Originally Posted by ClipperDelta
I'm sure DL would like to see an expedited conversion (i.e., the 777s skip the current BE upgrade and go directly to the flat-beds) as well but I wonder how much the creditors may have had something to say about stretching those capital expenditures out. Don't forget that DL still has to complete the domestic long-haul overhaul (fitting PTVs on the 757/738/763) which costs, IIRC, around US$1 million per aircraft, throughout 2007, complete refurbishment of the 763 international fleet, conversion of some 764ERs to BE, etc.
No doubt there is a lot on the plate. However, taking a year to reconfigure 8 planes seems ill-advised from a marketing standpoint to me.
And if you do some math, and assume that by enhancing the product so much you'll gain one --
just one -- new full fare customer on every 777 route each day, and you operate 5 long haul 777 routes (ATL-TLV, ATL-DXB, JFK-BOM, ATL-NRT, ATL-ICN) each day, and the average full fare J roundtrip on those routes is $8,000, then 5 routes X $8,000 per route per day X 365 days is over $14 Million a year in new revenue.
So, in effect, if the new product is good enough to snare one incremental sold seat increase over what you would get otherwise, you almost pay for the changeover in one year.
And that's not to mention how many people are driven to your airline to make PM and get the upgrades, which is incalculable.