Any "Latest & Greatest" about Delta?
02-25-2013, 04:30 AM
Gets Weekends Off
Joined APC: Feb 2008
Posts: 19,412
Here's a thought about 10 new 77Ws vs 11 used 744s rumor, I've got some numbers to play with thanks to the fact these are very popular jets and people love to post data on them.
1. Say the 77W costs nearly list price, $300M, and the used 744s cost $40M each. We're looking at $3,000M for new 77Ws and $440M for 744s. A net difference of $2,560M.
3. Thus, add everything up and with 100% LF and 100% full cargo 100% of the time on 270 round trips per jet per year between ATL-NRT and the 744 fleet makes you about $183M before maintenance is calculated.
4. Drop to 80% LF and 50% full cargo, and 744 fleet makes $378M more in passengers and saves you $307M in rent. The 77W would save you $109M in fuel and make you $243M more in cargo. The net result is the 744 fleet now makes you $332M more than the 77W fleet. That cargo is absolutely needed on the 77W to close the large gap with such different acquisition prices.
So, thats an excel sheet gone mad. But, basically the cost to acquire the 744 fleet saves you hundreds of millions per year.
**If the acquisition cost were the same per copy, the 77W wins by about $10M on a 80% LF and 50% cargo and by $159M if you fill it up every leg. **
Simple estimation. Nothing more. But I'm going to have to say I could believe that Delta would agree to this kind of a deal and that, per previous post, Boeing would offer a trade-in to someone and we'd take their 744s.
Sources:
B773 List Price: Boeing List Prices New
B744 Used Price: Guess
Fleet: Assume .5 77W in maintenance and 1 744 in maintenance making the fleet numbers based on 9.5 77W and 10 744s.
Acquisition Option: Cash. Lease would be approximately 1% of
ATL-NRT: Ticket Price ATL-NRT Ticket Price
ATL-NRT: Daily service. 2 flights per day, assume 1 744 unavailable for maintenance and .5 77Ws unavailable for maintenance.
ATL-NRT: DAL 295 ATL-NRT planned distance. DAL 296 NRT-ATL
ATL-NRT Round Trips Per Year: Based on 13.7 hours west bound, 2 hour turn, 12.0 hours return, 4 hour turn, total 31.7 hours or 276.5 flights per year. Totals 25.7 hours per turn, 7107 hours per year, 19.46 hours per day.
Fuel Price Per Gallon: $3.20/gal based on Delta 4Q 2012 Earnings Call Transcript, Paul Jacobson estimate for March 2013 Fuel Price of $3.15 to $3.20/gal.
Fuel Burn: WB Master Dataset Comparison. Not adjusted for seating, estimated fuel burn on 6000nm ATL-NRT flight is 283,954 lbs for 744 vs 210,996 for 777. Equals 41,961 USG for 744 and 31,180 for 777. Equals 6.99usg/nm for 744 and 5.197 for 777. Equals 0.0186/gal/asm for 744 and 0.0168/gal/asm for 777.
B773 Cargo Capacity: B77W Cargo Capacity page 2, 44 LD3 containers plus bulk.
B774 Cargo Capacity: B744ER Cargo Capacity page 3, LD1/LD3 single fuel tank.
Cargo: 6.7 cu.ft. from averages per passenger estimate from non-sourced data, 10lbs cu.ft. average from same source.
Cargo Price: Delta Winter Cargo Rates. Estimate average of heavy <100kg and > 100kg price for ATL-NRT.
Pricing: Boeing Financing Options
1. Say the 77W costs nearly list price, $300M, and the used 744s cost $40M each. We're looking at $3,000M for new 77Ws and $440M for 744s. A net difference of $2,560M.
What is the opportunity cost on $2,560M in cash if we went that route?
2. Or how long would it take the 10 new 77Ws to best the 11 744s because of better fuel, maintenance and cargo capacity? - Passengers: DAL 744 seats 48J/42Y+/286Y for 376. American 777-300ER is at 8F/52J/30W/220Y for a total of 310 seats. Difference, 66Y class seats. Assume all of the routes of the 744/77W are ATL-NRT in distance, time and price. Assume F/J/W/Y+/Y seating income is the same $2100 average, the difference of 744 x 10 jets x $2100 x 276 round trips = $2,183M vs $1,710M for 9.5 77Ws. A $473M advantage for the B744 "Spackler Jets".
- Maintenance: What if Delta negotiates with Boeing to mitigate the cost difference between the two as much as feasible? Without any data to work with and that possibility there, I call this a push.
- Fuel: Based on this WB Master Dataset Comparison"] I estimate that the 77W would best the 744 on a ATL-NRT type flight with a 25.7% better fuel burn. Or, the 77W would burn 72957lbs/10781gal less fuel at $3.20/gal the 77W saves $34,500 each leg or $19M a year. Multiplied by 9.5 77W and 10 744, the 744 runs $371M in fuel and 77W $262M or the 77W saves $109M in fuel.
- So the 744 at this point would still be up around $364M given its $473M seating advantage but -$109M loss in fuel to the 77Ws superior fuel burn.Note, while the 77W may best the 744 with a 25.7% lower fuel burn, when adjusted for fuel burn per ASM, the 77Ws advantage falls twenty percentage points to 9.8%. The 744 simply has more ASMs to spread the fuel cost over.
- So that leaves cargo. Estimated 7,640 cu.ft. for the 77W and 5,655 cu.ft. per 744. At 6.7 cu.ft. per passenger bag, that leaves the 77W with a net of 5,563 cu.ft. of cargo and 744 with 3,135 cu.ft.
At 10 lbs per cu.ft. the 77W will carry 55.6K lbs of cargo over 744 31.4K. Basically, the 77W has 77% more cargo capacity.
At $4.10/lb with 100% LF the 77W makes $228in one leg vs $129k for the 744. Multiplied by 276 round trips/553 legs and a fleet of 9.5 77Ws and 10 744s, the new 77W fleet brings in $1,198M in cargo vs $711M for the 744. Advantage 77W by $487M a year. - Lease: Say you leased the two fleets at the standard 1% per month of the aircraft price or $440K/mo for 744 and $3M/mo for 77W. With a 11 744 fleet and 10 77W fleet, you're looking at $58M in annual lease cost for 744 vs $360M for 77W, a 744 cost advantage of $307M.
3. Thus, add everything up and with 100% LF and 100% full cargo 100% of the time on 270 round trips per jet per year between ATL-NRT and the 744 fleet makes you about $183M before maintenance is calculated.
4. Drop to 80% LF and 50% full cargo, and 744 fleet makes $378M more in passengers and saves you $307M in rent. The 77W would save you $109M in fuel and make you $243M more in cargo. The net result is the 744 fleet now makes you $332M more than the 77W fleet. That cargo is absolutely needed on the 77W to close the large gap with such different acquisition prices.
**If the acquisition cost were the same per copy, the 77W wins by about $10M on a 80% LF and 50% cargo and by $159M if you fill it up every leg. **
Simple estimation. Nothing more. But I'm going to have to say I could believe that Delta would agree to this kind of a deal and that, per previous post, Boeing would offer a trade-in to someone and we'd take their 744s.
Sources:
B773 List Price: Boeing List Prices New
B744 Used Price: Guess
Fleet: Assume .5 77W in maintenance and 1 744 in maintenance making the fleet numbers based on 9.5 77W and 10 744s.
Acquisition Option: Cash. Lease would be approximately 1% of
ATL-NRT: Ticket Price ATL-NRT Ticket Price
ATL-NRT: Daily service. 2 flights per day, assume 1 744 unavailable for maintenance and .5 77Ws unavailable for maintenance.
ATL-NRT: DAL 295 ATL-NRT planned distance. DAL 296 NRT-ATL
ATL-NRT Round Trips Per Year: Based on 13.7 hours west bound, 2 hour turn, 12.0 hours return, 4 hour turn, total 31.7 hours or 276.5 flights per year. Totals 25.7 hours per turn, 7107 hours per year, 19.46 hours per day.
Fuel Price Per Gallon: $3.20/gal based on Delta 4Q 2012 Earnings Call Transcript, Paul Jacobson estimate for March 2013 Fuel Price of $3.15 to $3.20/gal.
Fuel Burn: WB Master Dataset Comparison. Not adjusted for seating, estimated fuel burn on 6000nm ATL-NRT flight is 283,954 lbs for 744 vs 210,996 for 777. Equals 41,961 USG for 744 and 31,180 for 777. Equals 6.99usg/nm for 744 and 5.197 for 777. Equals 0.0186/gal/asm for 744 and 0.0168/gal/asm for 777.
B773 Cargo Capacity: B77W Cargo Capacity page 2, 44 LD3 containers plus bulk.
B774 Cargo Capacity: B744ER Cargo Capacity page 3, LD1/LD3 single fuel tank.
Cargo: 6.7 cu.ft. from averages per passenger estimate from non-sourced data, 10lbs cu.ft. average from same source.
Cargo Price: Delta Winter Cargo Rates. Estimate average of heavy <100kg and > 100kg price for ATL-NRT.
Pricing: Boeing Financing Options
02-25-2013, 04:43 AM
Gets Weekends Off
Joined APC: Feb 2008
Posts: 19,412
well, we're supposed to buy into the time value of money argument. So while we didn't get a delivery schedule from Carls original post, it seems as if the 77W has a long waiting line and those in line seem to be Boeing's HVC. I bet its harder to cut in line.It also seemed as if the 744s could be acquired relatively soon and start making money sooner. So as the song says, if you can't be with the one you want, be with the one your with. Advantage 744?
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Also, I can see where Boeing would offer us 744s to, imho, help another customer move into those 748s slots they're not filling. After all didn't Boeing buy A330s from SQ to help them into 777s? I'd bet those Airbus came at a good price to whoever bought them from Boeing.
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Also, I can see where Boeing would offer us 744s to, imho, help another customer move into those 748s slots they're not filling. After all didn't Boeing buy A330s from SQ to help them into 777s? I'd bet those Airbus came at a good price to whoever bought them from Boeing.
02-25-2013, 04:49 AM
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Joined APC: Dec 2009
Position: Capt
Posts: 2,049
Looks like that 717 won't be going too junior after all. 82 senior to upper 6900 seniority. Figure it's the junior m88A and lots of DC9 folks. My 9500 bud is gonna owe me a beer I think.
02-25-2013, 05:06 AM
Gets Weekends Off
Joined APC: Jan 2008
Posts: 201
Why do I get the feeling that if we finally hear the 747 rumor to be true it will be around 2015 or so and contingent on us signing another expedited subpar contract:-0
02-25-2013, 05:13 AM
Moderator
Joined APC: Oct 2006
Position: B757/767
Posts: 13,088
I'm not disagreeing with you. I actually agree with you. But in his particular situation, he committed himself by looking. I'm with you though. Don't look at all, and you won't be put in his situation to begin with.
02-25-2013, 05:15 AM
veut gagner à la loterie
Joined APC: Apr 2008
Position: Light Chop
Posts: 23,286
Nothing is junior. I think for As there will be nothing junior about the airplane while Bs will find a lot more senior than anyone thought and then junior at the bottom of the list.
02-25-2013, 05:17 AM
veut gagner à la loterie
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Posts: 23,286
02-25-2013, 05:44 AM
Gets Weekends Off
Joined APC: Sep 2006
Position: Starboard Side, weekends & holidays.
Posts: 855
I disagree completely. He didn't acknowledge anything. Until the assignment is acknowledged it does not exist. I look at my schedule all the time on reserve and I never acknowledge anything unless its on my last off day or to my advantage. If they don't call me, I'm staying home, and I'll be fully within my contractual rights to do so. To each his own though. It's probably not worth arguing about.
02-25-2013, 05:51 AM
Gets Weekends Off
Joined APC: Feb 2007
Position: 765-A
Posts: 6,844
Sailing,
Why do you say Alaska has a better inflight product than we do?
How do you know Boeing won't cover the maintenance cost?
02-25-2013, 05:57 AM
Straight QOL, homie
Joined APC: Feb 2012
Position: Record-Shattering Profit Facilitator
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