- a cancellation of 30 orders for the B737-700NG
- Southwest substituting 5 -700NG to the -800NG variant
- Southwest firming 5 options for the -800NG
- the cancellation of 5 options for NG aircraft
Showing posts with label B737-800NG. Show all posts
Showing posts with label B737-800NG. Show all posts
5/16/2013
Southwest launches the B737MAX-7
Yesterday Boeing and Southwest Airlines announced that SWA will be the launch customer of the B737MAX-7. The launch of the B737MAX-7 with an order for 30 aircraft of that type comes with
10/07/2012
Pegasus Order
The turkish carrier Pegasus is about to announce their choice for the next 100 narrowbodies, ATWonline reports. The airline has already decided on which aircraft to take, ATW says and wants to announce it shortly. Obviously A320neo and the B737MAX are in the competition. As Pegasus has a fleet of 40 B737-800NG and two B737-400 right now I would rule out the CS300 as it would be a smaller aircraft than the ones currently in use.
One sentence in the article might give us a hint who will be the winner:
"The carrier expects to start receiving the new aircraft in around three years."
1. In 2015 only the A320neo is available, the B737MAX is coming to the market two years later. So one might think that the A320neo might be the aircraft of choice.
2. But as I laid out earlier, Boeing has about 1,000 B737NG positions to sell until the B737MAX will be the only B737 version produce by Boeing, which could happen in late 2019, about two years after EIS of the B737MAX.
So my guess is that Boeing made an irresistible offer to Pegasus. As Boeing is the provider of the current fleet, they have to loose more than Airbus anyway here.
But let's don't underestimate John Leahy - maybe he surprises us (well, at least me) one more time. But my bet is on Boeing here!
One sentence in the article might give us a hint who will be the winner:
"The carrier expects to start receiving the new aircraft in around three years."
1. In 2015 only the A320neo is available, the B737MAX is coming to the market two years later. So one might think that the A320neo might be the aircraft of choice.
2. But as I laid out earlier, Boeing has about 1,000 B737NG positions to sell until the B737MAX will be the only B737 version produce by Boeing, which could happen in late 2019, about two years after EIS of the B737MAX.
So my guess is that Boeing made an irresistible offer to Pegasus. As Boeing is the provider of the current fleet, they have to loose more than Airbus anyway here.
But let's don't underestimate John Leahy - maybe he surprises us (well, at least me) one more time. But my bet is on Boeing here!
10/04/2012
Boeing B737MAX orders gaining steam
This week Boeing firmed two orders for the B737MAX. On October 1st GOL signed for 75 B737MAX-8 and two days later GECAS for another 75 copies of the -8. Another unidentified customer signed for 22 B737MAX. Boeing has now 821 firm orders for the MAX.
What is maybe more important is that Boeing still has no order for the -7. Also the A319neo has only very few orders so far. There are two possible explanations for this:
1. Airlines are shifting to larger aircraft.
2. Other aircraft, especially the Bombardier CS300 is the better aircraft.
I discussed this also in an earlier post. Against the first assumption speaks that there are markets that do not support a 180 seater and a 150 or 130 seater is more economical.
But there are not really too much orders for the CSeries - yet. My guess is that once first flight happened (and went well) we will see some more orders, maybe also on a larger scale.
Another sidenote of the GECAS order is that there are "only" 10 orders for the B737-800NG included with 15 more options instead of the 25 firm orders originally announced. I also discussed this earlier: Boeing has to sell something like 500 more NG's to close the gap until the MAX enters service. And as a ramp up to full production will probably take another two years, Boeing needs to sell another 500 or so if they do not want to have an overall slowdown in B737 deliveries.
What is maybe more important is that Boeing still has no order for the -7. Also the A319neo has only very few orders so far. There are two possible explanations for this:
1. Airlines are shifting to larger aircraft.
2. Other aircraft, especially the Bombardier CS300 is the better aircraft.
I discussed this also in an earlier post. Against the first assumption speaks that there are markets that do not support a 180 seater and a 150 or 130 seater is more economical.
But there are not really too much orders for the CSeries - yet. My guess is that once first flight happened (and went well) we will see some more orders, maybe also on a larger scale.
Another sidenote of the GECAS order is that there are "only" 10 orders for the B737-800NG included with 15 more options instead of the 25 firm orders originally announced. I also discussed this earlier: Boeing has to sell something like 500 more NG's to close the gap until the MAX enters service. And as a ramp up to full production will probably take another two years, Boeing needs to sell another 500 or so if they do not want to have an overall slowdown in B737 deliveries.
6/01/2012
COC and DOC Part IV
Over at Leeham News where is a heated debate (once more) over if the A320(neo) or the B737(MAX) is the more efficient aircraft. As both aircraft were ordered and are flown in thousands both aircraft obviously cater their respective users - besides there are quite a few airlines operating both aircraft.
I tried to lay out how looking at DOC's or COC's or looking at costs per flight or per seat influences such a comparison in an earlier post.
Let's have another look at it. DOC or Direct Operating Costs are comprised of
I tried to lay out how looking at DOC's or COC's or looking at costs per flight or per seat influences such a comparison in an earlier post.
Let's have another look at it. DOC or Direct Operating Costs are comprised of
1/25/2012
Norwegian goes the American way...
That was a surprise this morning - it was long rumored that Norwegian is one of the airlines that already committed for the B737MAX (100 firm orders plus 100 purchase rights in addition to a follow-on order for 200 B737-800NG), in that case the -8 model. But that they also would order the A320neo (MoU for 100 aircraft plus 50 purchase rights) could not have been expected.
There are two possible explanations that come to my mind as reasons for that decisions to go away from a single-type fleet:
The next interesting question will be the engine choice for the A320neo. Although the selection of the LEAP-1A to complement the LEAP-1B on the MAX-8 fleet would be the most logical choice, they maybe also go the AA way and buy from both engine manufacturers, like AA did it recently for their A319 (CFM56) and A321 (V2500). So the PW1100G could come into play - the factsheet that Norwegian provided with their press release shows the fan diameter of the PW1100G (81"), but that does not necessarily say anything...
There are two possible explanations that come to my mind as reasons for that decisions to go away from a single-type fleet:
- They went the AA way (of negotiating), meaning they negotiated with both Airbus and Boeing until they got a deal from both they could not resist to close them both.
- Their anticipated growth is too large that one of the OEM's could deliver aircraft fast enough to satisfy that growth.
The next interesting question will be the engine choice for the A320neo. Although the selection of the LEAP-1A to complement the LEAP-1B on the MAX-8 fleet would be the most logical choice, they maybe also go the AA way and buy from both engine manufacturers, like AA did it recently for their A319 (CFM56) and A321 (V2500). So the PW1100G could come into play - the factsheet that Norwegian provided with their press release shows the fan diameter of the PW1100G (81"), but that does not necessarily say anything...
4/28/2011
COC and DOC Part III
Today I discovered a very interesting website: The "Airline Data Project" from MIT.
There is a lot of airline data from all major american airlines in that database. From that data you can easily pull DOC and COC's and compare airline to airline, a specific airline though the years or whatever you want to find out.
Let us have a look at two typical carriers:
In 1995 the price for aircraft fuel was relatively stable at about $0.50 per gallon - unbelievably low for us today.
Im early 2008 the price already was in the region of $2.70, then climbing to almost $4.50 in July before falling rapidly to a low of about $1.00 in December 2008.
Here is the chart for American Airlines in 1995.
The cost for fuel and oil is $429 per block hour - 26% of the total cost.
We get a whole different picture for the year 2008.
Now American Airlines has to pay $2771 per block hour for fuel - a stunning 60% of the total, although the amount of fuel consumed per block hour went down from 957 to 940 gallons. This only slight decline in fuel burn shows why American now accelerated their B737-800 deliveries in the last two years. The MD-80 is fuel thirsty.
And now here is Southwest Airlines. The trend is the same:
In 1995 fuel cost were at 30% of direct operating costs. But the dollar value is about 13% less than the $492 paid by AA, as Southwest just burned 773 gallons per block hour and the total costs per flight hour were 14% lower at SWA.
And here are the SWA numbers for 2008:
Fuel and oil costs are above 50%, but total costs are less than 60% of the costs of AA. Fuel burn per block hour was down by 9% compared to 1995 at 705 gallons, the rest of the difference is probably explainable by better fuel hedging at SWA.
I think from these charts we can understand the desire from many airlines to get more fuel efficient aircraft as soon as possible.
There is a lot of airline data from all major american airlines in that database. From that data you can easily pull DOC and COC's and compare airline to airline, a specific airline though the years or whatever you want to find out.
Let us have a look at two typical carriers:
- American Airlines as the typical legacy carrier
- Southwest Airlines as the typical low cost carrier
In 1995 the price for aircraft fuel was relatively stable at about $0.50 per gallon - unbelievably low for us today.
Im early 2008 the price already was in the region of $2.70, then climbing to almost $4.50 in July before falling rapidly to a low of about $1.00 in December 2008.
Here is the chart for American Airlines in 1995.
We get a whole different picture for the year 2008.
And now here is Southwest Airlines. The trend is the same:
And here are the SWA numbers for 2008:
I think from these charts we can understand the desire from many airlines to get more fuel efficient aircraft as soon as possible.
4/14/2011
COC and DOC
Scott Hamilton wondered about changing messages from Boeing regarding operating cost comparison between the 737-800NG and the A320/A320neo.
Indeed the numbers Boeing told to the public were a little bit confusing. But when you look carefully what they really talked about, the picture gets clearer:
Let's begin with the situation we have today: Boeing says the 737-800NG is 8% better than the A320. This is probably a fairly accurate statement when you talk about COC per seat. COC or "cash operating costs" are the costs the airline pays for flying the aircraft from point A to B: fuel costs, maintenance costs for aircraft and engine, crew costs, landing fees, navigation charges. But as the 737-800NG has, in a typical layout, 162 seats compared to 150 seats in the A320, and the difference is - coincidentally or not - exactly 8%, the COC per trip should be right on-par between the two aircraft. That can be explained by the fact that the A320 is a little bit heavier than the B737-800NG, but the engines of the A320 have a better SFC, so that fuel burn should end up in the same range. Maintenance costs for the CFM56-7B and -5B should be not very much different also, maintenance costs between the two aircraft should also not be a decisive factor.
So for now let's assume:
Now the "neo" comes into play. But before the "neo", Airbus will gain 3 seats in the A320 through a new galley design, as we saw at the media briefing day last week.
The "neo" engine are advertised to save 15% fuel, at least when combined with the sharklets, which will be introduced before.
Also, these engines are advertised to have 20% lower maintenance costs.
Now: how much is that worth? First, we have to establish a certain mission we want to look at, as for a long flight fuel costs represent a larger pie of the (cost) cake than for a short flight. For our study let's assume a 500nm mission.
Even now, the question how much 15% lower fuel burn and 20% lower engine maintenance costs are worth in COC largely depends on the cost of fuel:
Now we have:
Boeing stated that the 737-800NG would have a 2-3% cost deficit compared to the A320neo. But that was before Airbus came out with the three extra seats. If you compare COC per seat on a 150 seat basis for the A320neo, the value is 97.7% - the Boeing statement can therefore be seen as accurate.
Scott Hamilton now thought that Boeing's message shifted when they said that the B737-800NG would still be better by 2% than the A320neo - but read carefully: now they are talking not about COC, but DOC, which include capital costs.
I have doubts that it makes sense here to compare DOC, as that implies that Boeing knows the pricing policy of Airbus or can foresee future leasing rates. In reality, it is very hard to estimate DOC's, as leasing rates vary, interest rates vary and so do depreciation rules in different countries.
If Boeing says that the DOC's for the 737-800NG are 2% better than for the A320neo and COC's are (say for simplicity) 2% worse, that implies that in their calculation COC's are 60% of DOC's and so capital costs are 40% of DOC's. That seems to be a little bit on the high side I think, at least in times of $3.00 per gallon, where COC's are higher than at $1.50 per gallon and historically low interest rates, which would lower capital costs. So the 2% cost advantage for the 737-800NG compared to the A320NEO might be, say "overoptimistic".
So, Boeing does not necessarily change messages - but:
Indeed the numbers Boeing told to the public were a little bit confusing. But when you look carefully what they really talked about, the picture gets clearer:
Let's begin with the situation we have today: Boeing says the 737-800NG is 8% better than the A320. This is probably a fairly accurate statement when you talk about COC per seat. COC or "cash operating costs" are the costs the airline pays for flying the aircraft from point A to B: fuel costs, maintenance costs for aircraft and engine, crew costs, landing fees, navigation charges. But as the 737-800NG has, in a typical layout, 162 seats compared to 150 seats in the A320, and the difference is - coincidentally or not - exactly 8%, the COC per trip should be right on-par between the two aircraft. That can be explained by the fact that the A320 is a little bit heavier than the B737-800NG, but the engines of the A320 have a better SFC, so that fuel burn should end up in the same range. Maintenance costs for the CFM56-7B and -5B should be not very much different also, maintenance costs between the two aircraft should also not be a decisive factor.
So for now let's assume:
| B737-800NG | A320 | |
| seats | 162 | 150 |
| COC per trip | 100% | 100% |
| COC per seat | 100% | 108% |
Now the "neo" comes into play. But before the "neo", Airbus will gain 3 seats in the A320 through a new galley design, as we saw at the media briefing day last week.
The "neo" engine are advertised to save 15% fuel, at least when combined with the sharklets, which will be introduced before.
Also, these engines are advertised to have 20% lower maintenance costs.
Now: how much is that worth? First, we have to establish a certain mission we want to look at, as for a long flight fuel costs represent a larger pie of the (cost) cake than for a short flight. For our study let's assume a 500nm mission.
Even now, the question how much 15% lower fuel burn and 20% lower engine maintenance costs are worth in COC largely depends on the cost of fuel:
- At $1.50 per gallon you can assume that the fuel costs are one third of the COC. Engine maintenance costs would be in the 10% range.
- At $3.00 per gallon fuel costs are about 50% of COC and engine maintenance costs are more in the 6-7% range.
Now we have:
| B737-800NG | A320neo | |
| seats | 162 | 153 |
| COC per trip | 100% | 90,5% |
| COC per seat | 100% | 95,8% |
Boeing stated that the 737-800NG would have a 2-3% cost deficit compared to the A320neo. But that was before Airbus came out with the three extra seats. If you compare COC per seat on a 150 seat basis for the A320neo, the value is 97.7% - the Boeing statement can therefore be seen as accurate.
Scott Hamilton now thought that Boeing's message shifted when they said that the B737-800NG would still be better by 2% than the A320neo - but read carefully: now they are talking not about COC, but DOC, which include capital costs.
I have doubts that it makes sense here to compare DOC, as that implies that Boeing knows the pricing policy of Airbus or can foresee future leasing rates. In reality, it is very hard to estimate DOC's, as leasing rates vary, interest rates vary and so do depreciation rules in different countries.
If Boeing says that the DOC's for the 737-800NG are 2% better than for the A320neo and COC's are (say for simplicity) 2% worse, that implies that in their calculation COC's are 60% of DOC's and so capital costs are 40% of DOC's. That seems to be a little bit on the high side I think, at least in times of $3.00 per gallon, where COC's are higher than at $1.50 per gallon and historically low interest rates, which would lower capital costs. So the 2% cost advantage for the 737-800NG compared to the A320NEO might be, say "overoptimistic".
So, Boeing does not necessarily change messages - but:
- they change the topic of what they are talking about
- they are making assumptions which are at least not very transparent
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