-a 2002 article with some insights!
Ultra large aircraft: fleet planning strategies& economics
The advent of a variety of ultra long-range large and ultra-large aircraft has allowed airlines to pursue more flexible fleet planning strategies. Airlines’ needs for different aircraft sizes, and the operating cost performance of the types on offer are examined.
Long-haul fleet planning has become more flexible with the advent of 250- to 550-seat aircraft with ultra-long-range capability. This is a change from the domination of the major long-haul routes by the 747-400 prior to 2002. These new types allow airlines to match supply more closely with passenger demand. Moreover, many 747-400s have already been replaced, and others are due to be. The seat configurations of 747-400s vary by operator, but average about 365. The types closest in capacity are: the A340-600, with an average seat count of 307; the 777-300ER, with an average of 316 seats; and the A380, with an average of 484. The 747-8I, due to enter service with Lufthansa in 2012 and Korean Air in 2013, is expected to be configured with 380-430 seats. No replacement for the 747-400 has equal seat capacity. Airlines can therefore choose types that are smaller or larger than the 747- 400. Selection criteria will depend on which types suit an airline’s capacity requirements and the relative operating economics of the choices available.
Capacity & fleet
The active passenger fleet of 747s used for long-haul operations by 24 of the world’s major 747 operators has declined from 506 units in 2002 to 300. The number of 777-300ERs and A340- 600s has increased by 215, and 40 A380s have also entered service. The long-haul fleet development of these operators has also included the retirement of MD-11s and the entry into service of 777-200s, A340-500s and other A330 and A340 models since 2002. The period since 2002 is significant because the 777-300ER entered service in 2004, and there were only four A340- 600s in operation at the end of 2002. The first A380s entered service in 2007 with Singapore Airlines (SIA). Before 2002, therefore, airlines had little choice of types close in size to the 747. In many cases, the decline in the number of 747s since 2002 has led either to: their replacement with smaller types and service frequencies being maintained; or, in a smaller number of cases, their replacement with the A380, and service frequencies being maintained or reduced. Six airlines with a need for high-capacity aircraft, including Air France, SIA, Korean Air and Qantas, have introduced the A380 and reduced their 747-400 fleets in parallel. Many other 747-400 operators have reduced their 747-400 fleets since 2002, and increased their 777-300ER and A340-600 fleets over the same period.
747 phase-out
Large fleet reductions
Airlines that have retired or phased out large numbers of 747s in their fleets are Air France, United Airlines, Northwest Airlines (Delta since 2008), EVA Air, All Nippon Airways (ANA), South African Airways (SAA), Korean Air, Asiana, Malaysia Airlines and Air New Zealand. These carriers have collectively reduced their 747-400 fleet by 96 aircraft since 2002. The largest reductions, however, have been by SIA and Japan Airlines (JAL), which have phased out 36 and 45 units. United, Northwest/Delta and Malaysian airlines have collectively removed 40 747s since 2002, and have not replaced any of these with large widebody types. They have, however, replaced the 747 with smaller widebodies such as A330s and 767s on many routes. United has phased out 15 747-400s since 2002 and has replaced some of this lost capacity on its long-haul network with 767s and 777-200s. It underwent a rationalization of its route network after it entered Chapter 11 in 2002, and dropped a large number of long-haul routes, but it now has 25 A350s on order. In 2008, Delta Airlines acquired Northwest, which had a fleet of 33 747s in 2002, and operated mainly to Amsterdam, Bombay, Tokyo, Osaka, Nagoya, Beijing and elsewhere in Europe and the Asia Pacific. Since 2002 it has substituted its 747 capacity with 777s and A330s, having removed a lot of capacity from its Japanese routes and opened several new destinations in the Asia Pacific. Malaysian Airlines’ operation has grown only by a modest 9% since 2002. The capacity provided by the seven 747- 400s it has removed from operation has been replaced by 777-200s, and growth in its network provided by A330s. Among airlines that have phased out large numbers of 747-400s, JAL, SIA, Air France, EVA Air, Korean Air, ANA and Air New Zealand have added many 777- 300ERs over the same period. JAL’s 747 fleet reduction of 45 reflects the fact that Tokyo, which had been used as a trans-Pacific connection hub, has been undermined by the introduction of a large number of non-stop trans-Pacific services. The annual one-way capacity provided by JAL’s 747 fleet on its longhaul route network from Tokyo has declined by 2.9 million seats and 6,500 flights since 2002. This capacity has mainly been replaced by 767s and 777- 300s, with the airline adding 13 777- 300ERs. SIA’s operation from Singapore has reduced annual one-way seat capacity 15 I provided by 747-400s by 1.5 million. SIA has reduced its 747-400 fleet by 36, and had a net increase in long-haul capacity of about 1 million seats since 2002, achieved with a mix of A380s, 777-200s, 777-300s and A340-500s. SIA’s 747-400 fleet has almost been phased out. It has five A380s, eight 777- 300ERs, 15 A330-300s and 20 A350s on firm order. Air France, EVA Air, Korean Air, ANA and Air New Zealand have collectively retired 48 747-400s, and added 81 777-300ERs and 10 A380s to their fleets over the same period. Like JAL, ANA’s route network, which included mainly trans-Pacific operations, has been undermined by the steady growth in non-stop routes that have bypassed Japan over the past decade. ANA has therefore had no net increase in long-haul capacity, and has replaced all of its 747 capacity with 767 and 777 operations. Air France has phased out 16 747s since 2002, but has more than replaced its lost capacity with 34 777-300ERs. By the end of 2011 it was operating six A380s, and has another six due for delivery, as well as eight 777-300ERs. These aircraft would be sufficient to replace its remaining 747-400s. Korean Air has had one of the largest increases in its long-haul operations of all major airlines. Capacity has increased by more than 70% since 2002. It has reduced its 747-400 fleet by 10 to 17, but has also put four A380s and nine 777- 300ERs into service over the same period. It has another five A380s, five 747-8Is and five 777-300ERs on order, so enough aircraft to replace all of its 747-400s. If Korean continues to experience high rates of growth it will require further capacity. Smaller Korean airline Asiana has increased its long-haul operation by more than 80%. It has halved its 747-400 fleet, and replaced it with 777-300ERs. It has six A380s and 30 A350s on order, which suggests it expects to continue to experience high rates of growth.
EVA Air has only had a modest increase in capacity, but has replaced most of its 747s with 777-300ERs. It has also opened some new routes with the 777-300ER. Air New Zealand has replaced all its 747 capacity with the 777-200 and 777- 300ER. It will completely replace its 747- 400 fleet with 777-300ERs. SAA is the only airline to have completely phased out its 747 fleet and replaced it almost entirely with A340- 600s. It has maintained a similar level of capacity to 2002 by increasing service frequencies.
Small fleet reductions
British Airways (BA), KLM, Lufthansa, Air China and Qantas have made relatively small reductions in their 747 fleets since 2002; with a collective reduction of 27 aircraft. They have also added 17 A380s, 24 A340-600s and 12 777-300ERs over the same period, indicating a strong development in their long-haul operations. BA, with the world’s largest 747-400 fleet since 2002, has added four 777- 300ERs, with another two on order. It also has 12 A380s on order. BA operates to about 20 long-haul destinations from London at two or three daily frequencies with either 747s or a mix of 747s and 777s. This makes it one of the world’s few international carriers to operate at high frequencies on a large number of long-haul routes. BA has also increased its long-haul capacity by about 30% since 2002, and is therefore more likely to replace most of its 747-400s with larger types, than smaller aircraft such as the 777-300ER. KLM has had a net increase of 1.5 million seats, virtually all provided by 777-300ERs. It has phased out six 747s, and most of its remaining fleet are 280- seat, Combi-configured aircraft. KLM has replaced a lot of 747 capacity with 777- 200ERs and 777-300ERs configured with larger seat counts of 327 and 425.
Lufthansa has had a small reduction in its 747 fleet, but has had a large overall rise in the size of its long-haul operation, as a result of increasing its flights at Frankfurt and Munich. It has used A340- 600s and A330-300s to provide this capacity growth. It still has 30 747-400s in operation but has nine A380s, 20 747- 8Is, and four A330-300s on order. Air China, with its main operation based at Beijing, has had a small reduction in its 747-400 fleet of six aircraft. The capacity of its long-haul operation has trebled since 2002, and most capacity is now provided by A330/340s and 777s. Qantas is the only major 747 operator to have used just the A380 as a large widebody to replace capacity provided by 747s. Qantas has also used the A330-300 to provide additional capacity, and its overall long-haul operation has grown. It still operates 26 747-400s, and has nine A380s on order.
747 fleet additions
Airlines that have had no 747 fleet reduction or even an increase are Virgin Atlantic, Thai International, China Airlines and Cathay Pacific. These four carriers have collectively had a 747 fleet increase of four units. Virgin, Thai and Cathay have also had increases in longhaul network seat capacity since 2002. Cathay Pacific has seen seat capacities from Hong Kong grow by more than 100%, using a mix of A330s, 777-200s and 777-300s. Its 747 operation has also seen a small growth. It still operates 21 747-400s, but it has 26 777-300ERs and 30 A350s on order, which will be used partly to replace the 747-400 fleet. Thai International has increased its
Most 747-400 operators have selected the 777-300ER to supplement or replace their 747-400 fleets. The 777-300ER has been configured with a 10-abreast economy cabin, which means its seat capacity can come close to the 747-400’s. long-haul operation by 64% since 2002. It has seen large capacity increases on most of its routes, and has also opened six new destinations. Thai has increased its 747-400 fleet to 18, by acquiring some from United. It has a large number of aircraft on order, including six A380s, 14 777-300ERs, and 10 A350s. Virgin Atlantic has had a modest increase in its long-haul operation since 2002, and has used the A340-600 mainly to replace the smaller -300s. It also has six A380s on order (although it has delayed taking delivery of these) and five A330-300s.
Non 747 operators
Four major airlines that are now major international operators, but have never utilised the 747, are China Eastern, Emirates, Etihad and Qatar Airways. Since 2002, China Eastern has more than trebled the size of its operation from Shanghai Pudong, and has opened routes to Rome, Frankfurt, London, Honolulu, New York, Los Angeles, Vancouver and Melbourne. China Eastern has built up its long-haul operation entirely with A330s and A340s, the A340-600 being its most numerous type. In terms of annual seat capacity, China Eastern’s international operation has increased by a factor of about three. The airline operated just three long-haul routes from Pudong in 2002, and has since opened new routes to Rome, Frankfurt, London, Moscow, New York, Vancouver and Melbourne. Emirates now has the largest longhaul operation in the world, with oneway seat capacity exceeding 6 million, compared to less than a million in 2002. In addition to A330s and 777-200s, Emirates has added 18 A380s and 61 777-300ERs to its fleet since 2002. It will continue to grow, and has a large number of A350s, 777-300ERs and A380s on order. Emirates, which operates a long-haul connecting operation at its Dubai hub, can only offer service frequencies of one flight per day, or less than even seven per week on many of its routes. Etihad has grown at a similar rate, and its long-haul operation is about a third the size of Emirates’. Etihad has added 777-300ERs and A340-600s since 2002. Qatar Airways has also seen a fast rate of development of its long-haul operation, and has also added A340-600s and 777-300ERs. It has A380s on order.
Capacity & demand
Many of the major 747-400 operators have swapped some or all of their 747- 400 capacity with smaller types on a large number of their routes. The A380 has been used on services where an airline experiences a high level of demand, but the increase in capacity that results is then offset by downsizing from a 747 to a smaller type on the other services during the day. The change by SIA from three daily services with a 747 to two per day with an A380 and one per day with a 777-300ER on its Singapore-London service is an example. This pattern has been repeated on a large number of longhaul routes operated by the world’s major 747-400 operators since 2002. The change either to smaller types or to the larger A380 raises the issue of what strategies airlines are following to match seat supply more closely to passenger demand. There is also the 747- 8I, sized halfway between the 747-400 and A380. Major 747-400 operators still use it to provide most of the long-haul capacity on their networks. The 747-400 is ageing, however, and there are still another 290 777-300ERs and 186 A380s on order. The passenger-configured 747-8I could be used to provide the right levels of supply, but few airlines have ordered it, perhaps because it has, or is perceived to have, poorer operating economics than the A380. Are the 747-8I’s technological standards such that its operating performance, fuel burn and maintenance cost will result in a seat-mile cost that is competitive with the A380? Is the 747-8I maligned, or is it the wrong size to meet most airlines’ requirements?
Aircraft characteristics
The prime contenders in the large and ultra-large category are the A380, 747-8I and 777-300ER. The A340-600 would have been considered at one stage, but has not received a firm order since 2008. The 350-seat (Airbus standard tri-class) A350-1000 series has, however, won orders from several major 747-400 operators, including Asiana, Emirates, Etihad and Qatar Airways. Airlines that have experienced, or are due to gain from, continuous growth on their current routes may use larger types while maintaining frequencies, or increase services to a level that may be more attractive to business passengers. Emirates, in particular, cannot increase frequencies to much more than a daily service on most of its long-haul routes. Sustained traffic growth has thus fuelled its demand for a large number of A380s. Airlines that have experienced only low rates of growth or none at all, and that have downsized their operations and capacity, clearly need to rationalise their fleets. For example, the 747-400 is too large to meet JAL’s needs. The 777- 300ER is the largest it needs. Air New Zealand will swap its entire 747-400 fleet for 777-300ERs, and SAA has similarly wholly replaced its 747s with A340-600s. A third approach to gauging aircraft requirements is illustrated by Qantas. It has segregated low-yield traffic into its low-cost subsidiary Jetstar on its Asia Pacific routes. Aircraft gauge has therefore become less important. Overall, the issue of aircraft gauge is Qantas has maintained most of its 747-400 fleet, and replaced a small number with the A380. The A380 is utilised in its busiest routes. The airline also has a low-cost subsidiary Jetstar, which it uses to carry low yield traffic on routes in the Asia Pacific.