channa

Which may have made sense a decade ago in the era of $200 transcons, but that's no longer the case.

DL has said that domestic is profitable and high growth in the current environment. With their financial results, there's no reason not to believe them.

LarkSFO

To Asia, where exactly will you take AA?

If your company will pay for, or you can afford C (or F) on an International airline, and you aren't beholden to a legacy USA (DL, AA, UA) airlines FF/Elite program, why wouldn't you take the foreign option?

If you are stuck in E, do you think the foreign options are much different (better) than UA?

jasondc

but i was just on the A319 and A320 with the slimline. I preferred it to the AA 738 and the DL 739 i flew on recently. Or rather, I didn't see it as remarkably inferior.
Soon i'm sure you'll enjoy the quality of the DL 739s and the stuffed 757s (fewer F class seats) as those 767s are retired.
To each their own I suppose.

entropy

And CO was playing games with its revenue allocation as well, preferentially allocating revenue to the int'l segments. it helped them tell their story on the street which was they were going international big time and that was a big differentiator.

spin88

The Delta strategy only works for owned aircraft. If a plane is leased, then it is not suitable to be parked. If you are paying for the plane, then you want to get as many cycles out of it as possible to cover the cost. But if you own it, and its depreciated, then the issue is when you have very expensive maintenance (D checks) which may make the plane be retired. So for example, if a 763 has 4000 cycles till its next D check, you can fly it 3 flights a day every day year round and scrap it in 4 years, or you can fly it for half that amount, using it at peak times, and then scrap it in 8 years. But you have to own the thing for this option to make sense.

I don't know Delta's fleet as well as I'm sure some do, but its a mix of some leased, but mostly owned planes: http://www.delta.com/content/www/en_...aft-fleet.html

My understanding is that Delta is returning planes to lessors as they come off lease, but they are not selling old planes (absent a D check issue). So yes, the delta domestic 763 fleet will shrink (and has shrunk some) ditto the 757 fleet and the MD-88 fleet, but Delta has no plans currently to retire them completely.

United's ownership vs. Lease if found on page 22 of its annual report, and far more of its fleet is leased than is DL's. Of the 763s, 19 are owned, 16 are leased. Of the 752s 49 are owned, 61 are leased. Of the A320s 51 are owned, 46 are leased, and of the A319s 41 are owned, 14 are leased.

I expect that United will return all of these aircraft types as they come off lease, unless they get a screaming deal, and replace them with the new deliveries of 739ER and 787s. [ And the same with the 8 leased 747s and 17 leased 772ERs, replaced with A350/787-9/10s]. This makes perfect sense.

The real question is what will United do with the older aircraft it owns? Unlike DL (which I think is keeping what it owns) my understanding is that United's deal with FED EX was to sell 757s it owned.

Next year, United is slated to give up 3 763s. I think all are leased (I can be corrected if I'm wrong). The announced plans are to get rid of ALL 757/767s in the next few years, except the 2 class 763 and the PS/International 752s. That will have to change if United wants to do a Delta like "swing" strategy as all of the "swing" airplanes are currently slated to be sold off.

No one is talking about buying new wide-bodies to use domestically (the go to new aircraft for that heavy lift mission appears to now be the A321). And no one is saying (and no airline is flying) an airline should use A330s (American carriers don't have the first generation ones that could be used this way) or 777ERs on domestic legs, other than positioning flights.

The issues is instead if it makes more sense to pay the CAP-x or lease payments for two new planes (737 or A320/321) + two crews (four pilots), plus use two sets of GAs/Jet Bridges, and use two departure/landing slots vs. Using a 767 in a domestic configuration, or an older 777 (non-ER) in a domestic configuration.

The figures you are using for fuel burn are not applicable as its for a widebody at MTOW, and I think that the advantage on a per seat basis for a totally modern narrow-body in fuel burn is much narrower when the older widebody is not fully fueled (in fact probably has only 40% of the fuel it would carry at MTOW) which is the apples to apples comparison.

The 737ER has a MTOW of 187K/lb, and holds 7800g of fuel (with auxiliary tanks), with a range of 3235 nmi. [fuel would be 28% of the planes MTOW]

The 763ER has a MTOW of 408,000 and holds 23,000g of fuel, with a range of 5990 nmi. [Fuel would be 38% of the planes MTOW]. But Assuming you only carried half that fuel, with jet fuel at 6.8lb/g, just carrying only half the fuel shaves 88,400 lbs off the planes weight. Since you are not carrying that extra 88,400 lbs of weight (unless you filled the thing with cargo, think Hawaii) the fuel savings (and resulting weight savings) are even greater, hence my 40% guesstimate for fuel load on a transcon/hawaii flight.

On Trancon or Hawaii flights, the weight difference per seat is not infact that great between the planes [If I take away half the fuel weight its 1183 lbs/passenger for the 763, 1038 lbs/passenger for the 739ER; with 270/180 as the configurations]. Someone with more technical information can give a better estimate (I can't find any) but I would be very surprised if the difference in fuel burn per seat were more than 15% and it might be less (its is most certainly not 3-3.5x!). That more than swamps the other (particularly cap-x/lease) costs of running two aircraft. This is why AA, DL, and PMUA all ran domestic wide-bodies where they have the load to fill them, which they did with hubs in bigger cities/regions.

And I note that when the CO management took over, and moved the sUA wide-bodies to international configuration, they did not say they planes were not making money, they said they could make MORE money if deployed internationally. What CO did was take an efficient use of aircraft and put them overseas, at a time when domestic margins were climbing and international margins were getting tighter. This is part of why DL (and AA/US) is blowing the doors off UAL, Delta has improved and expanded its domestic market share, while United has cut its domestic share and degraded its product.

p.s. The figures above are back of the envelope guesstimates, and since it is not my area, I would be pleased as punch if someone shows me I'm looking at things in the wrong way

shttrdrvr

Spin,

You would have been a great flight engineer. You'd be jobless for about 15 years, but would have been fuel burn guesser several months in a row

EWR764

Without addressing all of your points, many of which are on the money, the rough fuel burn figures I cite are absolute, so even at a reduced takeoff weight, there is not such a dramatic fuel burn spread. On a short haul, the widebody is still going to burn substantially more on a per-seat basis, because even at the most economical phase of flight, low-gross-weight cruise (on a short haul), there simply is not enough flying over which to amortize the fuel burn so as to create a material fuel burn advantage for WB operation.

The 2-3.5x hourly fuel burn multiples are rough estimates on a per-aircraft basis, not per-seat , and blended based on phase of flight (e.g., taxi/takeoff/climb/longhaul cruise/descent/approach/landing).

Using publicly-available Boeing performance planning figures, a derated 777-200ER with 300 seats will burn roughly 65,000 pounds of fuel on a 2000nmi sector, whereas a 737-900ER with 180 seats will burn somewhere around 28,000 pounds of fuel. Even assuming 737-900ER performance at the low end of the curve (high gross weight, hot/high conditions, no winglets, etc.), and better performance out of the 777, there is still a large gap in fuel efficiency between 2x 739ER and 1x 777 for the purposes of moving 300-350 pax on a ~2000nm sector.

As I mentioned, the empirical evidence suggests that such flying is not nearly as profitable as you posit, given Delta's strategy to reduce its high-density domestic WB operations in favor of large narrowbodies on increased frequency.

channa

That's great information, but you're looking only at the cost at the pump, not the car payment.

I wouldn't read into the economics of the flying based on DL's reduction in said domestic widebodies. It may be more a function of the aircraft nearing the end of its life.

If DL could get widebodies on the cheap for use domestically, that might change the economics dramatically.

halls120

The only advantage UA has over its foreign competition riding in back is E+. In every other respect, UA doesn't do well in comparison.

If I'm flying TPAC and I can't upgrade or get an aisle seat in E+, I'm flying ANA, Singapore, Cathay, or Korean. It isn't even close.

LarkSFO

Isn't this like saying 'If you take away the one thing that UA has a strong advantage in (E+, which is not being taken away), then I would not fly UA.'

I mean, it makes sense, but this is the exact reason why (especially as an elite, but even if I had to buy E+) I would fly UA. Everything else is a distant second place and below after E+ / personal space.

Imstevek

as a 1k, how often do you fly TPAC and not get E+ aisle on UA? My travel is usually booked < 1 week ahead and I can think of maybe 1 out of 30 TPAC legs where I wasn't UG or E+ aisle.

personally, UA steerage isn't different than the others. I've taken BR and SQ red-eyes home to shorten trips, always in the back, and it's been an horrid experience each time.

spin88

working with your figures, a 739ER lists for $99M, and the cheapest anyone is reputed to have gotten them for was $43M to DL in 2011. The usual prices quoted are $55-60M each. Assuming that, the cost of the airplane would be on the conservative side something like $7M/year. Assuming you fly it every single day, 6000 mn a day (which is very high) the plane costs you $6392/fight. That is $35/passenger for the airplane on that flight.

So what is the fuel difference? In the new Hawaii config, the 777 seats 348 which would be 27.5g of fuel/passenger. (65k/6.8/348). The new "slimmed" high density 739ER on UA seats 179. It would use 23g of fuel/passenger.

That extra 4.5 g of av fuel would cost United (at last months prices) $13.725.

So the trade off is (and the actual figure I expect is far higher, I am assuming a very high 6000nm of flying in a day for the plane every day and my $7M figure may be low) $35/passenger in expanses for the plane vs. an extra $13.725 in fuel savings.

Not even considering the costs of two crews (really just two extra pilots, the FAs are in relation to number of customers), two gate crews, two landing slots/gate use, etc, the 772 is going to be likely cheaper to fly if its already depreciated.

On the DL point, as I noted above, I don't think that Delta is pulling its OWNED 763 domestic birds, it is simply returning 763s as they come off lease or need D checks. I think that has nothing to do with the operating cost issues we are discussing.

p.s. I might add that this math shows the need to get as many hours of use out of very expensive new planes as possible. It is what has driven UAL to unrealistic scheduled with little down time, and a sub 80% OT percentage. Since the part of DL's fleet which is older and owned need to be used so heavily, more downtime is built in, which is why their OP is usually around 85%

At this point everyone has E+ (and the DL version is better than the UAfkaCO version). And VX's version (with 38" of pitch and free food/IFE/drinks) is far better.

The "UA is great, it has E+, doesn't need anything else" drum has been beaten to death.

fly18725

You're off on the price, and are failing to consider the significantly lower maintenance costs and higher reliability of a 737 in your analysis. All together, a 737 or A320 will beat the used widebody on an operating cost basis within the U.S. everyday.

EWR764

Of course, but that is just one variable in a highly complex equation. Crew costs, acquisition costs and opportunity cost are other metrics which tend to favor the deployment of narrow-gauge aircraft on shorter sectors, and why I strongly disagree with the notion that UA's unit cost and capacity issues on the domestic side is tied to their redeployment of widebody lift to the international sector, and why reversing same is a strategy that clearly runs counter to industry-wide trends and momentum.

Again, this is only the fuel side of her equation which I have addressed, not the myriad other operating cost disadvantages running widebody aircraft on short segments confers. For example, we could go on at length regarding the opportunity cost aspect, whereby WB aircraft on shorter, low yield domestic operations occupy significantly more resources than narrowbodies which could otherwise be deployed on higher-yield missions. We could also discuss how much more costly heavy maintenance cycles are for large aircraft, or how certain parts age much more rapidly in a high-cycle operation.

Finally, you make a major assumption that the WB aircraft is fully depreciated, while the NB is presumably fully leveraged. A simple review of the UA fleet subject to EETC financing reveals that the story is not so clearly defined.

The bottom line is that the industry shows very little evidence that this strategy, while certainly preferable to passengers, is generally a better move in terms of operating economics.

LarkSFO

You have missed the point completely.

The discussion was UA internationally in Y vs. International carriers in Y (not DL or AA).

If you want to have a domestic / legacy discussion about E+ / MCE / EC (why include VX I have no idea), that would be a separate topic.