American Airlines pulls the trigger on mega 787 order

American Airlines and Boeing announced a firm 47 strong order for the 787.  The order consists of 22 787-8s which will start arriving in 2020 and 25 787-9s which will be delivered starting in 2023.  These airplanes will be used to replace the 767-300ER, A330-300, and older 777-200ER thus simplifying American's widebody fleet.  The order includes another 28 options for the 787.

American Airlines will cancel the order for 22 Airbus A350 that was ordered by US Airways in a pre-merger deal.  American is also deferring deliveries of 40 737MAX airplanes that were to be delivered between 2020 and 2022.

While this is a firm order what is unclear is if this is an exercise of 58 787 options that American Airlines held as part of their original order.  Boeing will only confirm that the new order is firm and booked.  If the two orders were taken as separate then it would mean that American Airlines order (firm + options) 175 787s which doesn't seem realistic even for an airline as large as American.  A more reasonable conclusion is that the new order is a partial exercise of the 58 options plus adding more options for future replacement and growth.

Currently American's widebody fleet (not including the 787) is made up of the following:

A330-200 - 15
A330-300 - 9
767-300ER - 23
777-200ER - 47
777-300ER - 20

Excluding the 77-300ER which are young and should be in their fleet for years to come, the total near term widebody replacements that American will need is 94 airplanes (encompassing all the A330, 767 and 777-200).  By my reasoning, American has orders for 93 787s - 47 firm new order, 7 firm current order, 39 options (11 current order options + 28 new order options).  This will be enough to simply their widebody fleet to just three types by around 2026 or so the 777-300ER, 787-8 and 787-9.  It is possible that American can use the 39 options for the 787-10 (or any future improved model of the 787).

This order is a shot in the arm for the 787-8 whose orders have been lagging as of late as many customers have been opting for the larger 787-9.  In the futrue the 39 options will probably be used for A330-200 replacement (787-9) and 777-200ER replacement (mix of 787-9 and 787-10).

With this booked order, Boeing now has 1366 order for the 787 (440 787-8, 755 787-9 and 171 787-10).

Here's the text of Boeing's Press Release:

Boeing, American Airlines Sign Major Order for 47 787 Dreamliners

World's largest airline to more than double its Dreamliner fleet

Boeing and American Airlines today announced the world's largest airline will more than double its 787 Dreamliner fleet with a new order for 47 of the super-efficient airplane plus 28 options. The 47 787s are valued at more than $12 billion at list prices and makes American Airlines the largest 787 customer in the Western Hemisphere.

American originally ordered 42 787 Dreamliners and has been using the airplanes' tremendous fuel efficiency and superior passenger amenities to open new routes around the world, including Asia Pacific and Europe, and boost its network efficiency. While American still has more airplanes on the way from its initial order, the airline is buying the additional Dreamliners – 22 787-8s and 25 787-9s – to further modernize and expand its fleet.

"We are extremely honored that American Airlines, is deepening its commitment to the 787 Dreamliner. This new order is a powerful endorsement of the 787 family's unique passenger appeal and unmatched ability to help airlines open new routes and grow profitably," said Boeing Commercial Airplanes President and CEO Kevin McAllister.

Built with lightweight composite materials and powered by advanced engines, the Dreamliner family lowers operating costs by more than 20 percent compared to previous airplanes, and nearly 10 percent compared to today's competing jets.

American becomes the latest airline to place a repeat order for the 787 Dreamliner. More than half of the program's 71 customers have done so, which has helped the 787 program achieve more than 1,350 orders to date.

"We are showing again and again that the 787 Dreamliner is the champion in its class. The airplane's tremendous value proposition explains why it has become the fastest selling twin-aisle jet in history," said Ihssane Mounir, senior vice president of Commercial Sales & Marketing for The Boeing Company. "And when we match the Dreamliner with Boeing's suite of services, it is a combination that delivers unbeatable value for our customers."

Boeing's Global Services division provides American Airlines with efficiency tools such as Airplane Health Management and Toolbox, which help the airline improve operational performance and improve dispatch reliability.

The 787-8 Dreamliner can fly 242 passengers up to 7,355 nautical miles (13,620 km) in a typical two-class configuration. The 787-9, a stretch of the 787-8, can fly 290 passengers up to 7,635 nautical miles.

About Boeing and American Airlines' history

The relationship between Boeing and American Airlines spans over 80 years. Some of the key shared milestones include:

• June 1936: American becomes the first to fly the Douglas DC-3 in commercial service
• January 1959: American uses the Boeing 707 to offer the first coast-to-coast jet service
• March 1961: American is the first in-service with the Boeing 720B
• July 1971: The first DC-10 delivery goes to American
• May 2015: American flies its first revenue flight with the Boeing 787 Dreamliner.

Boeing Achieves 600th 787 Delivery

On September 26th, Boeing delivered the 600th Dreamliner coming exactly 6 years and 1 day after the first 787 was delivered to ANA (a 787-8) on September 25th, 2011.  As far as I can ascertain, the 600th aircraft was also a 787-8 for British Airways which is ZA458 (LN 609, G-ZBJI).  There wasn't any announcement or celebration recognizing this milestone but to deliver 600 airplane in 6 years is quite notable for a widebody aircraft program and especially so for the 787 which had so much trouble in the early years.

Orders seems to be picking up as mentioned in previous posts with Turkish Airlines and Malaysia's order for the 787.  There is still a chance that Dubai-based Emirates can announce a 787 order at November's Dubai Air Show and I also received word that EgyptAir will be ordering the 787 (no word on numbers or version).  EgyptAir's possible order is intriguing as they have 10 A330 series aircraft that would be ready for renewal.  The 777-300ERs are fairly new but they just retired the 777-200ER so they could possibly use the 787-10 and 787-9 to replace the 777-200ER and A330 (both -200 and -300).  If an order from EgyptAir is close I wouldn't be surprised to see it drop at Dubai as well.

I'm still waiting to hear about Garuda Indonesia's 30 x 787-9 order to be finalized.

Lastly, Boeing is celebrating the 1 millionth passenger flight of the 787.  They released a video commemorating this feat below:

Did AMR order more 777-300ERs?

Today AMR detailed the breakdown of their huge A320 order (they're converting the order of 130 current generation A320s into a mix of current gen A319 and A321).
AMR's Press Release
However what is interesting comes at the end of press release. In the last paragraph, AMR states that they have orders for 15 777s that are to be delivered between 2012 and 2016. Looking at Boeing's O&D web site shows that AMR has orders for 7 777-300ER as well and 6 777-200ERs (left over from the order placed in the 1990s). I don't think that these 6 777-200ERs will ever be delivered to AMR.

Interestingly enough Boeing booked an unidentified order last week for 8 777s the version is unknown until Boeing releases it's orders for the month in early December. However there is some confusion if this 777 order is for American Airlines or Singapore Airplanes which had announced an order for 8 777-300ERs. Boeing did book another order for 8 777-300ERs also in September, 2011 so it is possible one of these orders is for Singapore Airlines and the other is for American.

787 Test Fleet exceeds 800 test flight hours

Boeing has amped up the flight test program for the 787 program in recent weeks. The program has been lagging in the the number of flight hours flown but Boeing has certainly stepped up the flight test in terms of the number of sorties flown as well as the number of hours flown during each sortie.

In the last one week (May 17th to May 23rd inclusive) the 787 test fleet amassed just a shade under 120 flight hours. During that week of flying ZA004 flew a 12 hour and 30 minute NAMS mission which is the longest 787 flight to date. Also during that time, the test flight achieved over 25% of the 3,100 flight test hours that the fleet will fly. The grand total now stands at 824 flight test hours spread over 265 sorties. They are one third of the way for the certification of the Roll Royce Trent 1000 powered aircraft.

Boeing will need to maintain this tempo over the next 6 months in order to achieve the certification of the airplane prior to first delivery in December.

Lastly, Saj Ahmad is making a case for the 787-9 to be a replacement for the 777-200 and 777-200ER aircraft and a direct competitor to the A350-900 now that the Boeing is close to finalizing the design with weight saving improvements in the aircraft to boost it's range while improving fuel burn. More over, Saj says that Boeing will identify more improvements in the 787-9 that will move it's range beyond 8,150 nm and may even be a replacement for the 777-200LR. Read on:

Fleetbuzzeditorial.com - On the 9

777NG possiblities

One of the most important decision facing Boeing is what to do to respond to the A350. Specifically, what will Boeing's answer be to the A350-900 and the A350-1000. The A350-800 is sized for the 787-9 market (both carry roughly the same number of passengers).

Airbus is targeting the 777-200 sized market with the A350-900 and the 777-300ER market with the A350-1000. Boeing is waiting to see what Airbus does with these two models before deciding on a future improvements on the 777 or an entirely new model in this class.

From my discussions it seems that Boeing is leaning towards a package of extensive improvements of the 777 line. These improvements may include weight saving measures throughout the aircraft, a new composite wing, an external re-profiling of the exterior lines and improvements in the GE90 using experienced gleaned from the GEnx program. The last proposed improvement is addressed by Saj Ahmad in an article he wrote:

Engines May Hold Key to Future 777

At the end of the day it does seem that Boeing is in the driver's seat because it can respond to the threat of the A350 with a lot of flexibility.

UA/CO Merger - My take on it's future fleet

With so much to take in with the UA-CO merger here's my quick take on their fleet composition...at the end of the day United is going to have a mix fleet of Boeing and Airbus. They'll keep the 787NG and the A320s in their fleet and I expect that all the current narrowbody orders will be kept intact.

I do think however that between the two fleets there will be a change in the widebody orders that are currently on the books.There are still 3 777-200ERs (for CO) as well as the the 787s and A350s:
3 x 777-200ER (CO)
36 x 787-8 (25 UA and 11 CO)
14 x 787-9 (CO)
25 x A350-900 (UA)

I do think that there may be too many widebodies on order here for both carriers combined and thus some part of this total order is going to be cancelled. Given that the 787-8 is going to be the prevalent type (CO/UA will be taking delivery starting next year), I think the A350 order will be cancelled and maybe some 787-8s. I think the new UA will be taking at least 25 787-8 and all the 787-9. They may even opt for more 787-9s.

As far as the narrowbodies are concerned. Look for UA to continue to take delivery of the remainder of the 737/A320 orders but after that the airlines is going to wait and see what both manufacturers turn out in terms of the either the re engined narrowbody or next gen narrowbody. UA might even opt for the C-Series.

Does flying on an A380 mean lower fares for passengers?

When Airbus started marketing the A380, the argument made by some is that because you're packing so many people into a more efficient aircraft (for it's size) that air fares should go down. Well I wanted to to see if that was true. When Emirates started running it's A380 from Dubai to JFK direct it was was hard to compare air fares as there wasn't any competition on that non stop route (unsurprisingly Emirates reallocated that flight to the Dubai-Toronto route).

Now that Air France is on the verge of starting a Paris-New York flight on an A380, it does give this blogger an opportunity to comparison shop the airfares.

For my comparison I kept a few things static across the different carriers I looked at: Flying out December 15th and returning December 22nd. Air fare is the lowest for a single adult.

The comparison would be against AFoo7 (outbound to CDG) and AF006 (inbound to JFK). Both these flights are on the A380.

The total air fare for this flight (from the Air France Web Site) is $824.10.

I compared that against the following Air France flights between JFK and CDG:
AF007/AF006 (A380-800) - $824.10

AF023/AF022 (777-200ER) - $781.10

AF011/AF010 (777-200ER) - $886.10

AF009/AF008 (777-200ER) - $762.10

The following American Airlines Flight between JFK and CDG:

AA044/AA045 (767-300ER) - $679.00

The following Air France flights between Newark Liberty (EWR) and CDG:

AF019/AF018 (A330-200) - $885.10

The following Continental Airlines Flights between EWR and CDG:

CO056/CO057 (767-400ER) - $680.00

CO054/CO055 (757-200) - $680.00

Now a couple of things. This does not necessarily mean that the A380 flight is more expensive to operate on the New York - Paris route just that the air fares that the paying public pay is more expensive compared to most of the other flight options flown on older equipment. Indeed the A380 flights is the third most expensive in the New York-Paris market out of the 8 daily non stops. One explanation is that the other two Air France flights AF011 - 9:45PM and AF019 - 7PM are prime time flight as is AF007 - 7:10PM. CO54 leaves at 8:45PM also prime time while AA044 leaves at around 5:50PM a little before the prime time flight hours to Europe. Also I did not include Delta as they code share their Paris flights on Air France and the air fares are the same.

What about across the Pacific?

Ok to make sure that I wasn't seeing things, I did a similar comparison between Sydney, Australia and LAX. I compared the fares on QANTAS flight using the A380 (QF012/QF011) vs flight offered by QANTAS (on a 747-400) and it's competitor. I assumed in all cases that departure date from LAX on Nov. 25, 2009 and returning from Sydney on Dec 2, 2009. The airfare is for a single adult roundtrip on non stop service. Here are the results:

QANTAS Flights:

QF012/QF011 (A380-800) - $1913

QF108/QF107 (747-400) - $1404

NOTE: QF012 departs LAX at 10:30 PM and QF108 departs LAX at 11:45PM, a difference of only 1h hour and 15 minutes but a difference in price of over $500!!

VAustralia Flight:

VA002/VA001 (777-300ER) - $844.10

This flight departs LAX at 8:10PM.

United Flight:

UA839/UA840 (747-400) - $894.10

This flight departs LAX at 10:17PM

Delta Flight:

DL17/DL16 (777-200LR) - $2635

This flight departs LAX at 10:50PM

Of the five round trip flights analyzed here, the A380 flights is the 2nd most expensive with the Delta flights flown on a 777-200LR being very expensive (by over $700). But very interestingly is that a QANTAS flight that leave an hour and fifteen minutes later is over $500 less in air fare! If I were going to Australia and trying to save some dough well the choice is clear and I would take the QF108 flight (if I am so intent on flying the Qantas product).

In summary the hype of the A380 for the paying passenger really doesn't live up to the reality on the competitive routes. Qantas even beats it's own pricing on one of its most lucrative routes as does Air France when you compare the A380 fares vs the non A380 fares in the same market. The A380 doesn't deliver value to the flying public.

787 Landing Gear Test and new 787 order coming soon?

Image Courtesy of Boeing

Dreamliner 1 started landing gear tests 3 days ago (August 9th). This is a major milestone confirming that the electrical, hydraulics and avionics systems are working together. Initially each gear (left main, right main and nose) were tested individually and then all were tested together. The gear swing tests is top replicate how the landing gear would work as if in actual flight. In order to do this, Boeing jacked the airplane off its landing gear. These tests will continue for the next few days presumably also testing the opening and closing of the landing gear doors as well.

Jon Ostrower is also reporting that Boeing will have a video available of the gear tests available soon. I'll try to post it here (once I've figured out how to do that)!

UPDATE: The video and more pics of the gear swing is here. Boeing even got some amazing footage inside the wheel well as the gear is retracted into it.

New 787 Customer?

In other 787 news, I learned from multiple sources that Boeing will reveal a buyer of 23 787-8s as early as next month. Boeing booked a 23 order from an unidentified customer back in January of this year. Since this order was booked, speculation has been rampant on the web that it must be a current customer who has already purchased the 787 and has a large number of options that they can exercised. Air Canada (who has 23 unexercised 787 options) became the prime suspect. The buyer was not revealed at Farnborough (I guess they didn't want to compete with all the other news coming out of the air show) but I have since learned that this order may be for a new 787 operator. I've also learned from sources that the customer is NOT a North American or European customer. One source told me that it probably is a company that is not subject to regulatory fillings where large material purchases such as 23 787 would have to be disclosed.

So who can it be? Well it can be an Asian, Middle Eastern or South American customer in my opinion. Those are the only regions of the world that have airlines that don't have to reveal this purchase in regulatory filings in addition to being able to afford to buy a large number of widebody aircraft and who has not previously purchased the 787. From these regions we could probably look at airlines like Thai, TAM, Emirates, Garuda Indonesia, Malaysian or even Iraq Airways (with the help of US govt. loans or the $49 bn surplus the Iraqi govt. has). One source speculated to me that TAM is going to take delivery of 4 777-300ERs in September and wouldn't the delivery ceremony make a great opportunity to announce a TAM order for the 787. This is a company that has already bought 12 A350-800, 10 A350-900 and 15 A330-200. The 787-8 would be a great size for TAM for which Airbus' only competitor in the 787-8 size category is the A330-200 (the A350-800 competes with the 787-9 and the A350-900 would compete with the 777-200ER and the proposed 787-10) and the 767-300ERs that TAM recently leased out.