Fiordland

Reading between the lines it sounds like AC is finding the 330 to be very cost effective on the shorter routes between eastern/central Canada and Europe. At the same time the 787 and 777 are finding their way onto longer duration flights to Asia and Australia. I would be hard pressed to translate that into a blanked statement that the 330 is better or worse than 787. Instead I think it comes down to a certain fuel price, stage length and aircraft price one is better than the other, do some minnor change of any of those numbers and the results can be different.

Adam Smith

I'm not sure why you're fixated on this point. Deferred production costs have already been spent and don't have anything to do with Boeing's cost to manufacture the airplane today or how they can price the plane because the costs are sunk. If Boeing has to reduce the pricing of the plane in the future, it may lead to a writeoff of some of the deferred production costs, but that's a non-cash charge because Boeing has already spent the money. (By the way, Boeing has amortized $3.3 billion of 787 deferred production costs in the past seven quarters and the balance is now down to $25.4 billion).

It's really just an accounting question of whether you show losses (or smaller profits) in the early years of building a plane when your unit costs are high, then much higher profits later in the life cycle as your production costs come down (this would be unit cost accounting) or you capitalize a portion of the production cost in the early years, which results in lower costs (and higher profits) early on and vice versa later on (program accounting, which is what Boeing uses). Neither approach is inherently wrong. Program accounting is more subjective, but Boeing's assumptions are clearly disclosed and it's easy for the market to pick them apart.

There's already plenty of skepticism in the market as to whether Boeing can ever fully recover the 787 deferred production costs, so a write-off of some of those costs is likely already baked in to market expectations.

But this really doesn't matter to an airline buying the plane. All they care about is what Boeing will charge them for the aircraft today. If Boeing says to AC "we'll sell you X 789s for $Y for rouge" and the economics of that deal are better than what AC can get for used 763s, used 333s or new 339s, AC will buy 789s. Likewise, if one of the other options presents better economics, AC will do that instead of ordering 789s. They won't care what deferred production costs Boeing has or doesn't have.

AC has recently decided that it would be cost-effective to purchase 4 more used 333s for mainline rather than purchase new 789s, so at least in this case, the 333 offered the better solution.

If the operating costs of the 339 were so close to the 787's, it's likely that the cheaper capital costs would have resulted in a lot more sales.

This is probably the most accurate statement on the matter.

marke190

Where does the 77L fit into all of this? It seems like a bit of an odd-ball aircraft as the 789 seats the same albeit less J, and has the range for the current 77L routes. If not doing ULH routes like DL does with ATL-JNB, wouldn't it be more economical to buy a mix of 789s and 333s to replace it.

karachi

If they want gently used A330's, its one thing. if they want something better - go for the A350. I flew Ethiopian's A350-900 last week and it was great. AC's 4 abreast J class would fit in there nicely.

cedric

The costs of used A333 allow that aircraft to have better economics than new 787 frames on short haul flights to Europe. They'll have fleet commonality with the frames already in the fleet, and an attractive lease rate which allows for those economics.
The A350 removes both of those advantages.

Fiordland

They have them. Given very few of them were produced I suspect airlines generally were not overly impressed or they work well with very only in very specific routes. If AC can sell them off and use that money to buy 789 is an open question..

In comparison to the 789 I thought they could take more cargo. The 77L have the same seat count but a higher percentage of business class. So you would expect they use them on premium heavy flights. .

Sebring

You can fly a 77L for 12 hours with a full passenger load and 40-plus tonnes of the right fitting cargo. It is a superior cargo plane, and cargo yields out of Australia or Japan are usually better than China or Hong Kong yields.

marke190

It just seems like a bit of a waste sending these aircraft TATL on 7-9 hour hops to Europe. For such a specialized aircraft, it is really only used to its potential on a handful of TPAC missions.
My guess is that AC will hold on to them for a while as they wouldn't be in high demand on the resale market. Whether Airbus or Boeing will offer to buy them in exchange for a 330neo/789 order is another question!

WildcatYXU

Well, you basically wrote what I did. The 787 is a very capable long haul aircraft and very economical when used as such. But it's not the end of all other planes (Boeing fan rhetoric from 13 years ago) and there are mission profiles where other aircraft are better.

WildcatYXU

It is that close on missions under 4000 nm. BTW, this is not my opinion bu rather Scott Hamilton's from Leeham News. So if somebody needs a more capable aircraft, has to go to larger A350, or shop elsewhere.

As far as the rest of your post is concerned, I'm aware of the facts you've posted. That said, I'm certain this is not what Boeing anticipated when they launched the program.

flybit

seems your information was wrong. lol HA will dump the 330 and get more 787's, clearly they think its a better plane for what they want to fly.

Adam Smith

I hadn't listened to or read the transcript of the Q4 earnings call, but had a look this morning and AC confirmed on the call the extra 333s will be leased.

No one cares what Boeing said when they launched the program and no one but you is talking about it.

The statement was misguided in its definitiveness, but was not totally wrong. As I said upthread:

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The Lev

Hawaiian and Boeing have progressed to the point of a non-binding letter of intent: https://newsroom.hawaiianairlines.co...airlines-fleet

Hawaiian wants the aircraft to be able to fly Hawaii to Europe in addition to Hawaii - mainland. The current generation 330's can't manage Hawaii - Europe and Hawaiian has decided they don't want a mixed fleet. AC is looking to use the 330's on ~4,000 mile missions - something for which a low-priced used 330 is ideally suited.

flybit

Anything low priced is ideally suited to AC.
Reality AC has to decide what to do with a fleet of Rouge 767's at the end of there lives, and 8 end of life A330's. I expect a lot of the 767 missions AC/Rude flys can be replaced with 737's with more frequency, and any decision involving expensive airplanes can be "punted" till Calin resigns.

Stranger

So far so good.

Nowhere near end of life. These are still fairly new in comparison.