAS uses its 747 and A380 fleets. 

QANTAS is somewhat unique in that many of the routes it flies are not just exceptionally long but also exceptionally full.  This means the aircraft are being operated at their maximum performance far more often than virtually any other airline is required to do.  These aircraft are fully loaded with people and fuel and then must use maximum take-off performance in order to loft themselves into the sky for flights that have durations inexcess of 14 hours. 

That puts a lot of wear on engines that other airlines just don’t suffer.

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Since Southwest Airlines announced its re-vamped Rapid Rewards program, it has taken a lot of flack both from long time program members as well as in the press.  Undeservedly so, in my opinion. 

Southwest needed to do something badly with that program and orient it towards the customer of tomorrow as opposed to the customer of the early 1990s.  These changes do that and while, yes, some people who have been reaping the rewards (pun intended) from short haul flights will do a bit worse, customers who will drive their business going forward will do a bit better. 

It’s all about rewarding those who spend more and travel more.  It’s scaled to mostly reward the people who are driving profits the most and that is what a rewards programs should do. 

I do hope that Southwest holds its course on this program and resists the temptation to change or revise their new plan.  Doing this now corrects a strong imbalance that has existed for some time and ensures that Southwest is competing nationally when it comes to this kind of program.  People will settle down in time and members will buy into the changes but it will take time as no one likes change.

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American Airlines announced an order for (2) 777-300ER aircraft during their earnings call today and I don’t think anybody saw that coming.  It’s a notable order for several reasons.  First, it’s the first order by a US airline for that aircraft.  Second, it’s the first airliner for AA to add that is for growth rather than replacement.  Third, it’s a new engine type for AA since the -300ER uses GE90 engines instead of the Rolls Royce Trent engines that AA has on its -200ER aircraft.   Finally, AA plans to receive these in 2012 and that’s pretty quick. 

Although these aircraft come with slightly better range than the -200ER, I think these are about capacity growth on some particular long(ish) routes.  These could be for any of 4 basic areas:  DFW or Chicago to London (I doubt this), DFW or Chicago to India (maybe), DFW or Chicago to Japan or China and, finally, NYC or Miami to South America (I doubt this.  My bet is on flights to India, Japan or China with India or Japan being a higher probability.  Time will tell.

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Virgin America has announced its intentions to order 60 new Airbus A320 aircraft with 30 being the A320NEO (New Engine Option) with deliveries taking place until 2019.  That means Virgin America will triple the size of its fleet (or more) over the next 8 years. 

While VA already signaled that they planned to buy 40 new aircraft, an additional 20 reflects a certain confidence that it is going to be earning solid profits going forward.  I’m sure that some of the new aircraft (probably the last ones) will replace some original aircraft in this scheme but it reflects a plan for heavy growth between now and the end of the decade.

Let’s put that growth in perspective.  jetBlue has about 160 aircraft presently serving 63 destinations after being in business for about 11 years.  In that fleet, there are about 115 A320 aircraft (with no orders on the books) and 45 Embraer E-190 aircraft (with an additional 60 aircraft).  I use jetBlue as an example because they are somewhat similar airlines with similar service products. 

So, Virgin America thinks it can grow its mainline fleet to about the same size as jetBlue over about the same period of time.   However, jetBlue got to its size in part by using the E-190s to “feed” traffic into their system from smaller destinations.  This would seem to imply that VA will have to think about a similar strategy. 

I suspect VA will start looking at how to build its network around its focus regions.  There is some opportunity on the West Coast but I think they’ll have to look to feed their system in other places as well.  Places such as DFW, Chicago and on the East Coast into New York City and Washington D.C.

Why order now?  Well, Virgin America is solidly in the Airbus camp and now they know what Airbus will be doing with its product line for the next 10 to 15 years.  With that knowledge in hand, it was an opportune time to make that order since Airbus will be very interested in getting airlines onboard with their decision to re-engine the A320 series.  In other words, they probably got a good deal. 

Why the A320NEO?  That goes to efficiency.  Again, VA knows what Airbus’ strategy will be for the next decade and a half and that means they know what kind of efficiency will be offered.  It only makes sense to get the most fuel efficient aircraft possible when competing here in the United States.  Even those that aren’t NEO aircraft will give VA an advantage in that they’ll be new engines with the latest upgrades available and that translates into money saved against the competition.

And they get one more advantage:  They’re at the head of the line when it comes to other potential buyers in the United States such as Delta or United airlines.   Virgin will be receiving the best, most efficient aircraft available as soon as or even sooner than most of its competition.  American Airlines has no new plans for aircraft other than to keep taking on 737-800s at present.  So on VA’s transcontinental flights, it will likely have the most fuel efficient aircraft available and having that advantage in that competitive marketplace means a greater chance of profitability and competitive advantage when it comes to fares.

Virgin has 2 or 3 years to go when it comes to considering how to feed its network with smaller aircraft.  I wouldn’t look for an order in that area for some time to come.  However, when they do start looking, I suspect the Bombardier CS series will be strong contenders for that airline if VA selects the new Pratt & Whitney GTF engines since Bombardier is offering a similiar engine on that aircraft product line.

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Remember THIS post from just a few days ago?

Well, Mexico’s low cost carrier, Interjet, has just ordered 15 of the long range Superjet 100 with options for 5 more.  This really is a big deal for Superjet as I believe this is their first Western Hemisphere order.

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Watching Mexicana’s meltdown last summer was painful for any airline watcher and, at the same time, one more example of just how much the business has changed and just how much labor groups among airlines aren’t seeing the paradigm shift in the business.

Now a new group is trying to re-launch Mexicana and this seems pretty unwise to me.  In the short time Mexicana has been gone, the void it left has been filled by both domestic players (Aeromexico, Volaris, Viva Aerobus and Interjet) as well as foreign carriers from the United States. 

If anything, it shows that there was an excess of capacity in the marketplace and there may even still be a bit of that today.  Mexico’s domestic market decreased by just 1% year over year measured last October and that is with a world recession still very much in place. 

No, it’s best that that airline stay away.  The last thing Mexico’s domestic market needs is a revived Mexicana under any terms.  It’s sad to see them leave but it’s best for the airline industry there. 

If anything, it’s emblematic of what we have not done in this country:  namely allow a legacy carrier to fail.  It wouldn’t have collapsed our air system and it wouldn’t have even resulted in massively higher air fares or a massive disruption in travel.  It would have been destructive to the labor working at that airline but I honestly believe that would have recovered much better in the long run too.

It’s been a long time since we allowed a trunk airline to fail permanently and, yet, I think it would have been better than the consolidation we’ve permitted that has resulted in SuperLegacy airlines that are carving larger chunks of the US off for themselves. 

The best thing that could happen for Mexico’s aviation industry is a reinvestment in its infrastructure and encouraging its newer players to avoid the mistakes made with both Mexicana and Aeromexico.

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I think just about everyone was at least a little surprised at the announcement of the QANTAS flight between DFW and Brisbane, Australia.   It was a subject that would pop up on the radar now and then but generally dismissed with skepticism of it ever happening.  Particularly with the equipment that QANTAS had for making the flight, namely the 747-400ER.

Flights between the United States and Australia have been the domain of west coast cities such as Los Angeles and San Francisco and the primary equipment has been the 747-400.  The aircraft available to make such a flight has already changed and is due to change a bit more in the future.  The 747 got used more because of its range and ability to haul a passenger load with a strong load of cargo.  Generally, long flights like that work best if there is enough demand for a 747 because seat costs go down.

Now the 777-300 is plying trans-Atlantic routes between the US and Australia and soon will be on routes between the US and New Zealand.  It’s a good aircraft for the trip because of the 777’s ability to fly it non-stop, carry a load of cargo and a fairly large complement of passengers.  We’ll see these West Coast to Down Under flights fracture a bit more in the future when the 787-8/9 come online with airlines.

So why the 747 and DFW?  Well, it’s notable that SFO is losing its flight with QANTAS but that makes sense now.  San Francisco is the domain of United, not American Airlines and QANTAS is partners with AA via Oneworld.  Los Angeles remains and it should remain as a Western US departure point between for Oneworld. 

Until now, Oneworld has had to feed all its traffic from all over the United States to either Los Angeles or San Francisco and while LA is a Oneworld focus city, all other Oneworld focus cities are east of the Rocky Mountains.  They are Dallas/Fort Worth, Chicago, New York and Miami.   In that group, there was only one city that made sense with the aircraft available today:  DFW.

The other thing that has changed is the new anti-trust immune cooperative agreements that are forming in Oneworld.  First there is the trans-Atlantic Oneworld partnerships and second is the trans-Pacific(Japan) Oneworld partnership.  Next is logically AA/QANTAS. 

With DFW and Los Angeles as that “hub”, Oneworld can feed traffic to DFW from points east of the Rocky Mountains and from points in Mexico, Central America and South America all to DFW.  Yes, AA can feed that 747 nicely.  And if they do it well enough, you can bet on seeing an Airbus A380 being switched into that route. 

DFW gets a nice boost from all of this as well.  It’s already started to transition back into a more “international” airport than it has bee in some time.  British Airways is now using a 747 on one of its flights to DFW and AA is using more 777s for its flights to Europe.  It will continue to grow as a Oneworld “hub” both because of its good location (not nearly as affected by weather as other potential hubs) as well as the availability of room to grow. 

I would be completely unsurprised at the addition of another direct route to Tokyo and a direct flight to China in the near future.   Currently AA has 2 flights to Japan via 777s and I think we may see one more or, alternatively, we may see JAL start flying one of those flights with its own 777.  AA has wanted to fly direct to China from DFW (and it should) but has so far been blocked by its pilots over duty time rules that AA wanted a variance for from the union.  The flight they wanted to do ultimately went to Chicago instead.  Expect AA to make another run at such a route.

One thing I don’t think we’ll see is a lot of additional routes from Los Angeles to Oneworld destinations.  It’s a crowded airport with limited room to grow.  Delta/Sky Team has a strong base in Seattle and United/Star Alliance has got strength in San Francisco.   Dallas / Fort Worth offers the growth opportunities now with the ability to fly longer range flights using the 787 and 777 and I think we’ll see more and more long haul flights from DFW.

I have to say that I’m very pleased for DFW and I see this as a very good development for American Airlines as well.  It’s nice to see opportunities created like this within Oneworld and on AA’s part, too.

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It has been reported loudly that Delta is poised to issue an RFP (request for proposal) for as many as 200 jets and this is an order no manufacturer wants to lose.   The rumour comes just days after a record breaking Airbus order from IndiGo of India.

At this point, it’s still rumour but this one strikes me as pretty much dead on.   Delta has a huge fleet (720 aircraft with about 40 orders in place which include the deferred NWA order for the 787) and quite a few of those aircraft need to be replaced now or in the immediate future. 

Delta has the Northwest fleet comprised of the very old DC-9-5o, MD-88, MD-90, 757, 747 and some older Airbus equipment.  The Boeing fleet from Delta’s legacy side isn’t quite as old but there are some 757s and 767s in need of replacement as well.  Considering the widely varying fleet, it would come as no surprise that an replacement order is due.

Oil prices and future fuel prices will also drive the need for this order sooner than later if Delta’s goal of a consistent operating profit is to be realized. 

Pundits think this is Boeing’s to lose and I disagree.  Richard Anderson, CEO of Delta, has much more history with Northwest and he is no Airbus hater.  This will be an extremely heated competition and I will say that if Boeing were to lose this order or a significant portion of it, that will sting Boeing and its product line for years to come.

The prime driver for selection is going to be based on a number of items.  First and foremost, trip costs for aircraft to serve a particular grouping of routes.  We’ll see orders for single aisle aircraft to serve what I would call non-transcontinental routes.  In today’s world, that would be the Airbus A319 and Boeing 737-700.   Having trans-continental capability in the aircraft would be a plus but these aircraft are going to serve the focus cities of the airline with routes stretching out from the cities but not across the country.   The mission that the MD-88s, MD-90s, Airbus A319s and Boeing 737-700/800s are serving today.

The A319s are brand new and so are the Boeing 737-700s/800s.  This is going to be about replacing the McDonnell Douglas fleet.

Then there is a need for the larger trans-continental capable aircraft that remain single aisle serving longer trunk routes that won’t justify a widebody.  Currently, the Airbus A320 and Boeing 757 are serving those routes.  The A320’s arrived in early 1990’s and the 757s date from the early 1980s to the late 1980s.  The options for replacement here are the Airbus A320/321 and the Boeing 737-800 and 737-900ER.    Neither aircraft actually “replaces” a 757 which has great range and great payload.  I don’t think the A320s are going anywhere yet so this will probably involve a 757 replacement and they (Delta) may or may not want it to harmonize with their existing A320s.

Then there are the 767s.  Some are getting old and some are quite new still.  Delta needs an aircraft stretching between what a 757-300 offers and an A330-300 offers.  The 787 fits this and the fact that Delta has deferred its legacy NWA order for these makes me think that these aircraft won’t be candidates for replacement.

The 747s are pretty old and frankly I don’t think these we very well cared for either.  They need to be replaced and I do think we’ll see orders to do this on these aircraft.  None really serve routes that demand 4 engines so I think we’ll see a replacement oriented around 2 engines.

I think it’s anyone’s guess on the single aisle orders.  Airbus will fight like crazy to win this order with their A320NEO options and Boeing may well have to announce a 737 replacement at a great price to win it back.   Boeing should actually have great incentive to get going on the 737 replacement if Delta is truly interested.  With Delta, Southwest and, potentially, Ryanair all wanting a better 737, there is an exceptionally strong business case to get going on this.

If Boeing doesn’t offer a better 737 in this, I think the order goes to Airbus.

As for the 757/767 replacements . . . well, I’d give the edge to Boeing.  I think the 787 *is* a good answer for these aircraft.  They offer the right amount of extra capacity for growth, long haul capability, extremely high efficiency and flexibility.  I do think it possible that an order might be mixed between the A330 and 787 unless Boeing gets off its duff and gets that 787-9 into production.  The 787-9 is the A330 killer.

Since I don’t think the A330s are going anywhere, I don’t see much opp0rtunity for Airbus’ A350 in this mix.  It’s deliveries are too far off and the A330s just don’t need to be replaced for a long time.

I think Delta’s large widebody strategy is likely going to be a mix of 777-200s and the 777-300ER to replace the 747s.  They already have a fleet of 777-200LR with GE engines so I think they’ll order 777-300ERs with GE engines to replace those 747s.  It will do everything the 747 will do only more efficiently.  I do *not* think the 747-8i will enter into this order.  Delta doesn’t need the capacity and the 777-300ER will serve all the routes the 747 is currently serving with no problem.  The A350-1000 is far too far off and its ability to perform is simply way too unknown for this to be serious contender at Delta.

I do not think that Bombardier or Embraer will enter into this order at all.  They just don’t have a product that meets the needs of an airline like Delta very well at all.

Don’t expect an order announcement for about a year.  Delta will let the manufacturers fight it out with best and final offers for quite some time and it will take time itself to do a detailed analysis.   But I can’t wait to hear their decision.

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I have wondered for some time now why the Sukhoi Superjet 100 hasn’t gotten more attention both in the media as well as from western airlines.  This really isn’t your father’s Soviet airliner.  It isn’t your father’s regional jet either.  This is a regional jet that has gone through design and development and through test with some delays but without too much drama and it’s soon going to fly with an airline.  Aeroflot gets to be the first.

Maybe there is stigma from being a Russian design and maybe there is stigma from being an airliner going into service with a Russian airline first.  There shouldn’t be.  Aeroflot wants just as much efficiency as any other airline in the world. 

At first glance, this airliner might be a touch small for the markets it is entering.  I’m not sure that’s the case.  So far, the Superjet is on target to be about 6% more efficient than the equivalent Embraer and that is no small achievement given that the Embraer E170/190 airliner is pretty new itself.  The Sukhoi actually hits a bit of a sweet spot for US airlines in that it can serve as a regional jet (not a regional jet doing mainline long thin routes) and do it with competitive efficiency. 

One area that this program has suffered problems is in the engine.  The PowerJet SaM146 is a partnership between SNECMA and Saturn NPO.  Most of the engine comes from SNECMA who has ample experience in building a well designed engine.  However, production problems at the Saturn NPO plant have slowed deliveries.  This is not anything that hasn’t been experienced by virtually all engine programs.  The real measure is in whether or not they get the problems ironed out and start producing engines that are satisfactorily reliable and in sufficient quantities to meet production demand.

At the least, I think airlines should be taking a strong look at this aircraft.  There are a few detractions or unknowns with this airliner.  If you’re going to bring an airline type into your fleet, its efficiency is certain a big factor and so is size but there are other components not talked about enough.  An airline wants to know that the manufacturer can support the aircraft with maintenance and parts and it wants to know that it can do it where the airline is using that aircraft.  I haven’t been able to find out much about what Sukhoi and its partners are willing to provide in this area but it certainly shouldn’t be too difficult to meet those needs on the European continent initially.  With Boeing as a consultant on this project, I wonder if Boeing couldn’t be engaged to support the aircraft in the western hemisphere.

Another component is reliability.  So far, we know this jet has done pretty well in testing and it was designed to meet all western standards for certification.  That does mean both Europe and the United States.  But how that aircraft actually performs when in use by an airline day in and day out is still unknown.  If it turns out to have a poor dispatch reliability rate, no one in the west will be interested.  Sukhoi and its partners get one, perhaps two, chances to prove this airliner’s ability to perform day in and day out. 

To persist in the idea that a Russian designed airliner would be inherently wrong to choose is bad.  The Russians have been designing and building strong, reliable jet aircraft for nearly as long as the west.  They have excellent engineers and aeronautical skills.  They do already know how to build a big jet and they are, after all, the only other country with a space program as long and as technically successful as the United States.  In short, they do have a great body of aerospace knowledge and skills.  It’s an aircraft to watch over the next 2 to 3 years.

It’s an airliner that can actually deliver on its promises and be of real use to a variety of airlines.  This stands in stark contrast to those airliners being designed presently in China, the COMAC 919 and ACAC ARJ21.

Filed under: Aircraft Development by ajax
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