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Home >> Forum >> BA TO GROUND OLDER 737,767 & 747 Civil aviation forum
BA TO GROUND OLDER 737,767 & 747
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Message of captain bill - Sent 20 May 20:04 |
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Willie Walsh has announced that BA will ground some of the older 737, 747 and 767s from October 2008 due to rising fuel costs. This is the first time BA have done this and it just might be a trend that other airlines will follow.
We know that Ryanair has done this over the past winter and are expected to lay up even more aircraft winter 2008/09.
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Message of FLX - Sent 21 May 6:25 |
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The capital cost(e.g. depreciation) of these older jets and the opportunity cost(e.g. Operating profit fm low-yield winter holiday charters) flown by these planes must be so low now that it's cheaper to park them than to fly them......so sad. Parallel to Willie Walsh, I find myself leaving my old car parked more often than driving it lately....
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Message of SJR - Sent 22 May 23:27 |
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Yet they cannot look at other options for usage of these aircraft. For example short term lease or services from other parts of the country although we all know BA wont even consider the second of these options because they believe the whole market in the United Kingdom is in the southeast. Maybe they will reconsider the rest of the country once Lufthansa (BMI) starts eating into their market.
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Message of captain bill - Sent 22 May 18:40 |
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Message of EI-DUB - Sent 23 May 0:10 |
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Have FR cited, or tried to justify this one??
Only because I remember last winter, when they grounded 7 planes, they tried to cite BAA airport charges as the reason, and that it was 'cheaper' to park the planes rather than use them. Of course having enough pilots and indeed passengers didn't come into the equation at all according to them!!! I'd say 20 planes will rack up a few nice parking fees for M O'L next winter!!
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Message of captain bill - Sent 23 May 6:35 |
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The have said it is due to the high price of oil AND quote a downturn in passenger numbers end quot. They went on to say it would be more cost effective to keep 20 airliners on the ground than to fill them full of fuel and only half fill them with passengers.
Are we now in the twilight zone ?
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Message of FLX - Sent 23 May 11:49 |
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We all know fuel cost represents the lion's share in any airline's total op cost and even more so in any LCC. LCC may hv low cost advantages in many op aspects but they hv none in fuel cost - they fly pretty much the same type of jets using similar amount of fuel on any given sectors as mainline carriers(At least until FR tries agressive/desparate/illegal tactics such as enforcing their pilots to switch-off engines completely during descend....).
Oil prices hv risen by about 100% in 12mths. What type of industries in the world can easily survive a 100% jump in 1 of their major costs of doing business in just 1 financial yr? I'm scratching my head as I really don't know any. Try to pass more of this cost increase onto the consumers is equivalent to commercial suicide/seeking bankruptcy. Some pax are already screaming @ the airlines whenever they try to raise existing fuel surcharges and/or fares while more are giving-up personal discretionary flying(e.g. leisure travel) altogether(Will U seriously reconsider your annual Malta, Carribean, Hawaii or Bali family vacation plans if total airfare is double what U used to pay?).
I'll venture to say that even with plenty of crew+staff willing to take pay-cuts(Nearly impossible in any airlines) and every flight is full of pax paying full fare(Nearly impossible for the type of pax FR serves), airlines will be lucky to breakeven in the nex 12mths....all thanx to the expected furher increase in oil prices.
If I hv enough cash on hand, I'll bet on Brent Crude Oil Future @ US$200 per barrel by next easter and hedge against airline stocks. 9yrs ago, it was about US$20 per barrel - an increase rate easily outrun any inflation in airline labor cost, maintenance cost, aircraft cost and airfare:
http://en.wikipedia.org/wiki/Image:Oil_Prices_in_dollar_and_euro_1998-2007.gif
We're not in the twilight zone now. We're in a steep climb zone now.
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Message of captain bill - Sent 24 May 8:58 |
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Yes your comments are spot on FLX. If any of you read the Airliner Magazine you will have seen the new section about the Desert Air Parks where hundreds of modern airliners are now parked up due to the high costs airlines are facing. It is quite worrying and we just wonder where it will end.
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Message of FLX - Sent 26 May 15:09 |
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Based on past history in times of commercial aviation downturns, these parked jets will eventually return to service. If high oil prices persist, many of these jets will change hands(i.e. Sold-off, break leases, etc.). I speculate that many of them will re-start their flying career in Asia(Especially India+China) as airlines there are just dying to get their hands on more jets @ discount prices. Unlike their western counterparts living in <snail> growth mkts cannibalizing each other, many Asian carriers can survive on razor thin margin due to gigantic traffic volume+double digit annual growth.
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