27 November 2014

Reason behind Delta-decision to order A350.

AirwaysNews has conducted an economic analysis of the 787-9, A350-900 and 777-200LRs trying to analyze the reasons behind Deltas decision to order A350s and A330neos instead of 787.

Source: Airbus


The route used for the comparison has been a representative one: Seattle-Shanghai Pudong, from Delta’s trans-Pacific network. The distance for the route is 4.972 nautical miles, and operating cost calculations were made based on a variable fuel cost scenarios (jet fuel at $3.50, $3.00, and $2.50 per gallon). The A350-900 and 787-9 are assumed to sport identical 46% discounts with a 60% discount for the 777-200LR (as Boeing attempts to fill its production gap). A 12-year depreciation schedule is used.



As the data illustrates, the A350-900′s higher seating capacity gives it only a narrow disadvantage in cash operating cost per seat mile, but in terms of total CASM, the 787-9 has a small (<3 .5="" advantage.="" nbsp="" o:p="">

Both aircraft are close enough in terms of operating cost that non-operating factors (commonality with the A330-900neo, availability, etc.) won the day for the A350-900.
Furthermore, the analysis clearly illustrates why Delta rejected the stopgap 777-200LRs; a 16-20% operating cost disadvantage inclusive of capital costs is too large to stomach in a low margin hub like present day Seattle.

Source: publico.pt


As the operating economics are close enough to each other, “availability carried the day”; delivery slots offered to Delta in the 2016-2018 timeframe by Airbus (combined delivery slots for the A330-900neo and A350-900) have made the difference.



Based on the article “ANALYSIS: Delta Order for A350; A330neo Hinged on Pricing, Availability.” Published in AirwaysNews

6 comments:

  1. if u use deltaz 772 lr seating as assumption, how can a much narrower n shorter 789 can hv more seats?...i think it ll b more like 280 seats..then the seat mile n operating cost start tilting towards a359..that along with more capacity n better availabilty won the order for airbus

    ReplyDelete
  2. Agree, looks like they mixed 777 & 787 seating capacity

    ReplyDelete
  3. Don't think they got the seat plan wrong.

    Here is a link with exact layout of delta 777-200ER/LR. Both have exact same configuration.

    http://www.seatguru.com/airlines/Delta_Airlines/Delta_Airlines_Boeing_777-200ER.php#

    ReplyDelete
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