dfwmusicman

I bet they'd be perfect for all those LIT-NRT routes!

MiamiAirport Formerly NY George

The JFK/MIA/Caribbean and Latin America routes are certainly high density. Load factors on those routes are typically 90%+ on any day, any week, any time of the year (of course the cheap fares allow for that) and distance wise the destinations are relatively close. There is also a somewhat fair amount of paid premium paxs on these routes and these routes are often transporting more profitable connections into MIA. Assuming the 787s can haul the cargo that the A300s can, the 787-3 would appear ideal for those routes.

The cargo makes the flight profitable with the cheap fares and few premiums being icing on the cake.

eamus

PresRDC, as you actually know what you are talking about, would you please elaborate a bit? TIA:

I have no idea what a PDP requirement is.

Does this mean that they will try and essentially play the engine manufacturers off against each other and pay for the engines with long-term maintenance contracts rather than up front purchase price?

PresRDC

PDP means "Pre-Delivery Payments." These are typically required by airframers for meeting certain milestones in the manufacture of a given air frame. Assuming that the AA/Boeing contract requires PDP, AA may need to finance these payments.

Engine manufacturers end-up paying the airline to take their engines. The engine manufacturer sells the engines to the airframer who then adds them to the purchase price of the airplane. The engine manufacturer then cuts a check to the airline for a pre-determined percentage of the engine's price. These days it is between 70-80% of the engine price (in the mid 1990s, when the 777 was first being delivered, market was north of 100%). The airline can then use this cash to pay for part of the airplane or satisfy other debts. The engine manufacturer makes this credit up on selling parts and services (parts margins are high -- north of 60%), but it takes years to recoup the upfront expense.

Sommerfeld

Sounds like an odd arrangement. (What do they call the payment from the engine manufacturer? "kickback" or "bribe"? :-) )

What's the typical ratio between engine price & airframe price at this end of the market?

kappa

Hasn't AA already announced that all of the AB6 will be off the property by a the end of 2009 or thereabouts?

PresRDC, RR and GE are mentioned above. Does PW have "dog in the fight" for the 787s? And specifically, the AA 787s?

PresRDC

Don't know about the 787, but a 777 engine is north of $20m.

PresRDC

Nope, Pratt (or more accurately UTC) decided that the business case for the 787 just wasn't there. There is more money to be made in the single aisle market (more airplanes and more cycles = more spare parts). Pratt's newest engine is currently flying on Airbus' A340-600 flying test bed and will be exclusive power plant on the Mitsubishi regional jet (70-90 seats) and the Bombardier C-Series (90-110 seats), which are scheduled to enter into service in 2013.

N830MH

Let's speculations begin for which potential new routes on 787-9 is:

ORD-BOM
ORD-HKG
ORD-SIN
ORD-BKK
DFW-SYD
DFW-HKG
DFW-TLV
DFW-AKL
DFW-NAN
ORD-DXB
ORD-AMM
ORD-CAI
MIA-JNB
MIA-TLV
MIA-DXB
MIA-CPT
MIA-NBO
MIA-HNL (never started service to Hawaii before)
HNL-SJU
MIA-AUH
MIA/ORD/JFK-KWI

Let's try for which specific routes will be on first routes on 787-9. Thanks all.

Regards

aafreqflyer

i knew this was coming...

thats great... we can atleast see some new aa equipment in the air.

eamus

Thanks PresRDC, always useful. I have worked on several aircraft refinancings and collapsed more than a few leveraged leases of aircraft, but never had this level of knowledge (other than a general sense that engine manufacturers make their money on the servicing rather than outright sales price).

riteshraja

Anything non-stop to BOM from US on OW would be a welcome addition.

ContinentalFan

That's great news. AA is the equivalent of a key account with Boeing, so I wonder will that mean they'll get first or at least a highly prioritized ranking when it comes to delivering these new beauties!

chanp

Hi hope there are some SYD and asia routes with this plane. The 747-8 look s nice as well

WRCSolberg

Yes. Previously Boeing stated it didn't have any delivery slots available until 2014. Now AA magically places a order with deliveries starting in 2012. That being said, it's evident AA withholds delivery positions for certain customers.