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Author Topic: 744 strategy dilemma  (Read 554 times)

Offline Jimbo2012

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744 strategy dilemma
« on: December 11, 2011, 04:01:14 PM »
There are a number of posts on the forum that might lead one to believe that using 744s amounts to business suicide.
It is very tempting in the mid-90s to sign up for 15yr leases for 744s to take me through until 2010. What's the down side?

Well, I can see that fuel prices are going to pick up and that 773's would be a better alternative (when they come into service). But I also really need aircraft now and can get them quicker (because they are cheaper) on longer leases.

So is it really that bad if you envisage a fleet of say 50 LH aircraft to get 10x744s(15yrs); 10x744s(7yrs) and start bringing in 773s, retiring the 744s in two chunks.

Any comments gratefully appreciated... I don't want to miss something obvious.

Offline Maarten Otto

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Re: 744 strategy dilemma
« Reply #1 on: December 11, 2011, 05:24:53 PM »
Try...
You can ask... but then you won't learn how to play.

Personally I would do an 8 year lease and replace them if you really have to. After the 8 year lease you can decide If you need them any longer, or wish to replace them for 777. But keep in mind that a fleet replacement program can be very expansive. Especially when it comes to fleet commonality or other slots at airports.

Offline LemonButt

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Re: 744 strategy dilemma
« Reply #2 on: December 11, 2011, 05:48:19 PM »
744 is only suicide if you have one or two.  You need to have a large fleet of them to reduce the marginal overhead costs enough to make them profitable.  15 year leases on any aircraft is not wise.  You could easily have a 5-8 year lease and buy the aircraft outright after that period to greatly reduce your operating costs by having no lease to pay.  It's much better to own a gas guzzler outright than to pay a lease on a fuel efficient aircraft.

You are based in Hong Kong, which means you're slot constrained and there is lots of longhaul demand.  I'd recommend getting 744 and flying them as far as possible--the farther the better.  The shorter the distance you fly them, the more competition your going to have and you'll end up losing out to frequency.  The reason 744 are suicide is because they are often not flown on the right routes and competitors take away market share.  The 744 is profitable, but not if you can't fill the seats and are only flying half full.  The smaller aircraft that will beat you up and beat you with frequency won't be able to fly the 4000nm routes the 744 can.

Offline swiftus27

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Re: 744 strategy dilemma
« Reply #3 on: December 12, 2011, 05:19:22 AM »
You must own those LR planes to have a chance with the new scenarios.  Lease the first fleet group, own the second.

 

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