Brussels Airlines' fleet renewal

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NCB

Re: Replacement of SN's Avro RJ and B737 fleet

Post by NCB » 02 Aug 2010, 00:36

That is your opinion and I wouldn't exactly call it a obvious win for the E-Jets.

I see things slightly differently.
Let's play a little game and copy-paste SN's shorthaul network:

Alicante, Athens, Barcelona, Basle, Bergamo, Berlin, Bilbao, Birmingham, Bologna, Bristol, Bucharest, Budapest, Catania, Copenhagen, East Midlands, Edinburgh, Faro, Florence, Frankfurt, Funchal, Geneva, Gothenburg, Hamburg, Hannover, Helsinki, Heraklion, Ibiza, Kiev, Krakow, La Coruña, Larnaca, Leeds, Lisbon, Ljubljana, London, Lyon, Madrid, Malaga, Malta, Manchester, Marseille, Milan, Munich, Naples, Newcastle, Nice, Nuremberg, Oslo, Palermo, Palma de Mallorca, Paris, Porto, Prague, Rhodos, Riga, Rome, Seville, Stockholm, Strasbourg, Stuttgart, Tenerife, Thessaloniki, Toulouse, Turin, Venice, Vienna, Vilnius, Warsaw, Zurich.

Out of these 68 destinations, about 1/3 or 26 destinations can be described as business destinations with high-yields. All the rest are pretty much low yield, leisure, VFR and seasonal destinations.
Now, out of those 26 high yield destinations, the Q400 is within 75 minutes reach of 21 destinations.
68 destinations, 26 high yield of which 21 within 75 minutes from BRU with a Q400.
I think that SN can cover the main high-yield citypairs with A319/A320 and operate all the rest with Q400.

Take a 3 hour (2,5 hours with E190) Q400 flight BRU-Palermo. SN can sell tickets an average of 150 euro cheaper return, fill the entire aircraft, make life tough on Ryanair and make money; or operate with 10 passengers on a E170, lose alot of money and find itself in the same situation as it is now.
As I said, SN doesn't need E170 flying empty on 3 hour sectors in the winter.

SN can cover all leisure and feeding destinations with the Q400 by filling aircraft at reasonable fares, use A319/A320's on those business routes beyond an hour and wherever they need more capacity. That would be very rational as it streamlines the fleet into 2 types which further reduces cost through better leasing contracts and commonality advantages.

If you put RJ's in SN's fleet, on the short routes they are going to be too expensive to operate, the low yield routes can not be sold at attractive fares so they will fly empty in the winter, and otherwise they are going to do a job that the A319's/A320's can do better on the high yield citypairs.
SN is also hampered by Eurocontrol that requires aircraft to fly longer below optimum flight levels above Belgian airspace. No problems for Q400's but huge penalties for jets that have a higher optimum altitude.

And from 2012, emissions trading, airlines will start to pay for every gram of CO2 they generate too much.

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Vinnie-Winnie
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Re: Replacement of SN's Avro RJ and B737 fleet

Post by Vinnie-Winnie » 02 Aug 2010, 06:41

NCB,

CASM is lower on larger aircraft. Why the hell would you increase cost therefore prices on low yielding routes?

Small aircraft only work on thin high yielding routes. Other than that you either don't fly or fill the aircraft with as many paying customers as possible.

Now a BRU - Palermo is most certainly a low yielding route. better have 140 paying pax paying on average 250 euros than 70 passengers paying on average 350 euros...

I'd only introduce small aircraft is frequency is key... (therefore probs a business market)

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Re: Replacement of SN's Avro RJ and B737 fleet

Post by sn26567 » 02 Aug 2010, 11:55

There will be an interesting case of competition between a jet and a turbo-prop. Read the following article (courtesy AERBT):
CIMBER STERLING passengers on the London City – Copenhagen route will have a much faster alternative when British Airways introduces a twice daily Embraer 190 service from 12 September. Currently the route is daily with a 50-seat ATR 42. BA will offer four times the capacity with a double daily service and an aircraft twice the size of its competitor. The Embraer is also a great deal quicker than the ATR.

The introduction of the service is seen as a BA marketing move in Scandinavia from London City, a twice daily service to Gothenburg being recently announced. London City to Stockholm is currently not being served
The only important piece of information that is missing is the price of a ticket on both airlines, or, more important, the cost of a seat to the airline (because seats could be sold under their value).
André
ex Sabena #26567

NCB

Re: Replacement of SN's Avro RJ and B737 fleet

Post by NCB » 02 Aug 2010, 14:26

CASM is lower on larger aircraft. Why the hell would you increase cost therefore prices on low yielding routes?

Small aircraft only work on thin high yielding routes. Other than that you either don't fly or fill the aircraft with as many paying customers as possible.

Now a BRU - Palermo is most certainly a low yielding route. better have 140 paying pax paying on average 250 euros than 70 passengers paying on average 350 euros...

I'd only introduce small aircraft is frequency is key... (therefore probs a business market)
This is a fair question that is very interesting to study as it explains alot of things.

Small aircraft with high CASM, as you say, only work on thin high yielding routes, and also, I will add, on larger high yielding routes with frequency.
This applies perfectly to Avro RJ and E170/190.
But even though it's like that, SN are operating an entire wide range of thin low yielding routes that are only high yielding and high volume in the summer, like Palermo or Naples.

Now for further comparison, you have to know that the Q400 has a lower CASM than E170/E190, by over 20%.
Yes, it's smaller than the E190 and the same size as E170 but it's got way lower CASM, thanks to lower fuel burn, lower maintenance cost, and lower landing fees because of lower maximum take-off weight per seat (MTOW is the basis for landing fees calculation). If you want to put it on pars with an aircraft, the Q400 has about the same CASM as A319/B737-700 but if oil prices rise to 3$ a gallon which will certainly happen in the short term, then it can get close to the B737-800/A320 in terms of CASM.

Now let's say we need to operate low yield leisure route BRU-Alicante in the winter and BRU-Alicante in the summer with E190/Q400 (Alicante instead of Palermo as it is also being operated by Ryanair out of CRL):

In the winter, SN will sell the E190 at an average fare of 150€ and fill it to 40% (36 passengers) load factors. The result will be big losses. SN can sell Q400 tickets at the same fare, fill the Q400 at 52% (still 36 passengers) and be profitable.

In the summer, SN will sell the E190 at an average fare of 200€ and be 90% full (81 passengers).
If SN has the Q400, at 182€ average fare it can fill the Q400 at 100% or 70 passengers and make as much money as the E190 flight. Having less seats, it can sell the tickets at the higher yield of 220€, still fill the Q400 and make alot more money (2500€) than the E190 flight.
Even better, SN can sell the tickets at an average 130€ and operate 2 Q400 flights instead of one and make even more money, start stealing significant amounts of passengers from Ryanair. To Ryanair, the flight is only profitable if it can fill the aircraft at over 70% because of low yields and need to sell on-board. Now if SN can steal 30 passengers per flight from Ryanair and reduce its load factors on the B738 by 16%, Ryanair would be forced to either increase fares (losing even more passengers) or use any excuse (blame the Walloon government for whatever they've done) to drop the route.

The same math goes for any comparison with E170, CR7, CR9, SSJ100 or even worse CS100. The seasonal character of the business is the most important aspect of any comparison and even more so for SN that sells higher fares and has a higher cost base. If SN wants to be profitable, it must significantly decrease the burden on its unprofitable 8 months between October and May. Going for bigger aircraft is not a solution, at least not for the immediate future.
SN need to focus on beating the hell out of Ryanair and Easyjet's lurking expansion at BRU and shuffle the customers to its operations. The classic RJ's like CRJ and E-Jets are not able to take such an aggressive stand but if SN can use A319/A320 CASM between big city pairs and add frequencies with Q400, operate leisure routes with the Q400, if I were MOL, I'd look for a new place to park 10 Charleroi-based B738's.

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Re: Replacement of SN's Avro RJ and B737 fleet

Post by Vinnie-Winnie » 02 Aug 2010, 16:22

Yes but all airlines buy according to the outlook throughout the year. They don't only buy aircrafts thinking of the winter season where holiday destinations perform poorly. They buy larger aircraft, swap them around routes according to the season, and accept the fact that some routes will be very low yielding/half empty/loss making (Same way airlines accept to lose money during midday/midweek flights)

Secondly how to you justify PR wise the fact that your airplane is about half an hour to an hour slower than the competition?

i don't really know what is going to happen in terms of aircraft purchase. What I know though is that if LH transforms Brussels in some kind of relieve hub load factors are going to go up.

So it will all depend on Brussels AIrlines strategy. Fact is that any aircraft will always be suboptimal on an y given day. what you need is a fleet that can adapt to your peak demand according to certain yield criterias. The rest of the time you will have empty spaces. But better have empty spaces on a midday flight than have passengers switching from a high price ticket to a low price ticket because the price of the low price ticket was too good to be true...

So maybe low LF are not such a bad thing after all.

NCB

Re: Replacement of SN's Avro RJ and B737 fleet

Post by NCB » 02 Aug 2010, 17:33

Secondly how to you justify PR wise the fact that your airplane is about half an hour to an hour slower than the competition?
On a 1 hour block time, the Q400 will only be 5 minutes slower. Simply because the actual time the jet aircraft is going to be flying at above the Q400's speed is only 35 minutes or so.
On a 2 hour block time flight, that will further increase to 15 minutes.
On a 3 hour block time flight, it will be about 30 minutes more. SN doesn't have that many thin routes on this stage length.

Mind you, beyond 500NM, most airlines in Europe will, schedule permitting, operate jets on a more economical setting at a lower airspeed.

PR wise, the high yielding customers won't care about the 5 minutes on the 1 hour sectors, the longer sectors being operated by A319/A320. Comfort wise, the C passengers will get 2 seats for themselves and it's a very short flight. More important will be to have more frequencies for better schedules so they can reduce their actual travel time by having a flight closer to their desired time.
The customers flying longer low yielding routes won't care about being on aircraft longer, if the flight is bought at acceptable fares.

Even better, I think that there are many very thin routes that SN can operate and where there will be no competition from LCC's. With the Q400, you can actually take the customers where they need to be, instead of taking them to major airports, from where they need to take a 2 hour or 3 hour train, car, bus ride.
Rotterdam (Den Haag), Luxemburg, Lille (big catchement area), Rennes, Le Havre, Toulon (not far from St Tropez, right between MRS and NCE), Nantes, Köln, Bremen, Dortmund, Duisburg. Several UK airports come to mind, as do several airports in Poland, and the Balkans. These are all routes that are far from main international airports and are too thin to serve profitably with any RJ, even on a non-daily service. Some of these regional cities will even pay SN to establish a good link with BRU.

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Re: Replacement of SN's Avro RJ and B737 fleet

Post by cathay belgium » 02 Aug 2010, 21:24

Hi,

NCB, if I follow your way of thinking,
it sounds possible to me altough I also think that EMB will win these battle,
since E195 is already a strong member of the LH group.
Even CRJ in the waiting time for CS .
But now what I wanted to say;
If I follow your mind why didn't flyBE expand already from BRU?
They've the equipment the possibilities and they (SkyT) will fight *A on their own
territory.
Since this isn't the case yet I have strong questions about the reality for this tought.
Why wouldn't a company act if they could have great benifits in sight?

Another question;
What about the extra 'lease-time' of the actual AVRO's?
Complete out of the question?

CX-B
New types flown : A223,AN24,AW139,B737MAX8,B763nonER,DH Dragonrapide,EMB110 Bandeirante, Shorts360,Autogire MTOsport2010

regi
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Re: Replacement of SN's Avro RJ and B737 fleet

Post by regi » 02 Aug 2010, 22:01

NCB: did I really understand it right that you propose a flight Brussels-Lille?
According Viamichelin this is 129 km taking 1h17 minutes.

Nevihta
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Re: Replacement of SN's Avro RJ and B737 fleet

Post by Nevihta » 02 Aug 2010, 22:51

regi wrote:NCB: did I really understand it right that you propose a flight Brussels-Lille?
According Viamichelin this is 129 km taking 1h17 minutes.
That could be done with a fleet of Beechcrafts.

sorry couldn't resist...

Anyways, plans for fleet renewal are most probably already decided... let's hope it won't take too long.

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Re: Replacement of SN's Avro RJ and B737 fleet

Post by Bralo20 » 02 Aug 2010, 23:08

Nevihta wrote: Anyways, plans for fleet renewal are most probably already decided... let's hope it won't take too long.
And it won't include the Q400 nor other turboprops...

NCB

Re: Replacement of SN's Avro RJ and B737 fleet

Post by NCB » 02 Aug 2010, 23:42

Yes. Mainly to compete against Air France that has a Lille-CDG connection with TGV for passengers connecting further to other places. Lille has a significant catchement area of 1 million people but bad connections to main European cities and a large African community, so a Q400 feed could be justified.
It's cheaper and more convenient than to run a taxi all the way to BRU or to pay the expensive car parking.

The same applies for Luxemburg, Rotterdam.
If I follow your mind why didn't flyBE expand already from BRU?
They've the equipment the possibilities and they (SkyT) will fight *A on their own
territory.
I can only say what I know and what I think. Flybe has always avoided direct competition with Ryanair and Easyjet and where it was unavoidable, they competed with better schedules and frequency.
Flybe is a smart airline, they know how hard it is to compete directly with Ryanair and Easyjet. We just need to have a look at how SN is struggling to find evidence of the ongoing harsh competition on continental Europe.
No, instead of copying what Ryanair and Easyjet are doing very well, Flybe opted to operate the lucrative market of point to point travel out of smaller UK markets.

Flybe has one third of the amount of bases that Ryanair has, but they are all in one country, the UK.
Now for instance, take one of the few markets LGW-DUS operated by both Flybe and Easyjet and STN-DUS operated by Ryanair. Flybe daily frequencies vary from 1 to 6 frequencies a day depending on the day of the week and I just took a look, hell they are not cheap.

Why hasn't Flybe opened a base in BRU? They have not opened any bases outside the UK until now. They could still open up a BRU base in the future but I would not see the merits of doing so. They would be competing on a saturated market against SN, Easyjet and Ryanair. There are better opportunities elsewhere in Europe.
If one believes what they are saying, they want to become the third largest European LCC, using a different business model than Ryanair and Easyjet. They have the potential to do that.

To avoid losing more territory to LCC's, SN needs to do what other major airlines have done so far. Establish a strong hub now using the right equipment or risk losing the grip on its hub market. That is exactly what happened to Alitalia in Italy where Ryanair has 10 bases in one single country and Easyjet 2 large ones. Another great example is BMI that has seen its market being eaten up piece by piece by Flybe, Ryanair and Easyjet.
Now I realise that SN can't establish a strong hub using regional aircraft, but they don't have the longhaul fleet to justify buying a fleet of 30 A320's.

So clearly for me, it must be a 2 step process wherein the first step consists of making profit by using regional aircraft with the lowest operating cost and using that as a tool to massively expand long-haul and establish a strong position in Africa. Step 2 is establishing its position as a hub carrier in BRU by switching to A320 capacity, following the LX (Swiss) model and further expanding globally.

All regional jets proposals are nice, but not good enough to achieve a drastic expansion in Africa.
LH isn't going to give SN more longhaul aircraft if it can't show to be self-supportive like LX.

When you have only one wave for long-haul, going for larger aircraft on short-haul is not a solution as it will weigh too much on the non-feeding flights that will be emptier. That is one of many reasons why I would dismiss the CS100.

Yes, the MRJ would be a better alternative than the Q400 as it gives a 20% operating cost advantage over E-Jets and CRJ but it is quite a risk for an airline to base the urgent fleet renewal of half of its fleet on an aircraft in development and I think that should SN should go for a low capital solution and for the lowest CASM, as the MRJ's higher capital cost will undermine part of its lower operating cost.

We'll see what it'll be but I will only be positively surpised if it's going to be what I want it to be.

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Re: Replacement of SN's Avro RJ and B737 fleet

Post by tolipanebas » 03 Aug 2010, 10:49

NCB wrote:We'll see what it'll be but I will only be positively surpised if it's going to be what I want it to be.
Don't hold your breath then, because I can already give it away to you: your plan is not even near the final outcome, not only because SN's management is of a completely different opinion than you, but far more importantly even, so is LH's management! But hey, they are probably just idiots too, right? :lol:

SN needs more seats on average per medium haul plane -not less like you constantly say- in order to considerably reduce unit costs. Going for smaller planes is doing exactly the opposite, thus distroying your bottom line as a network carrier!

Luckily LH is not as ignorant as you are, as they have understood that the only good way to reduce unit costs for a network carrier, is by increasing the capacity of the planes used on the network and thus put more seats available to connecting pax, without eroding the equally important point-to-point capacity.

This is also the strategy LH wants SN to follow, something your proposals constantly go against on all fronts. As such they obviously don't stand a chance as they doesn't fit the agenda of LH. Try again.

BTW, in essence, the concept you propose has been followed by OS in the past already, constantly cutting back the offered capacity on many routes numerous times in order to artificially up the loadfactors and profitability of the route, until they were operating the smallest planes on the highest demand routes, thus having the highest unit costs and being completely uncompetitive!
The obsession with loadfactors is now formally marked as one of the main reasons of them running into serious problems: its the very first thing LH pointed at when they arrived at VIE to turn the tide around: "stop worrying about loadfactors and certainly don't artificially up them by cutting back capacity: rather reduce your unit costs, amongst others by increasing the capacity where possibly, by putting more seats in your planes (still remember that discussion we had, where history provedf you wrong too, in the mean time?) or by using bigger planes even and you will become far more competitive in a natural way, leading not only to higher load factors, but also to higher pax numbers!
Last edited by tolipanebas on 03 Aug 2010, 11:05, edited 1 time in total.

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Re: Replacement of SN's Avro RJ and B737 fleet

Post by RoMax » 03 Aug 2010, 10:58

tolipanebas wrote: SN needs more seats on average per medium haul plane -not less like you constantly say- in order to considerably reduce unit costs. Going for smaller planes is doing exactly the opposite, thus distroying your bottom line as a network carrier!

Luckily LH is not as stupid as you are, as they have understood that the only way to reduce unit costs for a network carrier, is by increasing the capacity of the planes used on the network and thus have more seats available to connecting pax, without eroding the equally important point-to-point capacity. This is the also strategy LH wants SN to follow, something your proposals constantly go against on all fronts. As such they obviously don't stand a chance as they doesn't fit the agenda of LH. Try again.
This is completly correct. I've said it already before, but it seems you (NCB) just don't read it. Look at OS, always trying to reduce unit costs by operating smaller aircraft. The result was decreasing pax numbers and increasing losts. Since LH has conrol over OS, they took the decision to phase out the CRJ200's and the smallest Fokkers. The result is that the amount of pax is increasing seriously, and OS is getting out of the loss (altough that will take some time, because they had seriously losts).
Same with LH itself, phasing out 50- seaters. LX also phased out it's smallest aircraft when LH took control over them in 2006.

And that's just what's going to happen with SN. SN will get something like E170 (A JET!!) but also something like E195/CS100 wich is bigger than the RJ100. And the 737/A319's will not be replaced by anything smaller either.

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Re: Replacement of SN's Avro RJ and B737 fleet

Post by sn26567 » 03 Aug 2010, 11:10

Hey guys, no need to be harsh on NCB. He is developing interesting ideas, even if most of you don't agree. And everybody is welcome to share his/her opinion in this forum without being aggressed.

Thanks for keeping this forum friendly!
André
ex Sabena #26567

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tolipanebas
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Re: Replacement of SN's Avro RJ and B737 fleet

Post by tolipanebas » 03 Aug 2010, 11:24

sn26567 wrote:Hey guys, no need to be harsh on NCB. He is developing interesting ideas, even if most of you don't agree. And everybody is welcome to share his/her opinion in this forum without being aggressed.
Actually, he's not developing 'interesting' ideas at all, he's proposing old school solutions which have been tried many times before, and have repeatedly failed.

Looks like he's stuck in early 2000 or something, when high load factors were the mantra of the day and airlines all over Europe did everything possible to achieve the highest load factors possible, amongst which often the easy trick to simply downsize the plane...

Today this matra is over (at least at the well-run places) and its all about lowering unit costs, often meaning increasing capacity, as this leads to a natural growth of loadfactors due to increased competitivity and more importantly also a growth in pax numbers, something the old school solution of cutting back didn't, to the contrary even!

Since NCB is constantly claiming to be such an expert and a Mr Know-it-all, there's nothing wrong in pointing out how much old shool his ideas are, is there?

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Re: Replacement of SN's Avro RJ and B737 fleet

Post by fcw » 03 Aug 2010, 11:33

A couple of questions:
- Is increasing capacity a good idea if you have a LF of about 60%?
- Wouldn't it be better to increase frequencies, as LF increases with increasing frequencies?
- Increasing capacity also means decreasing yield/seat, especially if you can't fill them.

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Re: Replacement of SN's Avro RJ and B737 fleet

Post by tolipanebas » 03 Aug 2010, 11:53

fcw wrote:- Is increasing capacity a good idea if you have a LF of about 60%?
Adapting to a smaller plane and artificially increasing your loadfactor is definitely NOT a good option for a network carrier, as history has shown repeatedly.
fcw wrote:- Wouldn't it be better to increase frequencies, as LF increases with increasing frequencies?
Frequencies are good on Europe; what needs to be done is expanding the long haul network, so there are more connecting pax on the European flights: since you don't want them to take the limited number of seats of the point-to-point pax, you need to increase your seating capacity as a network carrier.
fcw wrote:- Increasing capacity also means decreasing yield/seat, especially if you can't fill them.
If the capacity increase is aimed at the connecting market, your yield on point-to-point traffic needn't change. In fact, capacity increases have positive effects on the yield of those ptp tickets too, as the unit cost is reduced, remember?

The only tricky thing is, you need to have sufficient connecting pax to play this game and so far SN was weak on this front. The extra A330, STAR alliance membership and LH codeshares are 3 important factors allowing them to start playing the game of the big boys and things will get more interesting over the next years, as they further expand on long haul, so reducing the seating capacity of the medium haul fleet really is a poor idea. T

hey are going to order new planes for the next 15 years remember, not for the past 10 as some seem to think! :roll:

NCB

Re: Replacement of SN's Avro RJ and B737 fleet

Post by NCB » 03 Aug 2010, 12:37

SN needs more seats on average per medium haul plane -not less like you constantly say- in order to considerably reduce unit costs. Going for smaller planes is doing exactly the opposite, thus distroying your bottom line as a network carrier!

Luckily LH is not as stupid as you are, as they have understood that the only way to reduce unit costs for a network carrier, is by increasing the capacity of the planes used on the network and thus have more seats available to connecting pax, without eroding the equally important point-to-point capacity. This is the also strategy LH wants SN to follow, something your proposals constantly go against on all fronts. As such they obviously don't stand a chance as they doesn't fit the agenda of LH. Try again.
Medium haul planes. I guess you are talking about the A319/B737 segment.
Well, you are correct, and this is known for a fact that SN needs to upgrade to A320 capacity on the larger medium haul fleet. Simply because then they can offer better fares to their passengers and compete with Ryanair and friends on the large citypairs.

Now I am just wondering, what does the mid-haul segment have to do with RJ replacement?

Because RJ replacement is a totally different story and clearly, bringing in a fleet of CS100 is not the solution.
Sure you have more seats, but it does not make economical sense for SN. More seats to fill, for an airline that fills RJ's at 60% is not a workable solution, short, mid or long term.
Have you even bothered to check data on the CS100? It's heavier than equivalent aircraft, because the baseline aircraft of that family is the CS300. Now if SN takes the CS100 for its entire fleet renewal, I predict disaster for 5 reasons:

1. Too high capital cost, will eclipse fuel burn advantage over the Avro RJ
2. Too large, equivalent to E195/CRJ-1000
3. Heavier than equivalent aircraft, hence lower fuel burn advantage
4. High risk. SN can not base its fleet renewal plans on an aircraft in development, that is looking at potential delays in delivery
5. Being a lauch customer requires additional investments.

About the fleet renewal plans, unless you are top management you are only hearing rumours. And yes the rumours are saying CS100, E190, Sukhoi, etc... but the real answer is known only to a select few who will keep their lips sealed as the negotiations with manufacturers are still ongoing.
The CS100 only makes sense if SN creates a second wave to Africa with a miraculous 300% expansion of capacity out of nowhere and cuts many of the thin long short-haul routes, reduces frequency on many destinations.

Now I am talking about a lower cost per seat solution that would enable SN to actually increase capacity without compromising profitability, by offering more frequencies.

What you just offered has absolutely no value, it's just rethoretical matters that have little substance and insults that show your lack of dignity. Perhaps the idea bothers you because you don't want to become a turboprop driver.
I think that there is less shame in working for a thriving company that offers real career opportunities than for the same company that is stuck fighting for an edge.

To answer Mr. Boeing, you are not comparing the CRJ1/CR2 with the Q400 are you?
A CR1/2 or the ERJ135/145 can never, ever be used to generate a profit on its own. In theory, you need to fill them to 90% load factors at good yields to break even. Most airlines have used them to feed long-haul flights and relied to make more profits to cover the feeding cost.
Now talking about OS, LH has thrown out everything except the Fokker 70/100 and the Q400's. The Fokker's replacement will probably be ordered together with the SN replacement.

SN will get something like the E170/E190, which will be nice and beautiful and I will be very glad. Who cares if the airline makes any money anyway? Like there was anything to learn from the Sabena saga of 10 years ago. That will never happen again.

A question to you, Mr. Tolipanebas. How do you expect SN to fill the CS100 without losing on yields? What makes the CS100 so interesting to you? I don't claim to know more than everyone, I just publish data on my personal research, without divulging any internal information or data gathered through that channel.

By the way, SN26567, thank you for your rational intervention.

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tolipanebas
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Re: Replacement of SN's Avro RJ and B737 fleet

Post by tolipanebas » 03 Aug 2010, 13:38

NCB wrote:I am just wondering, what does the mid-haul segment have to do with RJ replacement?
Are you serious?

OMG, the RJs ARE medium haul planes just like the 737/A319... or do you think BRU-MRS is shorthaul whereas BRU-NCE is medium haul, just because it is operated by a smaller plane?
NCB wrote:unless you are top management you are only hearing rumours. And yes the rumours are saying CS100, E190, Sukhoi, etc... but the real answer is known only to a select few who will keep their lips sealed as the negotiations with manufacturers are still ongoing.
Some people hold positions which allow them to have privileged contacts and as such are able to sense the pulse, so to say... I can tell you there are currently no negiotiations with manufacturers as SN is still evaluating the different options to choose from, none of which comes even close to what you have been floating around here, that much I can tell you.
NCB wrote:The CS100 only makes sense if SN creates a second wave to Africa with a miraculous 300% expansion of capacity out of nowhere and cuts many of the thin long short-haul routes, reduces frequency on many destinations.
We're not talking about the best fleet TODAY, but the best fleet for 2015 to 2025+, remember?
By the time the first new plane arrives, SN's long haul network will have grown (so much is no secret) and the STAR hub in BRU will have matured a fair bit too. Just catapult yourself 4 years ahead in time and imagine the most conservative expansion scenario: SN is operating 7 A330s of their own, there's an evening flight to NY (in codeshare with a US airline), ANA is serving NRT daily in the evening and there's another link to South East Asia by a STAR partner. On top of that, some more European STAR airlines are feeding through BRU....

Still so sure the CS100 is such a crazy idea, knowing in the next decade things will only go up from here?

Not saying the C-series will be the final choice, but simply discarting it as you do, is wrong.
Now, the idea of yours to operate with a large fleet of Q400s however has been shoved aside right away, precisely because of the above...
NCB wrote:I am talking about a lower cost per seat solution
You don't get it, don't you? There IS no lower unit cost from operating small planes!

Sure, CASM goes down if you operate a small turboprop iso an A320, but that is just half the story really, based on direct operating cost: the overhead costs, network cost, alliance membership costs and many more all remain the same however and need to be split out over less seats, thus driving the UNIT costs up, hence making it very hard to compete against competitors really, as the OS case has demonstrated.

CASM is only a part of the much wider UNIT COST and this is ultimately what it is all about for a network carrier: there's an elementary difference between a LCC and a network carrier and that difference is in the fact there's a far wider gap between CASM and UNIT COST at the latter. failure to understand that is proof of misunderstanding the airline you're talking about and a guarantee for disaster!
NCB wrote:Now talking about OS, LH has thrown out everything except the Fokker 70/100 and the Q400's.
.

They have? :shock:

There are getting more A320s, are increasing the seat count throughout the ENTIRE fleet by using the slim seats (something which SN will start doing too, BTW; another proof they'll follow the same path as the other LH babies) and have shifted planes around on their network to operate larger planes throughout: routes that were CRJ have gone back to Fokker and routes that were Fokker have gone to Airbus, wherever possible.
The fact they still operate Q400s is because they have short haul routes where there's no elasticity meaning the game of increasing seatoffering doesn't work there...

You really have no clue what you are talking about, that much is for sure, now! I suggest you start doing some reading on ELASTICITY, asap.
NCB wrote:I don't claim to know more than everyone, I just publish data on my personal research, without divulging any internal information or data gathered through that channel.
Not only is that a contraction in terms, but also do I know it to be untrue for the simple reason that I check it off against what I know to be going on right now and as I have said many times before, your plan simply doesn't match reality!

regi
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Re: Replacement of SN's Avro RJ and B737 fleet

Post by regi » 03 Aug 2010, 14:39

So to repeat it : NCB sees a connection Brussels - Lille feasable.

The reasons? Because the parking is expensive and because there is a TGV connection between Lille-CDG and because the drive by taxi between Lille-Brussels is expensive . Yes, that is all true. But who takes a cab drive between Lille and Brussels? And every airport parking is expensive - besides of Gbadolite or Stanley ( Falklands) . And there is a TGV connection between Paris and Brussels.
To your information NCB: Lille has a large African community as you stated. Let us specify it: Northern African ( Morroco, Tunesia, Algeria ) . So we should organise a Q400 flight to Brussels to put them here at Brussels on the flights to Northern Africa?
If that is your argument, I have some other great ideas to think about: Lille has the second largest community in France of Laotian, Cambodian and Vietnamese besides of Paris. So, yes, let us steal them away from CDG as well. All in the same Q400 towards Brussels, and than onwards to...euh...Asia I suppose? Oh, there are no direct connections between Brussels and Hanoi/HCM city, Phnom Pehn and Vientiane? No problem, that is just 1 phone call towards the respective airlines and they will send their long haul planes ( Lao Air, great long haul planes...) immediately towards Brussels. It is all that simple. If those airlines don't do it, SN will do it with the A320 . Aha, was it not your idea to use narrow bodies for long haul operations towards Africa? Just 2 fuel stops towards Indochina. No problemo. Great LF.

No NCB, I don't ridiculise you. I just follow your ideas. I don't even discuss it, I just acknowledge exactly the same what you say.

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