Fuel, Payload, Margins and the 787-10

United's decision to upsize its outstanding 787 order from -9s to -10s probably warrants more attention. There's the obvious factor of rising traffic numbers and limited slots that plays a role. But there are other factors to consider, too. Here is data showing that this decision is not only sound but also rational. The airline business makes money from payload. If it doesn't pay, it's just weight, best limited in every and any way possible. Here's a payload chart showing United's twin-aisles over the past few years. Focus on the red box. There you see the 787-10 is performing at similarrates to the much larger 777-300ER. Click the chart to enlarge it and make it easier to see. [caption id="attachment_186662" align="aligncenter" width="580"] USDOT T-100; AirInsight[/caption] The latest data shows the 777-300ER at ~79,000 pounds of payload per flight, compared to ~73,000 for the 787-10. The newer model has a ~7% lower payload. But here's the kicker - the 787-10 gets 86.2 ASM/Gallon of fuel compared to 66.9 for the 777-300ER. Here's a comparison table that adds the 787-9. [caption id="attachment_186663" align="aligncenter" width="271"] US DOT; AirInsight[/caption] United's 777-300ERs are its newest 777s, but they aren't state-of-the-art in terms of fuel burn. Moreover, as they age, aircraft have lower payloads-they age as people do. This chart lays out United's current fleet and the model ages. United's 777-300ERs are on average 8 years old. That means they have another ten years or so left. The 787s are a generation newer, and of those, the 787-10 is the newest. From a United perspective, its fleet is great. But take a look at the chart for perspective. United is operating an older, less fuel-efficient fleet of twin-aisle aircraft. [caption id="attachment_186665" align="aligncenter" width="389"] FR24; AirInsight[/caption] Given that fuel is the highest operational cost, fuel burn optimization is a primary focus. And by that measure, the 787-10 is #1. This is confirmed by the data we see from Skailark. Ergo, are you surprised Delta has also ordered the 787-10? The question is, when does American Airlines follow suit? These three are in an intense daily battle. If the 787-10 delivers margin, they are going to buy it. Now take a look at the T-100 again. Here we offer a metric called "Payload Ratio," which is the freight weight as a percentage of payload. [caption id="attachment_186666" align="aligncenter" width="492"] US DOT T-100; AirInsight[/caption] The chart offers insight into aircraft. American and United are Boeing-focused, and Delta is Airbus-focused. What you're thinking is confirmed in the data. Filtering for twin-aisles, among these three airlines, this is what we get. [caption id="attachment_186668" align="aligncenter" width="580"] US DOT T-100; AirInsight[/caption] At the end of the curve, Boeing registers 16.3%, while Airbus registers 10.3%. Is there a data gem here? Why yes, the A330-900 is not a good performer in terms of payload ratio. Take a look at the table. [caption id="attachment_186670" align="aligncenter" width="480"] US DOT T-100; AirInsight[/caption] The 787-10 (78X) delivers a payload ratio that 105% better than the A330-900 and 34% better than the A350-900. If you were buying twin-aisles right now, you'd be right there, in line with United and Delta.

US Flight Planner - US DoT On-Time Data	Airbus vs Boeing - Official OEM Data
US Airline Schedule Performance - US DoT Data	Daily OEM Production & Deliveries -

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