Reading an article about how British airlines have been hit by the 787 delay I came across this tidbit:



http://www.independent.co.uk/news/business...ner-800284.html

Makes me wonder if we'll see more 777s being leased to other carriers until the 787s arrive.

Well, well, well...

"2 Engines 2 Tide Us Over"

Where will they source 777s?

ILFC and GECAS are maxed out, and I cant think offhand whether VS would want to go for new builds and still end up waiting at the back of the queue.

But with partner SQ taking delivery of 77W's, perhaps a deal between the two may be the way to go to release some older 77A's or 77E's?

That would depend on how desperate VS would be for capacity. Remember that DL for years has been looking at getting additional 777 capacity asap, but always turned down the older SQ jets due to the high number of cycles on them.

Ah, but VS's route network is nowhere near as demanding or as large as DL's...

On VS and capacity, they are really running things ona shoestring equipment-wise. Anecdotally, I was on VS flight in Dec. out of LHR where we were notified of a 12 hour delay 3 days ahead of time as the bird was in SYD and had a mechanical. There wasn't a spare available?

The note about high cycles is surprising because Singapore has a reputation for depreciating and replacing aircraft very quickly. Granted if they were A market 773's, they could have a lot of cycles on them, although EK might be another option for DL for capacity in a hurry?

Maybe they want to replace the fuel hungry pig-birds on some routes. The 77W is pretty much tailor-made for VS's Ops.

I dont think there are new builds available before they would have got their first pair of 787s, those arriving in 2011. Recent new 777 orders are booked for circa 2012 (LY) / 2013 (BG).

DAE have 10 777-300ERs on their way as of 2010 which as of yet havn't been (publically) placed, although a 77W is a lot more aircraft than the 789 it would be sitting in for. Unless of course they're thinking more longterm and are using the compensation/interim situation as a convenient way of bringing the topic to peoples attention.

77W wouldnt really be so bad considering the poo tubes they also operate. 77L would be a better option, but again, I dont think any lessor has these on order, and would for VS, have to be new build, should that be the airplane they decide upon.

True, but the route profiles of ATL-CDG or JFK-LHR are not that different than say LHR-ORD or LHR-JFK .


The EK 773s were an option, but unfortunately EK extended the leases on them.

It would be quite ironic if VS wound up with 777s, considering the awful decision they made in rejecting the cut-price deal Boeing offered them in 2002 on 777s.

VS is actively in discussions with SQ (amongst others) about additional poo-tubes (A340s)... That a/c (A340), is costing the airline approx $150m per year in additional fuel costs over a similar number of 777s - tht's about 5% of VS' annual revenues... Scary stuff.

Even more frightening when you consider just how small its route network is to actually contribute towards that revenue....SRB royally screwed up with the A346 deal, and now the $100+ barrel of oil is biting everyone in the ass, including his.

I wonder how Lufthansa manages to make theirs work?

..maybe (I'm completely hypothesizing here) they, especially LH took the "fuel cash-backs" Leahy was promising to other carriers..

http://www.flightglobal.com/articles/2006/...tches-lead.html

^

Interesting proposition that Jacobin777, although I cant see either Airbus admitting that with VS or LH publicly.

The deferral of VS's poo tubes may just be sped up if SRB thinks the 787 delays are bad enough to warrant it.

What I find interesting about VS's statement on the 787 delay is this:

VS is NOT the 787-9 launch customer, yet it feels stung by the delay - yet there hasnt been a peep of noise from the -9 launch customer, Air New Zealand....

..Thanks mate........VS's deferral is certainly quite interesting...and I do agree, I can't see Airbus admitting anything (nor should they, there should be confidentiality clauses)....I wouldn't be surprised if IB is regretting their decision also, especially given the fiasco and bad-will it created...

The B789 won't be delivered for a while so maybe NZ is taking a "wait and see approach"..its really the first few B788 customers who will be affected the most...

If VS placed an order today, what could they get earlier, 77W's or 748i's? The 77W is only 5 ft shorter than the 346, but the extra width would be huge for VS, It would allow them to go 4 across in their J class rather than the current 3. Even if the cut in length means fewer rows of Y, the seat count in Y wouldn't go down because they would make up for it in moving to 9 across in Y. They could keep their same Y count, raise Y+ by 1/7 and raise J by 1/3rd.

I don't think they can get them in 2009, but I think they can get them in 2010 however..which when one looks at it,isn't too far away....B748I's are available either in 2010 or 2011.....

Whatever happened to Four Engines For Longhaul - the knob!?

..oh come on CXBoi, we know that spiel was over a while ago...

LH did indeed take the fuel cash-backs when they made their A340 top-up order last year.

VS, in so far as I can recall, don't have the same cushion in place...

Doesnt say much for Airbus' green agenda...thanks for that insight Rob

thanks.....quite interesting.....I'm sure VS isn't too happy about that...but hey, that's how business works..a lot of it is about timing...!

That will be painted on the side of the 748i

I'm surprised the tree-huggers haven't picked up on this yet. Airlines who purposely buy gas-guzzling aircraft, knowing their extra fuel costs are covered.

Cash is green, isnt it? At least US dollars are.

It annoys me to no end that SRB was banging on for months about biofuels etc etc, got "usurped" by Airbus' A380 fuel tests first and continues to have the audacity to fly the worlds most [insert desired expletive] airplane only then to come full circle and want 777's.

Some may call it irony, quite frankly its piss poor fleet strategy. For 30 years now, quads have been on the demise, twins are and have been the way forward...go figure Brannie...

SQ has shown no desire thusfar to divest of their 773As (which do fill a niche in their network), and they don't have any 772As.



DL tried to get EK's 773As last year, but the carrier renewed the leases on them instead.
SQ's 773As are relatively high-cycle, but not nearly as much as the 9V-SR* series, which DL has twice offered-for then walked-away from.



How so?
Cargo is certainly a benefit, but the 77L is monstrously expensive and would take a while to procure. VS doesn't really operate anywhere where the 77L would give a feasibility advantage over a lightly used 77E. Heck, even the 773A could op all of VS' N.American and African operations decently well, allowing them to focus some of their longer ranged aircraft on Asia et al.

77L in terms of size closeness to the 787-9 that VS has on order....I s'pose a 77E could equally suffice their network too.

http://bjones4.com/temp/VS_777.jpg

Hey Ben, it almost seems natural somehow and has already been flying the skies.

Thanks for the image.

VS certainly does not need the range or the lift of the 77L, but Boeing a 77L should have better long-term re-sale value, so Boeing might offer VS a strong enough deal to take them instead of new 77Es.

That would earn you a ban on Anet!

I think there's a lot more going on here than meets the eye. VS placed their original 787 order for 15 frames in March 2007. In July, they said they would soon exercise the eight 787 options they held -- see http://www.fleetbuzz.com/forums//index.php?showtopic=13752 -- which has not happened to date. Now there's talk of some sort of 777 lease as a stopgap or 777 replacement for some of the 787s. Or something.

To me, the 787 option non-exercise is a critical element taht's been overlooked so far. VS didn't just fall out of love with the 787 or get concerned about a possible delay two weeks ago -- something's clearly been up for some time now. They apparently got cold feet back in the fall or maybe even late summer. Now the real question is what their actual situation is and what they're trying to do now -- I think the 787 delay may just be a convient excuse they'll use to hide the fact that changed their fleet plan yet again. And while 787 delays may be a factor in that change, I also suspect there's more to it than that.

And also let's not forget that Virgin hasn't been doing that great financially. Their operating profits were down by a third even before considering Virgin Nigeria and their referred A346 deliveries in late 2006: http://www.fleetbuzz.com/forums//index.php?showtopic=14683

I'm with you M, there are a lot of factors in play here. Between open skies, and the ending of the VS/CO relationship, VS needs to decide where it's going to be and go there instead of d*cking around with publicity and wooing the media. Moving forward, VS could theoretically run their entire route network with 789's and either the 748 or 77W. If they want the 380 as icing on the cake, they can have it. I have noticed that a very good chunk of A380 customers are also 77W operators. These two planes are pretty much bracketing the 744 market.

The big thing is that VS needs to decide where they will fly their 789's. You could reasonably see 789's replacing all the A343's, and being the exclusive aircraft for the New York market, where they currently have 6 daily frequencies. That leaves 3 planes for assignment. These could ostensibly be used for more frequencies on current A343 routes, or to open up new destinations (Maybe SAN?).

The 789 option question is really contingent on their decision regarding long term 744 and A346 replacements, and this, in turn, is based on whether they take the 380 or not. If VS takes the 380, then a 77W order is logical as it brackets the lower end of their 744 capacity, and could be a 1:1 replacement for the poo-tubes. This makes taking the extra 789's unlikely.

A simpler option would be to cancel (or indefinitely defer) the A380 order, and go for 748i's to replace 744's and poo tubes in one fell swoop. Then take up the options and switch the 789 order to GEnx.

I'm starting to think that there's going to be massive overcapacity at LHR when all these 380's start running around. Carriers will move to put them on their most profitable routes, and oddball carriers (IE Kingfisher) will put them at LHR for prestige purposes. Every A380 customer, save for LH and AF will be flying 380's into LHR. This, along with openskies has serious ramifications for VS. They need to cut costs and simplify operations. This means dumping the poo-tubes first of all. This fleet plan shuffling is a sign that VS management have realized there is a tidal wave coming.

The 777s would be compensation for the the 787 delays. As for the unexercised extra 787s from last summer, this has yet to be realised because VS were in discussions with Boeing about getting improved delivery slots for them, not because they had gone off the 787s or were considering some other a/c type.

As for the A380s, I'm 99% that VS will take them. This is fact more than opinion. Whether this is the right move or not is a seperate issue.

VS are in no hurry to replace their 747s as they perform very well for them. Their dilemna is to replace their A346s, and fast. I see VS' fleet looking as follows by 2012-2013:
789s, 777s, A380s.

By then there may well be some 744s left, but the poo-tubes will be gone.

I've been saying this for quite sometime now....there is going to be over-capacity with all of the A380's coming online the next few years, especially on the Kangaroo Route. This is on top of the decline in load factors (according to the IATA)....

Some flights and routes warrant the A380, but I think a lot of it is going to be "over-kill". Of course, only time will tell.





Historically, long deferrals eventually turn into cancellations (i.e.-such as PR's deferrals/cancellation of B747's to B773ER's). However, some of the recent A380 deferral carriers (such as QR, MH, etc.) have stated they will take the birds in a few years That being said, I see VS's situation differently and I wouldn't be surprised to see their A380 deferral into a cancellation and the deposits move to the larger A350XWB variants.

The A346 situation is quite interesting as they are quite new and the market isn't very large for them. If VS could get a good deal on B777's, then I can see them possibly getting rid of their A346's...there are operators still willing to take them. The A343's are efficient and will stay in the fleet for a while..IMHO..

Robert, I'm with you RE the 744's. The big if in my book is whether they go for 77W's or 748's to replace the A346's. If, as you say, VS will be taking their A380's, then my money is on 77W's. However, the ease of eventually replacing one variant of the 747 with another, along with the possibility of having a single engine type across the entire fleet, and competetive prices from Boeing (In addition to exchange rate benefits) might make VS think again about the 748.

'Historically', you may be correct - but I'm basing my comments on fact, not precedent...and fact is that VS are very likely to take the A380s.


There's an interesting precedent - If you recall, when SQ ordered 777s back in 2002/3, Boeing agreed to take the A340 contract off of their hands...I'm not sure what Boeing did with its A340 order (sold it to a lessor I'd guess), but it may offer some indication of where things could go with VS... Now, this is pure speculation - no fact/insight behind this so feel free to scrutinise all you wish.


I personally see no chance for the B748 at VS and I've not ever heard it even mentioned, not once.

VS are taking Etihad's remaining A343 off their hands though and possibly an A346. Many of VS' 744s have to go through some heavy maintenance next year (C & D checks) and their is some oil leak problems with the A346s currently meaning that they're spending a lot more time on the ground than usual...

The SQ aircraft were all taken on by Boeing Capital and leased out, most are with Emirates & Etihad IIRC. I believe a similar deals was also given to Air Canada with it's A340 fleet, but in that case Boeing taking them was contingent on AC not being able to shift them themselves beforehand, and so far they dont seem to be having any problems doing just that.

I wonder also if Airbus included anything along the lines of reprice guarantees to VS similar to what they did with Iberia.

Ben, what type of 'reprice' guarantees are you referring to - is it residuals/second hand values you're referring to?

As part of Iberia's most recent A340 purchase, Airbus included provisions for minimum resale price guarentees, where Airbus would cover any sales shortfall below a predetermined price. This was in response to Boeing's assertion that the 77W would have higher resale value.

Yes they have stated they will take those birds, but until we see those birds in VS colours, I'm going to stay skeptical on them getting it. Only time will tell. There are a lot of variables between now and the time they actually take those birds.



There is still a possibility of VS taking B748I's....there have been negotiations with Boeing on it, but I'll give it only a 30% chance.

The only way I see VS taking the 747-8I is to operate them out of MAN to cities like MCO and such. LHR will likely be purely A380 ops for them (when it comes to 400+ seaters).

The B748I would work well with LGW operations also.

LGW was what I actually meant. Why I said MAN...

LoL!

Hanging around with too many Mancunians perhaps .