Discussion:
Who will be next to offload A330\A340 and replace with 777?
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AdenOne
2007-03-15 13:50:31 UTC
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Air France, Air Canada, Emirates, Cathay, have all offloaded either
all or most of their A330s or A340s or both and replaced them with
B777s or have ordered 777s to replace the Airbuses. Who will be next?

Lufthansa elected B747-8i over more A380s, could it ever order 777s?
Maybe 787s?

South African maybe? I understand that for political reasons they are
still Airbus cheerleaders, but would they ever replace some of their
old A340s with 777s?

Air Mauritius? They have a number of A340-300s...

Any ideas?
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JF Mezei
2007-03-15 20:07:35 UTC
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Post by AdenOne
Air France, Air Canada, Emirates, Cathay, have all offloaded either
all or most of their A330s or A340s or both and replaced them with
B777s or have ordered 777s to replace the Airbuses. Who will be next?
Well, it isn't correct to speak in the past tense. In the case of Air Canada,
the 340s will be first to go. However, it also depends on the health of the
industry. If the airline opens new routes or increases frequency on an existing
route, the 340s may stay with AC for longer period. And AC is likely to ditch
its 767s before the 330s.

When you look at the fleet of old 767s out there, it seems to me that airlines
will want to replace those before the 330s.


Another aspect to consider: While some "Airbus" airlines such as AC have already
made their irreversible choice, there are still a number of airlines that
haven't made any commitments for next generation aircraft.

At the time AC made its decision, all airbus could offer were plans for the 350
V1.0 which was just a 330 with GEnx engines. (it wasn't even launched yet). So
it was really a no brainer for any airline needing to order in that time frame.

AC's cedit was good having just exited bankrupcy and it still had assets it
could sell off (Aeroplan, Jazz and ACTS). It was probably a wise choice to get
all the commitments and financing done at that time instead of waiting a number
of years at which point all 3 units will have been sold/spun off and AC won't
have any assets anymore).


Today however, an airline needing to make a decision needs to take a closer look
at Airbus' current offering because it comes close enough to the 787 to warrant
taking a good look at. And while there may be debates on whether there might be
yet another relaunch of the 350 (this time with single piece fuselage sections
like the 787), it is clear that a relaunch would end up being an improvement.

Finnair reconfirmed its 350 order because for the same price as it had committed
before, it was now getting a better and bigger aircraft.

Once US Air realises it isn't going to succeed in buying Delta, it will have to
also finalise what it will do with its order of 350 V2.0.

In the end though, I suspect that the 350 won't gain serious momentum until
Airbus admits it is going with single piece fuselage barrel sections. If there
is general consensus that it is inevitable, then Airbus should just announce it
now and get working on it.
Post by AdenOne
Lufthansa elected B747-8i over more A380s, could it ever order 777s?
Maybe 787s?
For mid-size wide-bodies, one must not forget that LH now owns Swiss. And it is
quite possible that the addition of the Swiss fleet may give LH a few more years
of growth enabling LH to delay a decision on replacing the mid-size widebody fleet.

Also don't forget that LH is getting some "free" A330s as compensation for the
380 delays.

KLM-AirFrance is more interesting. KLM is replacing its MD-11s with A330s. But
that does not preclude a major switch to Boeing later on. Qantas accepted 330s
and then decided to go on a 787 buying binge.

In the current political climate, it would be unthinkable for Air France to
place a non-Airbus order. So it is quite likely to see AF delay serious fleet
renewall decisions until the climate has become a bit more quiet in France.


Also to consider: Boeing has a large set of obvious orders to come from AA, DL
and possibly UA (with CO probably increasing its orders a few more times). These
orders will load up the Boeing order book and delivery slots, and will make the
A350's delays less of an issue for other airlines. And it will also make Boeing
less agressive with pricing since its 787 is in greater demand and will have
hard performance numbers because it will be in true commerecial use.


If Airbus can give its 350 credibility and really start to move ahead with it
with a real schedule, specs etc, then I think that Boeing will have a tougher
time winning what is left in the current fleet replacement market. It really had
it easy until now with esentially no competition since Airbus' virtual specs and
promises didn't even come close to Boeing's more credible specs/promises.
.
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JF Mezei
2007-03-15 22:20:13 UTC
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Some interesting news from www.yyznews.com:


* Fleet Renewal ---with the imminent deliveries of the new Boeing 777s this
summer the airline is looking to return more of its Airbus A340 fleet to
lessors. US Airways Group is in talks to buy or lease planes from Air Canada.
The talks are aimed at providing US Airways with jets able to fly nonstop to
China. US Airways is one of several U.S. carriers vying for new route
authority to China.
.
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AdenOne
2007-03-16 00:22:22 UTC
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Its gonna be a fight between US Air and South African Airways as to
who gets the A340-500s... Although SAA might relent as they are
already getting 4 A345s from Thai Air.
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AdenOne
2007-03-16 00:22:29 UTC
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Post by JF Mezei
If the airline opens new routes or increases frequency on an existing
route, the 340s may stay with AC for longer period. And AC is likely to ditch
its 767s before the 330s.
Problem is AC has already signed the agreements to offload their
A340s, several (-300) are going to Swiss, and there are rumors SAA
could get its A345s along with the 4 Thai A345s it already said its
buying. AC cant now decide it want to keep them...
Post by JF Mezei
Today however, an airline needing to make a decision needs to take a closer look
at Airbus' current offering because it comes close enough to the 787 to warrant
Yes but I was mainly meaning A340 dumped for B777, Air Canada could
have waited for A350, but would have been stuck with a old fleet until
2014 or later...
Post by JF Mezei
For mid-size wide-bodies, one must not forget that LH now owns Swiss. And it is
quite possible that the addition of the Swiss fleet may give LH a few more years
of growth enabling LH to delay a decision on replacing the mid-size widebody fleet.
Strange I would have thought Swiss would need their planes themselves
unless LH plans to close them down...

KLM has \ is replacing its MD-11s with 15 Boeing 777-209\ERs, and
replacing its B767-300s with 10 A330-200s.
It has also ordered 4 Boeing 777-309ER, which will begin replacing its
B747-400s.

But that still leaves open a gap for B787 \ A350, maybe.
Post by JF Mezei
it would be unthinkable for Air France to place a non-Airbus order.
Ah, without seeming rude, then why was Air France the launch customer
of the B777-300ER? And Why have they ordered enough B777-200ER to
replace all of their A340s? They elected to replace their long-haul
fleet with B777s a few years back. They might not need to renew any
fleet for some time, other than their narrow body fleet and like BA
that will most likely remain Airbus, but as for long-haul, its 777s
all the way fro AF.....
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Tom Sanderson
2007-03-16 02:14:24 UTC
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Post by AdenOne
Post by JF Mezei
it would be unthinkable for Air France to place a non-Airbus order.
Ah, without seeming rude, then why was Air France the launch customer
of the B777-300ER?
You cut off the rest of the original sentence. It would be unthinkable *in
the current political climate.* Airbus is a huge topic in French politics
right now. Air France is a very strong Boeing customer and they
intentionally keep that a very low profile to avoid the obvious PR problems.
Now would be an extremely bad time for Air France to be pointing out that
they don't buy much from their "national" manufacturer.

Tom.
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AdenOne
2007-03-16 06:04:22 UTC
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Post by Tom Sanderson
You cut off the rest of the original sentence. It would be unthinkable *in
the current political climate.* Airbus is a huge topic in French politics
right now. Air France is a very strong Boeing customer and they
intentionally keep that a very low profile to avoid the obvious PR problems.
Now would be an extremely bad time for Air France to be pointing out that
they don't buy much from their "national" manufacturer.
Yeah point taken, but if Airbus claims that, then the EU will say,
whoa, we thought Airbus was a "European" manufacturer, not a French
one...

In the end, AF still buys Airbus for its short-haul fleet so that
might make up for it. Also, they have several A380s on order. But it
would be wise of them to keep the 777s low-key...

In fact, is AF\KLM totally private, or still state-owned? Ime not
entirely sure about the ownership structure. If they are private, it
doesent really matter what the government thinks about fleet ordering
unless they still have some say.
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Daniel
2007-03-16 09:10:36 UTC
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Post by AdenOne
In the end, AF still buys Airbus for its short-haul fleet so that
might make up for it. Also, they have several A380s on order. But it
would be wise of them to keep the 777s low-key...
In fact, is AF\KLM totally private, or still state-owned? Ime not
entirely sure about the ownership structure. If they are private, it
doesent really matter what the government thinks about fleet ordering
unless they still have some say.
AF was written off by the mid 90s, Sabena and Swisswair having better
chances of surviving. It required an awful lot of public funds,
government protections ('creative' slots management, competition buy-
out...) and a very skilled manager, Christian Blanc to bail it out and
then partially privatize it (gvt retains 'strategic' participation).
All French people remember this. Since then, it is committed to
profits and well managed. They will buy Boeing aircraft whenever it
helps the bottom line, that is, when the competitive advantage is
compelling enough to override national considerations. So them buying
777s is the best testimony you'll find (LH never bought a 777, but
they've ordered a load of 747-8 to bridge an A350/787 with A380s). AF
is also a launch customer of the 777 freighter version. Then Cathay
has been ordering A330-300s along with its many 777s because that
version is very good for high density regional routes. Initially, the
-300 was to be launched by Air Inter for domestic routes (one hour
flights!), but that order was killed by the TGV network extension to
southern France. It would have been a case where a large twin-aisle
was to be used in a rather low cost configuration, very similar to
JAL's domestic use of 747 HDs. The -300 is a good plane on a niche
market. Lastly, Finnair (and LH Cargo (and DoD?)) were pissed by the
abrupt termination of the MD-11 production, so I think they'll do
almost anything NOT to buy Boeing at this time.
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AdenOne
2007-03-16 14:58:42 UTC
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Interesting. So if the A350 eventually becomes a viable 777
replacement, chances are it will be double good for AF. I was quite
surprised to realize they woulden't be getting any A340-500 \ 600 at
all when they ordered their first 777s.
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JF Mezei
2007-03-16 20:48:57 UTC
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Post by AdenOne
Interesting. So if the A350 eventually becomes a viable 777
replacement, chances are it will be double good for AF. I was quite
surprised to realize they woulden't be getting any A340-500 \ 600 at
all when they ordered their first 777s.
I think that the political/nationalistic pressure applies to new products from
Airbus. And once AF has done its good deed by helping the local economy, it is
then free to buy based on real business requirements.

This was most certaintly the case when it was government owned. Probably still
the case today, but to a much lesser extent. However, should AirFrance today
announce it was buying the 787, there would be a HUGE public/media backlash
against AF since it would be seen as making things worse for Airbus job cuts.
.
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AdenOne
2007-03-17 00:27:58 UTC
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Post by JF Mezei
This was most certaintly the case when it was government owned. Probably still
the case today, but to a much lesser extent. However, should AirFrance today
announce it was buying the 787, there would be a HUGE public/media backlash
against AF since it would be seen as making things worse for Airbus job cuts.
But if it hides under the radar till the A380 is being churned out (as
one does...) at full pitch and Airbus is out of the spotlight, then we
might see them going to Boeing and saying, "please sirs, can we have
some 787s ?"

Would certainly be interesting.
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Daniel
2007-03-17 08:24:21 UTC
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Post by AdenOne
But if it hides under the radar till the A380 is being churned out (as
one does...) at full pitch and Airbus is out of the spotlight, then we
might see them going to Boeing and saying, "please sirs, can we have
some 787s ?"
Would certainly be interesting.
I don't see them ordering 787s, their fleet is in good shape, very
well maintained, they can easily wait for Airbus to make a killer-
offer on A350s and they'll have GE options there (France has a love
affair with GE :) What bothers Airbus is lack of GE commitment on the
-1000 which is to take on the 777-200ER. The big question at AF is
what will replace the 747-400 which has been very popular as you'd
expect... more 777-300ERs or 747-8s ? Going 747 would seem impossible
for now because of the A380 situation through 2012. Well, they can
keep them jumbos for awhile, AF has just replaced its last 747-200 on
the Antilles. So far, AF has been very comprehensive with delays,
you'd even say in no particular rush to field A380. Lufthansa less
patient and seemingly better emancipated, even threatening to move
their hub to Zurich and say bye-bye to Germany if the CO2 emission
caps were imposed on EU airlines. Those guys are running an airline
and just that now, and more likely to order 787s someday.
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Tom Sanderson
2007-03-16 14:58:38 UTC
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Post by AdenOne
In fact, is AF\KLM totally private, or still state-owned? Ime not
entirely sure about the ownership structure. If they are private, it
doesent really matter what the government thinks about fleet ordering
unless they still have some say.
Even if they're 100% private, the government still has a lot of say.
Aviation is one of the most heavily regulated industries in the world. Even
a completely private carrier is at the mercy of the regulations of the
country they operate in. Especially somewhere like France, where the
government doesn't think twice (may not even think once) about stomping all
over private business matters.

It would be relatively trivial for France to invoke some technically legal
but obviously political regulation to force AF/KLM towards Airbus and away
from Boeing (a "foreign content" provision based on B.S. regional security
concerns would do it).

Tom.
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Daniel
2007-03-16 17:58:51 UTC
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Post by Tom Sanderson
It would be relatively trivial for France to invoke some technically legal
but obviously political regulation to force AF/KLM towards Airbus and away
from Boeing (a "foreign content" provision based on B.S. regional security
concerns would do it).
No, it's less subtle than that. 20 years ago, 50% of ALL French
economic activities (100% of the banking sector) were public
(government owned). Then there were several waves of privatizations
with governments seeking to create so called "noyaux durs" (hand
picked core shareholders). Those have an interesting pedigree, a bit
like Russian tycoons. Think of Lagardere for instance, head of Matra-
Hachette, a weapons AND media group making lots of money from
government procurements, but still no match for Aerospatiale, the big
French public aerospace conglomerate that was merged with DASA to form
EADS. Well, it's Lagardere and his 7.5% who supposedly steers all the
French interests in EADS through the SOGEADE holding (includes that
15% French stake remnant of Aerospatiale). If you believe that, you'd
have to believe Lagardere himself when he admits he didn't do any
insider trading when dumping shares, but was rather displaying his
'incompetency' for not knowing about A380 delays. More likely, you'd
conclude Mr. Lagardere is just a front man peggybacking the French
government. That gvt is very heavy handed with privatized or public
companies. 777-300ER must really be a darn good aircraft for Spinetta
to pitch against an A340-600.
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John L
2007-03-16 00:43:43 UTC
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And AC is likely to ditch its 767s before the 330s.
I dunno. They are in the process of doing a complete cabin refit on
the 767-300 fleet including biz class flat beds like on their new
777s. That doesn't seem like something they'd do with planes they're
planning to unload. Also, it seems that a 767 is about the right size
for their trans-Atlantic routes like YYZ-LHR.
When you look at the fleet of old 767s out there, it seems to me that
airlines will want to replace those before the 330s.
Maybe, 767 is smaller, probably the right size for a lot of missions.

R's,
John
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JF Mezei
2007-03-16 04:59:06 UTC
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Post by John L
I dunno. They are in the process of doing a complete cabin refit on
the 767-300 fleet including biz class flat beds like on their new
777s.
Their 767-300ERs are ex CP and are much younger than AC's own 767s. Also,
consider that the 777s are starting to trickle in now, but the 787s will trickle
in later. So the 340s are the first ones out since that is what the 777s are
replacing.

Once the 787s start to come in at decent pace, you'll probably find AC returning
its oldest 767s first.

But the youngest 767s are still there for more than 5 years, so upgrading cabins
is necessary sicne AC is so far behind all other airlines in cabin amenities.


Remember that an airline can only integrate so many new aircraft per month. It
isn't just cabin customisation, it is also pilot retraining capacity.
.
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