A340 opportunity

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Unilitha2
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Joined: 22 Apr 2010, 14:09

A340 opportunity

Post by Unilitha2 »

Hi ! According to Bernsteirn Research it seems second-hand A340-500/600 are worth 60-70 m USD, however airlines would value the aircraft at no more than 20m USD. I don't know how is the situation for A340-300, the -300 is probably more succesful and therefore more expensive but if it would reveal to be as "inexpensive" as the -500/600, wouldn't that be a good option for Brussels Airlines to rapidly increase its Long haul fleet for the short run ? Not a lot of cash would be necessary, of course these planes burn more fuel than more recent aircraft but if you can't expand rapidly enough to keep your market share then any more efficient plane is just useless isn't it ?



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cnc
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Re: A340 opportunity

Post by cnc »

its not like SN has a couple of 20 millions to spend and i doubt they have too much new destinations in sight

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cathay belgium
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Re: A340 opportunity

Post by cathay belgium »

It's not only planes, also crews,promotion,based personal and contract on the other side of the flight...
And as long as there won't be long haul invaders I don't think SN would expand more rapidly, one A333 a year will do..
As we see in the last years this management is too scared to grow and act more aggresively on the changing market...
Guess we will see what happen as also EK put their feet in BRU and will compete their Africa destinations with much better fares, and if TK would pull more marketshare by dropping more fares they need to fight on all different angles, let's see what LH will decide...then...
A343 for expansion, think will also have to think about a long haul fleet renewal and the avro's all the way... Will see what happen with LX A343 when the B777 arrives... Or LH set theirs on the side...

CXB
New types flown 2022.. A339

Air Key West
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Re: A340 opportunity

Post by Air Key West »

Hi ! I'm not a technical expert in aviation, but aren't A340 said to be expensive to operate ? B.Air needs to get rid of its Avrojets as quickly as possible (although I like them in terms of pax comfort), but there burn to much kerosene. One of the things that will probably make them profitable is to only fly modern aircraft with low fuel consumption. The sooner they can replace the Avrojets with modern fuel efficient plane, the better for the survival of the company. Would the A340 fit in such a strategy ?
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smokejumper
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Re: A340 opportunity

Post by smokejumper »

Air Key West wrote:Hi ! I'm not a technical expert in aviation, but aren't A340 said to be expensive to operate ? B.Air needs to get rid of its Avrojets as quickly as possible (although I like them in terms of pax comfort), but there burn to much kerosene. One of the things that will probably make them profitable is to only fly modern aircraft with low fuel consumption. The sooner they can replace the Avrojets with modern fuel efficient plane, the better for the survival of the company. Would the A340 fit in such a strategy ?
The A-340 is a derivative of the (very successful and economical) A-330 with modified wing structure for 4 engines. It has always burned more fuel than it's twin engine competitors, but at 2001 fuel prices it was not at too much disadvantage, especially at it's longest ranges. With the development of the Boeing 777-300ER series of aircraft (with much better fuel economy) coupled with today's higher fuel prices, it became cost prohibitive.

It's current book value is much lower than predicted and Airbus entered into future value contracts with the purchasing airlines guaranteeing it's value; if the airlines exercise the contract clauses, Airbus can be out billions of dollars, hence their effort to re-assure the purchasers. The A-340 program was ended in November 2011 due to lack of sales.

WikiPedia, an on-line encyclopedia, says the following re the A-340:
"In mid-2008, jet fuel prices doubled compared to the year before; consequently, the A340's fuel consumption led airlines to reduce flight stages exceeding 15 hours. Thai Airways International cancelled its 17-hour, nonstop Bangkok–New York/JFK route on 1 July 2008, and placed its four A340-500s for sale. While short flights stress aircraft more than long flights and result in more frequent fuel-thirsty take-offs and landings, ultra-long flights require completely full fuel tanks. Thus en route, the plane is burning extra just to carry fuel, a "flying tanker with a few people on board," Air France-KLM SA's chief executive Pierre-Henri Gourgeon told the Wall Street Journal.[49]

"While Thai Airways has consistently filled 80% of the seats on its New York City–Bangkok flights, it estimates that, at 2008 fuel prices, it would need an impossible 120% of seats filled just to break even.[50] Other airlines are re-examining long-haul flights. In August 2008 Cathay Pacific stated that rising fuel prices were hurting its trans-Pacific long-haul routes disproportionately, and that it would cut the number of such flights and redeploy its aircraft to shorter routes such as between Hong Kong and Australia."

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sn26567
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Re: A340 opportunity

Post by sn26567 »

Nice analysis. Thank you smokejumper!
André
ex Sabena #26567

ticketbuyer
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Re: A340 opportunity

Post by ticketbuyer »


smokejumper
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Re: A340 opportunity

Post by smokejumper »

ticketbuyer wrote:Airbus has a plan for the A340.
http://www.bloomberg.com/news/2013-12-0 ... uild-value
I couldn't follow the link, but I've copied the story (and it might be a game changer for the A-340). But note that to achieve such density Airbus proposes to install 16.7" (42.4 cm) seats while criticizing Boeing for installing wider seats and calling for a standard 18" (45.7 cm) seat on long range flights. As an extreme example, the A-340 (or any other aircraft) can become SUPER efficient by installing (say) 1,000 seats that are only 9" ( 22.8 cm) wide. It's the airline's call as they are the purchaser.

Headline: Airbus’s Longest Aircraft Gets More Seats to Help Rebuild Value
By Andrea Rothman and Robert Wall - Dec 4, 2013

Story: Airbus SAS plans to lift the seat count on the A340 wide-body jet and cut maintenance costs in an effort to prop up the market value for its longest aircraft, which went out of production two years ago after slack sales.

The plan, which needs approval from regulators, would see the seat count on the twin-aisle airliner go to 475, according to a presentation by Airbus and engine makers in London yesterday to A340 owners. Service costs on the four-engine jet would fall to the equivalent of two powerplants to improve its economics.

Airbus stopped building the plane in November 2011 after customers picked up more fuel-efficient two-engine models such as Boeing Co. (BA)’s 777 and the shorter Airbus A330. Adding more seats would underpin Airbus’s efforts to bolster the A340’s value in the secondary market as operators renew their fleets.

“This will revolutionize A340 economics,” Airbus Chief Operating Officer John Leahy said in a e-mail following the presentation, where engine makers Rolls Royce Holdings Plc and CFM International, a joint venture of General Electric Co. (GE) and Safran SA (SAF), also spoke to a group of about 100 people with an interest in A340 values.

The new high-density version of the A340 would compare to the A340-600 that can seat 359 in a two-class layout. The A340 can seat nine abreast in seats 16.7 inches wide, said the Toulouse, France-based aircraft maker, which has been publicly pushing for an 18-inch seat standard for long-range planes.
More Revenue

The 8 percent increase in capacity would translate to a potential $5.5 million in extra revenue per year, according to the presentation at the London gathering, which sought to assure A340 customers of the residual value of their asset.

The extra seat count would bring the A340 close to the capacity of the largest four-engine aircraft, the Boeing 747 jumbo and the A380 double decker. A handful of airlines have also boosted jet capacity, and operating economics, by cramming large numbers of economy seats onto existing air frames.

Air Canada (AC/B) squeezes 458 people into its Boeing 777-300ERs with 10-abreast seating in its economy cabin. Japan Airlines Co. seats 500 in its 777-300s, used primarily for domestic flights. The Japanese carrier used to seat 546 people on its Boeing 747-400D fleet, which it has retired.
Shrinking Demand

Demand for the A340 shrank after large twin-engine models like Boeing’s 777 won regulatory approval for the long over-water flights that were once the domain of four-engine planes. Airbus built 377 A340s, of which 359 remained in operation at the end of October.

Deutsche Lufthansa AG (LHA), Europe’s second largest carrier, is the biggest operator of the A340, with 48 still in service. The German airline said it plans to fly the aircraft for some time, and that the residual value is irrelevant for the airline.

CFM makes the turbines for the A340-300 with Rolls-Royce Holdings Plc (RR/) the sole powerplant provider for larger the A340-500 and -600 models.

Rolls-Royce may ease the terms of long-term maintenance agreements it calls TotalCare to better suit second-hand operators. Leased engines may also be provided, said the London-based company, which operates a small turbine leasing unit.

To contact the reporters on this story: Andrea Rothman in Toulouse at [email protected]; Robert Wall in London at [email protected]

To contact the editor responsible for this story: Benedikt Kammel at [email protected]


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