Overnight two deals announced by Republic Airways appear complex.
- Lost a deal with Flybe in the UK for 20 E-175s and defers delivery on four. Flybe and Embraer agreed to reduce an outstanding deal for 24 E175s on order by 20 aircraft.
- Won a deal for 50 E-175s at Republic (for United Express) – transferring the Flybe order plus more. United anticipates deliveries will begin in July 2015 and continue through the summer of 2017. The new aircraft will replace large turboprop airplanes and older, less-efficient aircraft and are in addition to 70 E-175s whose deliveries began this year for other carriers to operate as United Express.
- Embraer’s backlog is net +30.
- Flybe gets 24 Q400s, leased from Republic. So this is not a new order for Bombardier.
- The deal is a sublease and will “supplant 21 of the same aircraft type whose lease periods are ending over… Continue reading
This is a continuation of our recent story on the demise of the 747. There have a spate of stories recently about the 747s future. Most of these stories talk about the lower costs of the Super Twins and how they can replace the 747. Of course that is a big factor, but what are these costs? Let’s take a look at the 747-400 data .
There are 193 747s operating in the United States and of these, 62 are -400s. Let’s look at data from three US airlines flying the 747-400; UPS, Delta and United.
UPS is a relatively recent acquirer of the -400, which replaced older -100 and -200 models in its fleet. Notice that from 2009 when its flight hours started to operate at a typical 25,000 hours per quarter, repair costs kept rising. Freighters tend to be retired passenger aircraft and this means they are old to start with. The UPS fleet consists of 12 -400Fs and one -400M. The -400M is over 20 years old at this writing; six of the -400Fs are over 15 years old, and the remainder are between five and six years old. It is notable that maintenance costs for both airframe and engines have continued to rise, despite similar utilization in recent years. Continue reading
The US DOJ, various state attorneys general and the District of Columbia have filed challenging the American Airlines (AA)–US Airways (US) merger. This news was not what was expected by industry followers. The previous merger between Delta and Northwest went through without a hitch, followed by United and Continental and then Southwest and AirTran, all of which were approved. How is this merger any different?
It can’t be competing routes. Delta and Northwest had 12 overlapping non-stop routes, United-Continental 11, and Southwest-AirTran 18 routes. USAirways and American overlap on 12 – so that certainly can’t be the reason. It appears that the DOJ has decided, after three mega-mergers, that a fourth will be anti-competitive and change the nature of the industry.
Up to now the US has been leading the airline industry in turning around its profitability. This has been enabled by two key… Continue reading