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Author Topic: 777s bleeding cash  (Read 2753 times)

Offline LemonButt

  • Members
  • Posts: 1895
777s bleeding cash
« on: January 14, 2010, 12:02:49 AM »
Anyone else have this problem?  I have nine 777 and they are bleeding cash at these fuel prices (over $1000).  Even at default prices and 90% load factors I'm running 200-300k in the red.  The leases are ~$3 million and I know that's what's doing it, but wow this is bad.

ICEcoldair881

  • Former member
Re: 777s bleeding cash
« Reply #1 on: January 14, 2010, 01:53:18 AM »
that's your problem-you shouldn't be flying the wide-bodies that guzzle fuel at those prices. In ATB1, I had a small airline in Taiwan flying MD-90-30ERs and Avro RJ85s around Taiwan, when I got news that my "parent airline" (it was a partner deal with blumage-he would be Asian Connection and I would be his regional airline-Asian CityJet) had to cut a lot of route because of extreme fuel prices. I was shocked, as I was actually making MORE from the higher fuel prices because I could lower my prices a lot on competitive routes and still lower prices on non-competitive routes, while the other airline (the only airline I was competing against was Kaohsiung Connect) had to raise prices on his route because he had bigger, wide-bodied aircraft to tend to. By the time the game ended (which was only 3 years later game-time), I had actually bought more planes during that time (physically bought, as in paying 43m each) than any other time during the game, and finished with only 6 planes to buy-and I forgot to buy them all as I had enough to buy them. that's what you should do: cut the WBs and stick with the NBs. that'll get you through the fuel prices. ;)

Cheers,
ICEcold

Offline Unbornio

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Re: 777s bleeding cash
« Reply #2 on: January 14, 2010, 08:06:55 AM »
Anyone else have this problem?  I have nine 777 and they are bleeding cash at these fuel prices (over $1000).  Even at default prices and 90% load factors I'm running 200-300k in the red.  The leases are ~$3 million and I know that's what's doing it, but wow this is bad.

No. Last time I saw your airline (I quit Rise of Modern Airliners yesterday), you had 3 or 4 types of aircraft and like 5 of each..? Maintenance is killing you. If you have 2+ fleet types = double maintenance costs.
Beta Tester

Offline LemonButt

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  • Posts: 1895
Re: 777s bleeding cash
« Reply #3 on: January 14, 2010, 01:29:20 PM »
I'm paying $12.5 million/month for 54 aircraft which comes out to ~$231k per aircraft per month, which I didn't think was too terrible all things considered.  I've got 4 fleets--747,757,777,Dash-8 and ten 777 are only $4 million/month for maintenance, which is ~400k per plane or $100k/week.

Offline ukatlantic

  • Members
  • Posts: 1780
Re: 777s bleeding cash
« Reply #4 on: January 15, 2010, 05:58:09 PM »
777 fleet is a nightmare currently - I have owned ones and they are at 90% load factor and all routes are profitable but fuel price is killing nay profit - my leased ones are running huge losses - possibly cheaper to cut the routes and ground them no fuel or engineering costs to worry about then  :-\

Online mark320

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  • Posts: 101
Re: 777s bleeding cash
« Reply #5 on: January 15, 2010, 09:54:27 PM »
It all depends on many factors really. I have leased a fleet of used A321/330/340, yes A340-600! fleet and engine commonality save a lot of money. The 77W is slightly more fuel efficient than the A346 but combined to a common fleet and good schedule it works mighty fine! I am turning 200K plus net profit with 80-90% LF! That is including a short sector of 3 hrs to fill the schedule. It will however leave the fleet when the lease expire but i will be upgrading! The A350XWB will be replacing the A333 and A346. They will be missed. Remember CASM and revenue per route is king ;)

Good Luck.

PS Dumping capacity is illegal in the real world 8)

hybridace101

  • Former member
Re: 777s bleeding cash
« Reply #6 on: February 23, 2010, 02:00:51 AM »
I have this same problem with the my 77Ws.  Sure the routes flown by it are profitable themselves but looking at the lease-to-revenue ratio, I get 1:3.  Same problem with the 788s (which probably has the profit per passenger kilomere I have had).  With my A330s however, the ratio is 1:6 which means I pay $1 in leases for every $6 I receive from passengers.  Why is it that here in AWS, the situation is reverse with the real world where 77Ws are more efficient but here they are less efficient? 

I have A350s on order (on lease).  Will I get even some money back if I cancel them now?  They will just cost me more in terms of leases compared to older aircraft.  I am going to use the proceeds to stay afloat while I terminate the leases on all my 77Ws. 

The bottomline: newer aircraft should only be purchased if a) there are many high-yield nearby destinations.  Leasing costs are just too much to hurdle.  
« Last Edit: February 23, 2010, 02:05:48 AM by hybridace101 »

ICEcoldair881

  • Former member
Re: 777s bleeding cash
« Reply #7 on: February 23, 2010, 02:29:41 AM »
main factors: fuel cost, demand and maintenance.

what is the fuel cost, what fleet types do you have and what is the demand (and your configuration of the B773 and B788 would help) for the routes you fly the planes in question on?

I might be able to help you get back money from your routes...... ;)

hybridace101

  • Former member
Re: 777s bleeding cash
« Reply #8 on: February 23, 2010, 03:27:04 AM »
I have a both kinds of A330s, 77Ws, 788s, A380s, the A320 family and the Embraer 170 something.  The reason why I had a varied fleet is because the routes I fly to have a variety of demand figures.   

Online mark320

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  • Posts: 101
Re: 777s bleeding cash
« Reply #9 on: February 23, 2010, 06:32:37 PM »
Hi Hybrid,

Maybe you might need to a balance out your flights so as to have as many back to back longer haul flights with a good amount of seats which give you a good LF/ profit margin. That's what the mighty twin is good at. On the otherhand you might want to rationalise your fleet so as to have better commonality. E.G. all my long haul fleet uses/d Trents, and I planned it that way. A330-A380 and then A350 will have the same engines. I also found that I am better off operating an A380 than an A346 (same size as B77W) since the former can give me more revenue and is 27% cheaper per seat both, new and with a lower seating density on the A346.Also be careful if on the routes are some airlines who aim at market share and not revenue as this will hit you worse on a bigger plane!

Good luck

Mark320

hybridace101

  • Former member
Re: 777s bleeding cash
« Reply #10 on: February 23, 2010, 07:32:17 PM »
Thanks Mark!  I did sell-off my 77Ws simply because there are no more routes to fly them on.  All the high yield high density routes are filled-up with more established competitors.  It just goes to show that the widebodies work more in favour of established/older carriers.  ThIs is even made worse by the abuse of 5th freedom rights by the big carriers on trans-pacific flights.

 

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