rouge killer? The new CP?
#1
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rouge killer? The new CP?
Combining thoughts from various threads and posts...
AC has had it pretty good for quite a while, regarding competition.
Now Westjet is taking delivery of very very cheap 767's (20+ years old) at $8-12 million each, no doubt leased. This is while AC is taking delivery of brand new Dreamliners which biggest advantage is fuel consumption. With oil at such low prices, presumably for a while, I would imagine WJ has a substantial cost advantage over AC and ACr.
Westjet has announced a handful of LGW routes has stated it is looking at Asia.
With rouge limited to 50 planes, Westjet could begin eating in to AC's lunch.
Imagine if Westjet put on YVRSYD?!
AC has had it pretty good for quite a while, regarding competition.
Now Westjet is taking delivery of very very cheap 767's (20+ years old) at $8-12 million each, no doubt leased. This is while AC is taking delivery of brand new Dreamliners which biggest advantage is fuel consumption. With oil at such low prices, presumably for a while, I would imagine WJ has a substantial cost advantage over AC and ACr.
Westjet has announced a handful of LGW routes has stated it is looking at Asia.
With rouge limited to 50 planes, Westjet could begin eating in to AC's lunch.
Imagine if Westjet put on YVRSYD?!
#2
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Only some 767s can do that range - anyone know exact planes WS is getting? (ugh, 20+ years old?!)
Also recall that the 787s were so delayed that AC has at least some cost reduction there - they're not paying full price I don't think.
But your overall point is sound - WS can squeeze just like Porter, tackling routes that were previously "safe" from a revenue perspective.
Also recall that the 787s were so delayed that AC has at least some cost reduction there - they're not paying full price I don't think.
But your overall point is sound - WS can squeeze just like Porter, tackling routes that were previously "safe" from a revenue perspective.
Last edited by c_9; Sep 18, 2015 at 11:37 am Reason: typo
#4
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Remember AC used to do this with 767 - requires a refueling stop in HNL.
Personally you couldn't pay me enough to go back to doing that vs. non-stop.
Maybe flying empty. Range of 767 is just over 5,000 miles with a reasonable load. YVR-SYD is 7,750 miles.
Personally you couldn't pay me enough to go back to doing that vs. non-stop.
Maybe flying empty. Range of 767 is just over 5,000 miles with a reasonable load. YVR-SYD is 7,750 miles.
Last edited by The Lev; Sep 18, 2015 at 11:29 am
#5
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Dorian, I'm confused. WS is taking delivery of 767-300ERs. Rouge flies 767-300ERs, so no savings there on plane cost/fuel burn. If it wants to match like-for-like, AC can just throw Rouge 763s up against WS, like it's doing on YYC-LGW.
Fuel is the biggest single expense for airlines, even with lower oil prices. It's a much larger expense than aircraft rent/depreciation.
So it's quite possible that a 787 is competitive with a 767 because the higher purchase price (which will be amortised over many years of remaining life, whereas the 767s don't have much left in them) will be offset by lower fuel burn.
I would also guess that the maintenance expense starts to pile up on these old 767s as things just start to wear out and fall apart.
So I don't necessarily see WS having much of a cost advantage over AC just because of old, cheap 763s.
Also, for what it's worth, the 763 doesn't have the range to do YVR-SYD without a stop (roughly: YVR-SYD 12,500 km, 763 range 11,000 km).
Fuel is the biggest single expense for airlines, even with lower oil prices. It's a much larger expense than aircraft rent/depreciation.
So it's quite possible that a 787 is competitive with a 767 because the higher purchase price (which will be amortised over many years of remaining life, whereas the 767s don't have much left in them) will be offset by lower fuel burn.
I would also guess that the maintenance expense starts to pile up on these old 767s as things just start to wear out and fall apart.
So I don't necessarily see WS having much of a cost advantage over AC just because of old, cheap 763s.
Also, for what it's worth, the 763 doesn't have the range to do YVR-SYD without a stop (roughly: YVR-SYD 12,500 km, 763 range 11,000 km).
#6
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#7
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Dorian, I'm confused. WS is taking delivery of 767-300ERs. Rouge flies 767-300ERs, so no savings there on plane cost/fuel burn. If it wants to match like-for-like, AC can just throw Rouge 763s up against WS, like it's doing on YYC-LGW.
Fuel is the biggest single expense for airlines, even with lower oil prices. It's a much larger expense than aircraft rent/depreciation.
So it's quite possible that a 787 is competitive with a 767 because the higher purchase price (which will be amortised over many years of remaining life, whereas the 767s don't have much left in them) will be offset by lower fuel burn.
I would also guess that the maintenance expense starts to pile up on these old 767s as things just start to wear out and fall apart.
So I don't necessarily see WS having much of a cost advantage over AC just because of old, cheap 763s.
Also, for what it's worth, the 763 doesn't have the range to do YVR-SYD without a stop (roughly: YVR-SYD 12,500 km, 763 range 11,000 km).
Fuel is the biggest single expense for airlines, even with lower oil prices. It's a much larger expense than aircraft rent/depreciation.
So it's quite possible that a 787 is competitive with a 767 because the higher purchase price (which will be amortised over many years of remaining life, whereas the 767s don't have much left in them) will be offset by lower fuel burn.
I would also guess that the maintenance expense starts to pile up on these old 767s as things just start to wear out and fall apart.
So I don't necessarily see WS having much of a cost advantage over AC just because of old, cheap 763s.
Also, for what it's worth, the 763 doesn't have the range to do YVR-SYD without a stop (roughly: YVR-SYD 12,500 km, 763 range 11,000 km).
With the ACr 50 plane limit AC would need to begin sacrificing their short/medium routes to go up against a bunch of Westjet long haul routes.
#8
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GCmap.com shows 7757 miles: http://www.gcmap.com/mapui?P=yvr-syd
Wikipedia shows range as 4430-7260 miles: https://en.wikipedia.org/wiki/Boeing_767#Specifications
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I should correct my earlier typo that I of course meant AC flying YYZ-LGW, not YYC-LGW. If only we had sensible airport codes in this country...
But how quickly do you think WS will realistically expand? It has taken them 20 years to get to the point of trying out widebodies on long-haul, and they're really only dipping their toes in at this point.
If this expansion goes well - which it may not, for a lot of reasons - I could see WS expanding it, but I expect we're looking at a couple of years, at least, before they would do that.
If this expansion goes well - which it may not, for a lot of reasons - I could see WS expanding it, but I expect we're looking at a couple of years, at least, before they would do that.
Last edited by Adam Smith; Sep 18, 2015 at 11:49 am
#10
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But how quickly do you think WS will realistically expand? It has taken them 20 years to get to the point of trying out widebodies on long-haul, and they're really only dipping their toes in at this point.
If this expansion goes well - which it may not, for a lot of reasons - I could see WS expanding it, but I expect we're looking at a couple of years, at least, before they would do that.
If this expansion goes well - which it may not, for a lot of reasons - I could see WS expanding it, but I expect we're looking at a couple of years, at least, before they would do that.
#11
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Not to detract from Dorian's point of this thread, but I was on AC's sad, 25+ year-old 763s to LAX. One particular fin was original CP, then to RG for 9 years, then to AC. It had OH bins that were the old style and even undersize bags did not fit.
As I wrote in another thread, on a different flight, none of us in the full J cabin were amused by the lack of water in the front lavs. Wipes in the sink.
I forgot to take photos of the interesting tape holding together parts of the rear-lavs.
While I am quite sure these pieces of equipment are certified to fly and are absolutely safe, they are not a pleasant experience.
So, what were you saying about the other guy's 20+ year-old 763s?
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If WestJet uses one of the 767's for YYZ-BGI I know a lot of the regular passengers will be switching over because of the way AC has handled the rouging of that route not once but twice... depending on pricing and pitch of course.
#13
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Just to chime in on the whole fuel thing; Have you guys noticed that the oil companies have clued in to the whole "If we are loosing money on crude lets make up for it by maintain high prices on the refined stuff"
I am curious if the same is holding thru for jet fuel.
At today's crude prices the price of gas (in AB anyways) should be around 60c/L... last I checked it was still low 90s.
I am curious if the same is holding thru for jet fuel.
At today's crude prices the price of gas (in AB anyways) should be around 60c/L... last I checked it was still low 90s.
#14
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Crappy Y Westjet vs crappy Y ACr ??? Neither works for me
Can you say AC mainline via YUL?
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Just to chime in on the whole fuel thing; Have you guys noticed that the oil companies have clued in to the whole "If we are loosing money on crude lets make up for it by maintain high prices on the refined stuff"
I am curious if the same is holding thru for jet fuel.
At today's crude prices the price of gas (in AB anyways) should be around 60c/L... last I checked it was still low 90s.
I am curious if the same is holding thru for jet fuel.
At today's crude prices the price of gas (in AB anyways) should be around 60c/L... last I checked it was still low 90s.
Also remember that the drop in the Canadian dollar has reduced the size of the decrease in oil prices when measured in CAD.
As for jet fuel, it has tracked WTI prices pretty closely over the past year. Although that's comparing an index jet fuel price and I imagine that the price the airlines pay at the airport is slightly stickier, just like retail gasoline.