A Commercial Aviation Consultancy

Airbus

As reactions to the disruptive longer range A321neo idea from Airbus percolates, we took a look at the key market for this aircraft. Take a look at the tables below: there are 636 (~65% of all 757s delivered) Boeing 757s in US airline service.  In the second table we see how the model breakdown looks.2014-10-23_15-23-14Nearly 70% of the US fleet is the 757-200 model.  This is where it appears the new A321neo is being aimed.  Now lets see where Airbus sales team will be focusing their attention.

2014-10-23_15-30-01Even as we consider the fleet, it is worth noting the 757 has started to age.  American is retiring 19 or 18% of its 757 fleet by year end.  United has plans to retire 37, or 28% of its 757s this year.  Delta has not shared its 757 retirement plans.  But two of the big… Continue reading

Frequently industry analysts get caught up in the vast amount of minutiae this industry generates.  We decided to step back and take a 50,000 foot look at the industry and came up a few charts we find illustrative and interesting.

Taking the global fleet and breaking it down by regions gives us the first chart.  Three markets are clearly crucial and make up 75% of the market.  Numbers in the columns represent the fleet type size.  The bold numbers indicate how much of the global fleet is based in the region.

The smaller markets are rather similar in extent.  Turboprops represent 9.8% of the market, narrow body aircraft are 71.5% and wide body aircraft make up 18.8%. Continue reading

Last year the first Airbus Market Survey in Latin America provided valuable insights on how airline executives in the region perceive market evolutions and fleet requirements.  Airbus has just launched their 2014 Airbus Market Survey in Latin America.

In the 2013 results Airbus discovered that:

  • Intra-regional connections was the top long term network development opportunity
  • The market has a “very optimistic near-term outlook”
  • Criteria for new aircraft is driven by fuel burn, revenue generation ability and fleet rationalization
  • Airlines need to see savings of 15% to transition to same generation and 25% to transition to next generation
  • Best age to replace aircraft is between 8-12 years or a 15-20% cost improvement

With that backdrop, let’s look at this market.  The table shows the regional fleet earlier this year.  Over 77% of the fleet is narrow body (single aisle).  This is why the intra-regional market shows up… Continue reading

In the business of buying airplanes, an airline will always seek the lowest cost.  Just as they do with every other production input – lowest cost wins every time.   So how is it that with the pending Azul order, “Boeing has not been given the opportunity to present a proposal for single-aisle airplanes“?

On the face of it, this looks like a selection that could not secure the lowest costs for Azul.  How does this make sense? As an Azul shareholder you would want to be certain your company secured the lowest cost option. Let’s go through some data points and thoughts to see if a pattern emerges.

Airbus wins the deal:

  • Creative marketing on the side of Airbus.
    • Driven by the fact the airline already committed to A330 and A350-900s
  • Which offers common flight-deck ratings
  • And, lets say it again, creative marketing. Volume… Continue reading
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