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Author Topic: AC leasing cost Vs available seats/Fuel burn  (Read 1908 times)

tm07x

  • Former member
AC leasing cost Vs available seats/Fuel burn
« on: August 02, 2013, 05:36:36 PM »
Hi, I was hoping you guys could help me figure this out.

I was contemplating about adding a second fleet type to serve the sub 100 pax routes since the 737 only comes in a 120 seater. (I'm not taking used AC into account).

So I set out to do some route research and aircraft research to see if there was a viable option for my needs. The only smaller plane that I found a viable option to the 737, or as an addition was the BAC One-Eleven 475/500. I ruled out the Fokker 28 due to high fuel burn and no extended/short fuselage version.

When I'm sitting here and comparing the 737 200adv with the BAC One-Eleven series I can't get the numbers to add up.

Both AC types have the same number of pilots and crew.
Both AC types have the same turn-around times.
Both AC types have very similar cruise speeds.

The lease costs:

737-200Adv (Similar range as 1-11-500 Series) = 114.000 USD per month
One-Eleven 500                                            = 120.000 USD per month
One-Eleven 475                                            = 111.000 USD per month


Fuel burn:

737-200Adv (Similar range as 1-11-500 Series) = 3050 kg/hr
One-Eleven 500                                            = 2390 kg/hr
One-Eleven 475                                            = 2370 kg/hr

Is the extra fuel burn on the 737 enough to justify adding a second type to the fleet?

Or is it more economical to stick to the 737 fleet and fly on 70-100 pax routes with the 737?

Based on todays fuel price and a fleet of 10 AC with an 18 hour utilisation the weekly fuel difference is ROUGHLY 55.000 USD pr week or 5.500 pr plane. That doesn't seem like a lot and it is very unlikely I will get 18 hours of FU pr day due to the time it takes to turn the AC around for next flight.

Is my math completely and thinking way off and am I forgetting something very important here?

 :-[


exchlbg

  • Former member
Re: AC leasing cost Vs available seats/Fuel burn
« Reply #1 on: August 02, 2013, 07:43:43 PM »
there are some other things to think of:
different pilot groups/costs
different flight attendant staffing
different maintenance costs/duration
turnaround times
speeds
distances
commonality with larger/smaller planes for future expansion
availability in used markets
waiting queues for new planes

Offline Teadaze

  • Members
  • Posts: 777
Re: AC leasing cost Vs available seats/Fuel burn
« Reply #2 on: August 02, 2013, 07:49:43 PM »
general rule of thumb is you do not want to have 4 plane type, some bigger fleet might even say you do not want to touch 3. lower fleet type = way more saving in commonality.

Based on your base, what type of aircraft do you need?
international(not much in TPA), Prop(maybe), domestic (short / mid / long)

remember, USA is huge! 737 and BAC may not have the range to cover the whole country. You may need a third plane type to cover that hole such as 727adv. BAC and 737 is redundant, the only main thing you need to consider it has more range, and there are still some available in the UM. Where BAC you need to be very lucky to get one.

Personally I would be against it.

tm07x

  • Former member
Re: AC leasing cost Vs available seats/Fuel burn
« Reply #3 on: August 03, 2013, 02:31:09 PM »
there are some other things to think of:
different pilot groups/costs
different flight attendant staffing
different maintenance costs/duration
turnaround times
speeds
distances
commonality with larger/smaller planes for future expansion
availability in used markets
waiting queues for new planes

Well...
Same pilot group
Same turn-around
negligible difference in maint. cost
similar speeds
can't factor in distance because in my scenario I'm comparing the 737 model with similar range as the One-Eleven
737 Has better commonality but that's not what I'm asking
waiting queues is not relevant to my question


tm07x

  • Former member
Re: AC leasing cost Vs available seats/Fuel burn
« Reply #4 on: August 03, 2013, 02:40:20 PM »
general rule of thumb is you do not want to have 4 plane type, some bigger fleet might even say you do not want to touch 3. lower fleet type = way more saving in commonality.

Based on your base, what type of aircraft do you need?
international(not much in TPA), Prop(maybe), domestic (short / mid / long)

remember, USA is huge! 737 and BAC may not have the range to cover the whole country. You may need a third plane type to cover that hole such as 727adv. BAC and 737 is redundant, the only main thing you need to consider it has more range, and there are still some available in the UM. Where BAC you need to be very lucky to get one.

Personally I would be against it.

I'm not asking whether or not the One-Eleven is a good choice of AC or not. Neither am I asking whether it's a good fit for my base.
I am fully aware of the extra cost of adding third and fourth fleet type.

I'm also aware that the US is a vast country and for that purpose the One-Eleven might not be a good choice if you want to operate the 1500+ NM routes.


What I am asking is whether or not it makes sense buying a One-Eleven to operate on 70-100pax routes where the 737 is too big.
I can't see any savings on leasing costs with the 1-11, the maintenance and fuel savings are marginal at best.

So what I'm asking is, is it simply just better to stick to the 737 and operate it on the sub 100 pax routes? even if I don't have the PAX demand.

I would consider a turbo-prop but I don't know if it's feasible to operate it on 500+nm routes. And there isn't enough demand to operate a fleet of 10-20 Fokker 27's in the sub 500nm market.

Offline schro

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  • Posts: 3068
Re: AC leasing cost Vs available seats/Fuel burn
« Reply #5 on: August 03, 2013, 02:45:07 PM »
I'm not asking whether or not the One-Eleven is a good choice of AC or not. Neither am I asking whether it's a good fit for my base.
I am fully aware of the extra cost of adding third and fourth fleet type.

I'm also aware that the US is a vast country and for that purpose the One-Eleven might not be a good choice if you want to operate the 1500+ NM routes.


What I am asking is whether or not it makes sense buying a One-Eleven to operate on 70-100pax routes where the 737 is too big.
I can't see any savings on leasing costs with the 1-11, the maintenance and fuel savings are marginal at best.

So what I'm asking is, is it simply just better to stick to the 737 and operate it on the sub 100 pax routes? even if I don't have the PAX demand.

I would consider a turbo-prop but I don't know if it's feasible to operate it on 500+nm routes. And there isn't enough demand to operate a fleet of 10-20 Fokker 27's in the sub 500nm market.

Personally, I would operate the 737 on routes that are marginal rather than adding the extra fleet type. The pro side of the 111 is that it in theory has lower airport fees costs due to being a smaller class a/c with lower mtow and uses medium pilots, but that doesn't really offset the fleet commonality costs of adding it. The other con to it is that the 111 will get plane is too small warnings at the top end of its range as demand grows, whereas the 737 should be fine up to US transcons for the most part.

Offline LemonButt

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  • Posts: 1895
Re: AC leasing cost Vs available seats/Fuel burn
« Reply #6 on: August 03, 2013, 03:05:17 PM »
The year is 1975.  Passenger numbers are going to increase over time.  If you plan on not BK'ing anytime soon, you should stick to the 737 and let the pax demand grow into your plane over the next few years.  So if a route has 80 pax today, expect it to be 120 pax in 5 years or so.  Many players have this idea that empty seats are bad, which is not true, especially when you're talking about high demand aircraft such as the BAC 1-11 or B737.  The worst thing you can do is put a BAC 1-11 on the route and end up with 100% LF and unable to expand because there are no slots available to add a second flight and the B737 production line has a 5 year backlog.  You can fly the B737 profitably on those routes today, so do it.

Really, there is no difference between the B737 and BAC 1-11 in terms of the routes they serve.  You should not be looking at adding another fleet type with a 20 seat delta unless you are retiring one fleet for the other.  If you have a 120 seater 737, you should only add another fleet type if you are looking for ~60 seater prop planes with lower fuel burn or 200 seat wide-bodies with extended range.  If you add both fleets, that puts you at 3 fleet types with 60, 120, and 200 seaters.  When you are retiring a fleet in the future, that puts you at 4 fleet types, maybe 5.  Any more than this and you're putting yourself in a bad position financially.

Offline LemonButt

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  • Posts: 1895
Re: AC leasing cost Vs available seats/Fuel burn
« Reply #7 on: August 03, 2013, 03:11:02 PM »
I'd also like to add anyone who is ordering the BAC 1-11 475 over the 500 is out of their mind as they are giving up 25 free seats.

tm07x

  • Former member
Re: AC leasing cost Vs available seats/Fuel burn
« Reply #8 on: August 03, 2013, 05:37:07 PM »
Thanks Schro and Lemon!

Offline Andre

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  • Posts: 1091
Re: AC leasing cost Vs available seats/Fuel burn
« Reply #9 on: August 03, 2013, 06:39:39 PM »
Well...
Same pilot group
Same turn-around
negligible difference in maint. cost
similar speeds
can't factor in distance because in my scenario I'm comparing the 737 model with similar range as the One-Eleven
737 Has better commonality but that's not what I'm asking
waiting queues is not relevant to my question



The pilot groups are different.. BAC is Medium and B732 is Large.
Speed is different.
Maintenance costs are also different.

Offline Teadaze

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  • Posts: 777
Re: AC leasing cost Vs available seats/Fuel burn
« Reply #10 on: August 03, 2013, 10:43:11 PM »
I'm not asking whether or not the One-Eleven is a good choice of AC or not. Neither am I asking whether it's a good fit for my base.
I am fully aware of the extra cost of adding third and fourth fleet type.

I'm also aware that the US is a vast country and for that purpose the One-Eleven might not be a good choice if you want to operate the 1500+ NM routes.


What I am asking is whether or not it makes sense buying a One-Eleven to operate on 70-100pax routes where the 737 is too big.
I can't see any savings on leasing costs with the 1-11, the maintenance and fuel savings are marginal at best.

So what I'm asking is, is it simply just better to stick to the 737 and operate it on the sub 100 pax routes? even if I don't have the PAX demand.

I would consider a turbo-prop but I don't know if it's feasible to operate it on 500+nm routes. And there isn't enough demand to operate a fleet of 10-20 Fokker 27's in the sub 500nm market.

guess I have missed a line or 2... but basically, no point to go for BAC was my point, you can limit how many seat you go for.

tm07x

  • Former member
Re: AC leasing cost Vs available seats/Fuel burn
« Reply #11 on: August 03, 2013, 10:50:48 PM »
The differences negligible.

Groups might be different but the savings are slim. 1000 USD pr month pr pilot.
Speed difference of 409 vs 413. on a 1500nm mission there is ZERO difference.

Maintenance costs aren't much different either.

One-Eleven:
A check: 2 398 USD
B check: 7 495 USD
C check: 134 900 USD
D check: 674 510 USD

737-200adv:
A check: 2 652 USD
B check: 7 702 USD
C check: 154 050 USD
D check: 757 620 USD

So I guess saving 200 bucks on all B checks are huge savings.... Probably enough to justify getting a second fleet type.

exchlbg

  • Former member
Re: AC leasing cost Vs available seats/Fuel burn
« Reply #12 on: August 03, 2013, 10:54:12 PM »
Andre is right, you overlooked some different details, the BACs have some advantages, but I would recommend staying with the bigger Boeings for commonality.
It would only make sense, if those 100-ish routes are abundant and can keep a fleet of BACs busy. Many routes will grow on demand over time to fill the bigger Boeings time by time, though.

Offline LemonButt

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  • Posts: 1895
Re: AC leasing cost Vs available seats/Fuel burn
« Reply #13 on: August 03, 2013, 11:02:41 PM »
on a 1500nm mission there is ZERO difference.

I fly 14 sorties/week to Heathrow :)

tm07x

  • Former member
Re: AC leasing cost Vs available seats/Fuel burn
« Reply #14 on: August 03, 2013, 11:22:21 PM »
Andre is right, you overlooked some different details, the BACs have some advantages, but I would recommend staying with the bigger Boeings for commonality.
It would only make sense, if those 100-ish routes are abundant and can keep a fleet of BACs busy. Many routes will grow on demand over time to fill the bigger Boeings time by time, though.

a 20k C-check saving pr year, 200 dollar saving on a b-check, and 1000 bucks pr month pr pilot are justifiable costs to add a second fleet type then?


tm07x

  • Former member
Re: AC leasing cost Vs available seats/Fuel burn
« Reply #15 on: August 03, 2013, 11:24:18 PM »
I fly 14 sorties/week to Heathrow :)

not sure what that means Lemon but I was merely saying that on a 1500nm mission (which is the max range of a 1-11-500) there are ZERO saving on flight-time. Both AC clock in at 3 hours FT. :)

Offline Teadaze

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  • Posts: 777
Re: AC leasing cost Vs available seats/Fuel burn
« Reply #16 on: August 03, 2013, 11:32:17 PM »
like most here suggested, Not worth the BAC in the long run you will encounter more trouble and cost due to many various reasons. Especially if you only plan to deploy less then 20 of those birds. BAC has it's advantage but really not in your case... you are better off a prop/main/LH combination. But if you insist go ahead but more then likely you will regret. As it will be a 5+ years plane investment more then likely.

btw boeing is cheaper, ~10% cheaper then BAC/month in commonality.
« Last Edit: August 03, 2013, 11:49:22 PM by Aoitsuki »

Offline schro

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  • Posts: 3068
Re: AC leasing cost Vs available seats/Fuel burn
« Reply #17 on: August 03, 2013, 11:43:30 PM »
So I guess saving 200 bucks on all B checks are huge savings.... Probably enough to justify getting a second fleet type.

Not sure if serious or trolling

tm07x

  • Former member
Re: AC leasing cost Vs available seats/Fuel burn
« Reply #18 on: August 04, 2013, 12:39:09 AM »
it was a joke ;) with a touch of sarcasm.

tm07x

  • Former member
Re: AC leasing cost Vs available seats/Fuel burn
« Reply #19 on: August 04, 2013, 12:40:40 AM »
like most here suggested, Not worth the BAC in the long run you will encounter more trouble and cost due to many various reasons. Especially if you only plan to deploy less then 20 of those birds. BAC has it's advantage but really not in your case... you are better off a prop/main/LH combination. But if you insist go ahead but more then likely you will regret. As it will be a 5+ years plane investment more then likely.

btw boeing is cheaper, ~10% cheaper then BAC/month in commonality.

not adding a type.

Conclusion seems even if you are to pick your first and even only fleet the One-Eleven doesn't seem like a good choice compared to the 737. Despite the heavier class and maintenance cost.

 

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