Ac Talks With Air India To Lease Five 777Lrs.

[dagger]

http://economictimes.indiatimes.com/news/news-by-industry/transportation/airlines-/-aviation/air-india-in-talks-with-air-canada-to-lease-out-five-boeing-777s/articleshow/13558767.cms

I presume starting nonstop service to Mumbai would be part of this.

[Guest rozar s'macco]

Mumbai before Delhi? Makes sense though if you are going to go back to India to use aircraft that are already er, broken in.

[st27]

Just to stir the pot.., I wonder if they will be wet leased/crewed..the start of Calins off shore LCC

[dagger]

Mumbai before Delhi? Makes sense though if you are going to go back to India to use aircraft that are already er, broken in.

From what I understand, n/s to Mumbai would be a somewhat higher fare market that aims at a more business-oriented market than Delhi, which has high VFR, highly price sensitive and highly seasonal traffic. Mumbai would use the LR's range capability to the fullest, without a payload penalty, whereas a 773-ER would be able to do DEL.

What's interesting to me is that if you take these five planes, and also the five 300ERs now on order from Boeing, one might conclude that something is up. Of course, AC could lease out the five 300ERs and because they command a premium, it would help pay for the leases on the five 200LRs. Or it could operate all 10 planes. Operating all 10 would be more than incremental growth and suggests there is plan coming to fly more international routes. Or AC will swap out the A330s as part of this, which also should be easy to (sub)lease and would create more aircraft and maintenance commonality since the 330s are RR-powered and the 777s are GE-powered.

[dagger]

Just to stir the pot.., I wonder if they will be wet leased/crewed..the start of Calins off shore LCC

The story says the planes are to be dry-leased to AC. Could some 767s end up in an LCC as a consequence?

[Guest rozar s'macco]

That's what I was thinking. 6 B767's gone within 60 seconds of ACPA's gutted contract being imposed by the government arbitrator.

A330's gone too, but that makes sense to me for the reasons you mention. So- 10 additional B777's, minus 8 a330's, minus 6 B767's.

Net loss of 4 wide bodies, but we don't have the crew anyway due to a few dozen early retirements and a lack of training resources to replace them.

Some route rationalization, probably on the Atlantic, probably LHR/bmi related (no Star partner in LHR anymore).

[taxman2036]

It seems that this would kill three birds with one stone. Increased traffic to India, fleet commonality and LCC. Looks like AC is making the right strategic moves.

[Fido]

It is only the right startegic move IF there is enough passenger traffic out there to fill all of the extra seats AND at a decent price.

The problem with putting bigger airplanes onto any route is that the new people that you are putting onboard are going to be paying less money than the cheapest ticket already sold.

[dagger]

It is only the right startegic move IF there is enough passenger traffic out there to fill all of the extra seats AND at a decent price.

The problem with putting bigger airplanes onto any route is that the new people that you are putting onboard are going to be paying less money than the cheapest ticket already sold.

Well, one idea being floated by Longhauler on anet is that the planes would have an all-economy config with a small Economy Plus section, which I would suggest means 330 seats, which of course lowers the CASM to the point where that might not be a major issue.

[Fido]

The studies being done now with the advent of jet fuel prices being very high is that on the very long-haul routes, without lots of premium fares (ie. a large business cabin) that an airline cannot cover costs no matter how many cheap seats are stuffed inside,

This is taken as a reason why Air Asia-X has dropped to long and medium haul flying.

[FA@AC]

Well, one idea being floated by Longhauler on anet is that the planes would have an all-economy config with a small Economy Plus section, which I would suggest means 330 seats

That's an interesting idea, but given that the economics of the 77L are good only on long sectors, what markets might AC consider for 5 high-density aircraft? A couple of points in India, or does anything else spring to mind?

[dagger]

That's an interesting idea, but given that the economics of the 77L are good only on long sectors, what markets might AC consider for 5 high-density aircraft? A couple of points in India, or does anything else spring to mind?

Toronto or Vancouver to another point in China for the summer schedule. Also India via Vancouver in the winter (Amritsar?).

[DEFCON]

The 330's are surplus to the 'plan' and the 767's will stay until the 787 arrives. The 777 numbers will remain static going forward if the market supports them, but may be reduced in number as the 787's come on line accordingly.

[FA@AC]

Toronto or Vancouver to another point in China for the summer schedule. Also India via Vancouver in the winter (Amritsar?).

I've flown on EK's 10 abreast 777 DXB-LHR. It was ok, but for any longer a flight than that I'd avoid it. For a 13-15 hour sector I wouldn't even consider it. Maybe some would if it was considerably cheaper than more comfortable alternatives.

I understand that talk of a high density 77L is only speculation, but it strikes me as a bit of a wierd concept. Maybe the YYZ-India or YVR-India markets would have sufficient O&D traffic to sustain a route or two on their own, and maybe that's the plan. It would seem odd to market the routes for connecting traffic if the target customer was going to be comfortable on his BOS-YYZ flight but have his kneecaps up his nostrils all the way from YYZ to BOM.

[dagger]

I've flown on EK's 10 abreast 777 DXB-LHR. It was ok, but for any longer a flight than that I'd avoid it. For a 13-15 hour sector I wouldn't even consider it. Maybe some would if it was considerably cheaper than more comfortable alternatives.

I understand that talk of a high density 77L is only speculation, but it strikes me as a bit of a wierd concept. Maybe the YYZ-India or YVR-India markets would have sufficient O&D traffic to sustain a route or two on their own, and maybe that's the plan. It would seem odd to market the routes for connecting traffic if the target customer was going to be comfortable on his BOS-YYZ flight but have his kneecaps up his nostrils all the way from YYZ to BOM.

Ethiopian has a 3x3x3 config in economy with 32" pitch and total seating capacity is 321 seats on its 77L. Obviously, their J section is much smaller, but still has 65" pitch.

[FA@AC]

Ethiopian has a 3x3x3 config in economy with 32" pitch and total seating capacity is 321 seats on its 77L. Obviously, their J section is much smaller, but still has 65" pitch.

My understanding is that routes to India are largely low-yield. Absent high demand for J seats, would AC not thus need a higher density config than Ethiopian's in order to operate the 77L to India profitably?

[dagger]

My understanding is that routes to India are largely low-yield. Absent high demand for J seats, would AC not thus need a higher density config than Ethiopian's in order to operate the 77L to India profitably?

If they did a non-XM 763 interior, the can probably do 330 seats. As Bean stated in another context, the challenge is not necessarily to match an indirect routing $ for $, but to narrow the delta sufficiently so the convenience of the nonstop from your local airport offsets the price difference for enough people. I think it gets interesting at 330 seats, because the total trip cost (max payload) of a 77L is less than a 77W. My thought is that a configuration like Ethiopian is a good idea, with a small but proper J cabin, if the main destination is BOM. AC would get the film industry types and the budding entrepreneurs who want a decent J on a n/s flight. If the main idea here is DEL and/or Amritsar (ex-YVR), then AC might as well go all Y with 31 inch pitch and go for 350 seats.

[Guest rozar s'macco]

Ya know this India problem is starting to strike me as a square peg in a round hole type of problem. At what point does the airline- any airline- just say "why bother"?

It's too far

It's low yield

It's price elastic

It's largely vacation/family related travel, to a very, very poor country

It's corrupt

I get the diaspora thinking, but I am starting to sense that for a million reasons this is a city pair (pairs) that by all rights should work but for some reason just doesn't. BAIL

What about some slightly lower hanging fruit? Bangkok, Manila, Taipei, Moscow, Rio, Ho Chi Minh City, Dubai....I don't know I'm not a spreadsheet warrior but it seems India needs way too many things to go perfectly for it to work.

[Fido]

It is very likely that India would make money if route selection is properly done.

AC could charge a non-stop premium if they get the mixture right of origin and destination. Is it YYZ-BOM and YVR-DEL or vice-versa (I forget)?

Anything else is a connection and there would be little advantage for YYC-YYZ-BOM over going YYC-FRA-BOM and the premium does not work.

[B75/76]

Ya know this India problem is starting to strike me as a square peg in a round hole type of problem. At what point does the airline- any airline- just say "why bother"?

It's too far

It's low yield

It's price elastic

It's largely vacation/family related travel, to a very, very poor country

It's corrupt

I get the diaspora thinking, but I am starting to sense that for a million reasons this is a city pair (pairs) that by all rights should work but for some reason just doesn't. BAIL

What about some slightly lower hanging fruit? Bangkok, Manila, Taipei, Moscow, Rio, Ho Chi Minh City, Dubai....I don't know I'm not a spreadsheet warrior but it seems India needs way too many things to go perfectly for it to work.

I don't understand why this would be such a tough thing to make a go of.

Yes, India has a lot of poverty, but it also has a middle class of several hundred million people and growing. That, combined with the importance of social status and class distinction indicates J class service should be very marketable. There is also the huge number of Indians living around the world including, obviously, Canada, that travel back and forth for business and pleasure.

As well, Canada had started preliminary talks with India about free trade so travel demand will only be increasing

It seems hard to imagine AC could not fill its a/c including a quality J class.

[FA@AC]

It seems hard to imagine AC could not fill its a/c including a quality J class.

Few airlines have had trouble filling their aircraft on flights to India. Many have been unable to make money while doing it. The Indian carriers themselves despite operating in India's go-go economy are mostly basket cases.

[Guest rozar s'macco]

That reminds me very much of the HSBC ad that says something to the effect of, "500,000 people in move to urban centers every week." Or some such utterly ridiculous claim. My understanding is that to be classified as urban, a minimum population density of x is required and this reclassification was happening all over china, and india. No moving, just reclassifying once the density meets the cutoff. The picture shows a VW with a stack of junk roped to the roof driving on a dirt road. Cute, but...

Apparently Edmonton, by the standard used (sorry, no reference) would still be considered rural.

[dagger]

Apparently Edmonton, by the standard used (sorry, no reference) would still be considered rural.

It isn't? Calgarians certainly think so.

[Fido]

It's no wonder that they brag about making the cheapest car and the cheapest tablet in the world! Unfortunately, they can't produce the lowest CASM in the world.

Indian airlines also suffer from the highest taxed jet fuel in the world.

[Super 80]

Watching the passengers getting off in YYC from the London and Frankfurt flights, it would appear that there is a large market for a more direct service from India. Perhaps over YYZ . Rather than the present Jet Airways services to YYZ, FRA and LHR. And of course there is the opportunity to pick up some of the traffic arriving on BA.

It is too fickle a market that is always chasing the lowest fare, when Aeroflot served Seattle there a stampede of pax from YYC and YVR for impossibly cheap flights to India via Moscow. Perhaps a coincidence but in that period Alaska also operated 737's on YYC-SEA in addition to the Q400's.