Leeham News and Analysis
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Leeham News and Analysis
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- Pontifications: Boeing “transparency”–not so much. April 9, 2024
- Airbus charges and write-offs since 1999: more than €33bn April 8, 2024
LCC changes face of long-haul
By Bjorn Fehrm
21 September 2016, ©. Leeham Co: Norwegian has announced that it has now flown its three millionth passenger on their long-haul network.
Figure 1. Norwegian Air Shuttle long-haul 787. Source: Wikimedia.
Norwegian first launched low-cost flights from Scandinavia to the U.S. in May 2013, followed by services from London to the US beginning in July 2014. Today, the airline offers 37 nonstop routes between Europe and the U.S. with a steady load factor of 90 per cent or more – in August this year, Norwegian’s long-haul flights achieved a 96 per cent load factor.
As we wrote last week the carrier will augment this network with the arrival of the Boeing 737 MAX 8 next spring. Norwegian has now obtained a UK Operating License which allows the airline access to markets in Asia, Africa and South America. With the MAX 8 and the 787 Norwegian will have a powerful fleet which can operate both on thin long-haul destination as well as larger ones.
Southwest Airlines, Ryanair and JetBlue is also eyeing long haul when they get their longer range 737 MAX and Airbus A320neo. Add to that the established AirAsia X and Jetstar are now on a steady long-haul expansion. The world-wide long-haul market is in for a major change.
Long-haul and LCCs
Low cost long haul was started in its modern form by AirAsia X and Australian Jetstar. But it’s Norwegian who has expanded its long-haul operation the fastest since 2013. Its strategy to expand on the US market has been somewhat held back by political unwillingness to grant it rights for its Ireland based carrier but it’s now expanding the international destinations as fast as its fleet allows.
Norwegian presently operate 11 Boeing 787 but has a further 31 on order. Add to that the 108 737 MAX 8 that start arriving 2Q 2017. Norwegian currently operate long-haul from Oslo, Stockholm, Copenhagen and Gatwick and started flights from Paris this summer. Destinations are New York, Ft Lauderdale, Orlando, Los Angeles, Oakland, Puerto Rico and Bangkok.
The long-haul network will now expand as fast as new aircraft will allow. There will be reasons for classical long-haul carriers like British Airways, SAS, Air France-KLM and the US carriers to prepare for a long and hard fight for the price sensitive part of the market . The problem for these carriers is that some of their primary markets are within the areas where established long-haul LCCs expand and other powerful LCCs will now follow suit.
Suitable aircraft
Norwegian and Jetstar has proven that the 787 is a suitable aircraft for LCC long-haul and AirAsia is successful with its 31 A330-300. It has a further 66 A330neo (A330-900) on order. The operating costs of the 787 and A330neo are close over typical long haul sectors of 3000-6000nm. Where the 787 has the slightest advantage on the fuel side, the A330neo will be cheaper on capital costs.
The real joker for LCC long-haul is the new re-engined single aisle 737 and A320. The longest range standard models can take on sectors up to 3,200nm, which makes sectors like West Europe to East coast USA or Europe to the Gulf states possible. Get the high gross weight A321LR and you can penetrate markets 300nm further out.
With a suitable cabin using Premium economy and Economy with light weight seats, 160 to 210 passengers can be transported with an acceptable comfort for flights lasting up to eight hours.
The 737 MAX 8 is the longest legged aircraft out of the box by virtue of its wing holding the fuel equivalent of an A320neo with an extra cargo bay tank. Once the A320neo has an extra tank in the belly it can compete with the MAX 8 on flights up to seven hours. Their operating costs on such distances are very similar.
An A321LR comes with up to three extra tanks in the cargo area to match its increased take-off weight. It can still fill its tanks with a load of 200 passengers + holiday baggage for legs up to eight and a half hours duration. Seat mile costs are then very competitive with the best dual aisle wide-body aircraft.
I think the A321 NEO/LR could be a small game changer at the Atlantic. It has the additional seat rows, range, wider seats in economy, low price and far superior economics too 757, A310 and 762.
SAS, Azores, Norwegian, JetBlue, Aer Lingus openly take A321LR positions. Others from the 35 airlines long A321NEO customers list closely watch developments.
A twice a day comfortable A321LR into your hub from a big Transatlantic competitor is nothing to look forward too revenue wise. Retaliating by doing the same is an option. AA, DL, BA, LH, AF will convert some NEO slots quickly if they feel the need.
http://www.airbus.com/presscentre/pressreleases/press-release-detail/detail/norwegian-selects-30-a321lr-for-first-transatlantic-routes/
Look at the emerging A321 transcon cabins to get an idea of the options.
https://cdn.seatguru.com/en_US/img/541/seatguru/airlines_new/American_Airlines/American_Airlines_Airbus_A321_new.jpg
For how long can Boeing keep studying a 767 sized MoM? The caravan moves on.
Bjorn,
Having done a “real life” evaluation of the 321LR, I disagree that it will do 8,5 hours with 200 pax. What it will do, is close to 8,5 hours with not more than 180 pax, and 2 ACT which is the optimum. The third ACT adds fuel (and its own weight) but at the expense of payload. To fully utilize 3 ACTs for range, weight is only available for about 160 pax, in all cases dependent on LOPA customization and the resultant Operating Empty Weight.
So Keesje is right, needs new big wing. How much would that cost? I have the feeling that Airbus are tempted but are awaiting Boeings next move.
@Grubbie
Considering they spent about 1.3$ billion to hang new engines on it developing a new wing would probably cost 1.5-2.5$ billion depending on how extensive the changes are. This is a rough, rough estimate considering that wings cost twice as much to develop on new designs than engines do and assuming that Boeing spent about 3$ billion to put a new wing and engines on the MAX so splitting the difference…
I believe that would be a reasonable estimate though frankly people that know a lot more than me might come up with something entirely different but I thought I’d give it a shot 🙂
@Geo
Boeing didn’t put a new wing on the MAX – where did you get that idea?
FWIW, as a rule of thumb, the wing for an all new aircraft – i.e. wingbox, movable surfaces on the leading/trailing edge etc. – typically accounts for around 35-40 percent of the total development cost. Hence, for a $15 – $20 billion NSA, the wing would cost somewhere in between $5 billion and $8 billion.
I don’t know, maybe I was thinking of the work done on the 777x which would seem to fit with what they would do to modify the neo.Perhaps I was just thinking of all the mods they did on the MAX which while not an entire new wing it was modified a bit. Perhaps I made it up in my head. Regardless…
.
As for % of development cost the source I have uses 20% as a typical value, second to the fuselage at 37%…
https://ocw.mit.edu/courses/aeronautics-and-astronautics/16-885j-aircraft-systems-engineering-fall-2004/lecture-notes/pres_willcox.pdf
Anyway I believe Grubby was referring to modding the 321neo not,building an entire new aircraft.
You think doing that would run 5-8billion?
@Geo
I could have elaborated further. New wing equals new main landing gear; resizing of the empennage as the sizing of the vertical/horizontal tailplanes are dependent on the wing area and the mean aerodynamic chord; and a number of new aircraft systems – a significant number of which are for flight control, fuel system etc.
http://bit.ly/2djYYLE
So, this is why the total cost for a re-winged A322 IMJ would cost at least $5 billion.
OK that’s answered that question, wait for the new NSA competitor and have another look at it then.
Thanks OV-099!
That is certainly a sobering number.
@oceancrosser
FWIW, the A321 was launched as a 180-seat aircraft.
https://www.flightglobal.com/FlightPDFArchive/1993/1993%20-%200502.pdf
–
United Airlines operates the 757 in a three class 169-seat configuration (e.g. 16 flat bed seats in business class with 180 degrees recline, 45 seats in premium economy and 108 seats in economy). In a similar configuration, the A321LR would have around 160 seats. Thus, I can’t see why flying 180 passengers for 8.5 hrs would be nothing but advantageous to LLC operators like Norwegian that are operating two class 787-8s that have 80+ percent greater floor area than the A321, but which only have some 60 percent more seats than a 180-seat A321.
https://www.seatguru.com/airlines/United_Airlines/United_Airlines_Boeing_757-200_Flat.php
https://www.seatguru.com/airlines/Norwegian_Air_Shuttle/Norwegian_Air_Shuttle_Boeing_787-8.php
Addendum
One empty ACT accounts for little more than 1 percent of OEW- or roughly around a 0.5 percent increase in fuel consumption. As P&W, apparently, will deliver a 2% PIP due for the PW1100G powered A321LR by 2020, the extra weight of an ACT (2.4 metric tonnes of fuel + empty weight) should IMJ be compensated for by the engine PIP alone.
–
http://www.airbus.com/presscentre/pressreleases/press-release-detail/detail/azores-airlines-to-expand-transatlantic-operations-with-a321neo/
“With a suitable cabin using Premium economy and Economy with light weight seats, 160 to 210 passengers can be transported with an acceptable comfort for flights lasting up to eight hours.”
Yrs but oceancrosser want arguing eith the original spec. and target market for the NEO LR. He was just pointing out that Bjorns projections wete a bit too ambitious.
But its certainly sounds like the A321 NEOLR will do what it says on the tine, granted.
And as Keesje mentioned “SAS, Azores, Norwegian, JetBlue, Aer Lingus openly take A321LR positions. ” its very useful for long haulers that target low costs from smaller more isolated cities. Its a great plane for expansion.
“Yrs but oceancrosser want arguing eith the original spec. and target market for the NEO LR. He was just pointing out that Bjorns projections wete a bit too ambitious.”
Key words from Bjorn: It can still fill its tanks with a load of 200 passengers + holiday baggage for legs up to eight and a half hours duration
Hence, pax + bags with no additional cargo carried in the holds – in addition to a 2 percent PW-1100G engine PIP by 2020 – you’d probably look at a payload/range performance very close to what Bjorn has outlined.
Good point LLCs charge for baggage, which surely brings the total weight down.
It seems Norwegian plan to put 220 seats into its A321LRs. Not sure how far they will fly.
It may look as of it’s the A321LR, and not the 787, that will be the disrupter that will truly fragment the North Atlantic market between western Europe and most of the east coast of North America – not to mention, of course, other route sectors such as Scandinavia to India, intra Asia, SEA to Australasia etc., where the A321neo/A321LR is likely to be making significant inroads – albeit no as disruptive as what might occur on the North Atlantic.
It looks like maybe the 737-8 may be the disrupter, don’t need those nasty belly tanks!
Trans,
I wish I could get rid of my belly tanks!
@oceancrosser
You seem to have a well informed view of the capabilities of the LR. Could you give me some idea of the scope of city pairs you were considering. Is the A321 only able to reach east and northerly cities in the US from west and northerly cities in Europe or does it have a capability to reach into the hinterland a bit more?
All the LCCs signing up seem to be on the western or northern edge of Europe suggesting it is a ‘beach to beach’ operation that is possible and little more.
Thank you
Hi Oceancrosser,
I fully agree. We came to the same conclusion when we first evaluated the A321LR two years ago. But as you say it’s all dependent on the LOPA. This article assumes the new light weight seats for both Premium economy and economy with no IFE as Norwegian would do the cabin (you have WiFi instead). The economy seat is around 12kg and the PE 25kg. No IFE, basic galleys and pay serving. You’ll have a cabin weight of around 5 tonnes versus around 7 for a normal long-range cabin with lie-flat business and IFE.
Wow, 8.5 hours in that, does not sound like a good time, glad my traveling days are over.
I’ve flown Norwegian and their 737s are more comfortable than AF or IB short haul (long time since I flew BA short haul) and a lot better that UA. I guess they aren’t jamming economy as much to fit business. I suspect Bjorn knows better than I the comparison.
Anyway the trend of the legacies to squeeze economy to fit bigger business is IMO what is making LCC long haul so viable. If you are going to suffer anyway might as well go cheapest. Most legacies are just overpriced LCCs in the cheap seats. Unfortunately for the legacies they are sowing the seeds of their own demise as when times get tough the business market drop back to economy. So the most stable demand seems to be economy and when you push those pax away you will have problems when business loads fall away in bad times. Did Ryanair, Easyjet or Norwegian suffer as much as AF/KL, LH and BA in 2008? I don’t think so.
I am curious how many firm orders does Airbus have for the 321LR?
Are you thinking more or less? It looks like it will be a successful variant and the great thing is that for minor adaptation you get the stock A321neo for free. Flexible and capable IMHO.
I was interested to note the importance of the MAX 8 as naively I thought it didn’t have proper transcontinental/ transatlantic capability.
If there is a city pair explosion then the conventional wisdom of WB for transatlantic will be re-written far beyond an occasional B757
Just the sales numbers, I cannot locate them anywhere.
https://airwaysmag.com/tag/a321lr/
Thanks, Keesje but I could not locate the info there, even the Airbus spreadsheet doesn’t specifically list the LR variant.
1400 round numbers,? some hanging out like AK Airlines.
Something to keep in mind is Air Asia is talking about doing a lot of leasing.
Not that it matters if they take them but they are such an iffy operation.
All their A330 orders were kicked down the runway to NEO, not sure they will not then do A350 and then wind up buys a couple used A380s when they are done kicking all the tires in the Airbus lineup.
I think the MAX and NEO’s are optimized for 1500-2000NM operations. Yes Airbus can squeeze 4000NM of a A321LR, but it is questionable if even 4000NM is enough for reliable serving Eastcoast – Western Europe markets. It needs an extra 500NM / hr for that. Jetblue says so too.
http://www.airliners.net/forum/viewtopic.php?f=3&t=1342155#p19087305
Jetblue is not an intercontinental LCC industry bellwether. IMJ, they might be realising that they won’t be able to compete properly with an onslought of European LCCs flying A321LRs to Boston Logan and JFK (i.e. two of Jetblues five crew bases), from all over western Europe, and is therefore specifically asking for an extra 500nm in order to able to fly to all over western Europe from their two crew bases at Fort Lauderdale and Orlando.
Hmm, that should be “onslaught”.
They really need to give us an edit button…
Agreed! 🙂
I don’t think this has to do with Europe-Florida. That’s just out of reach for a NB — and not strategically vital for JetBlue anyway.
Assuming the A321LR is roughly similar to the 757-200 in performance, in a JetBlue configuration it probably can’t reliably make it back from more than 3800 statute miles in the winter. (United has put a lot of 767s on its longer TATL routes from EWR lately because of too many fuel stops coming out of cities like Berlin.)
If that’s the case, Munich and Milan would be a stretch and cities like Venice, Rome, and Vienna that might otherwise be attractive would be out of bounds. And forget about FLL to Sao Paulo or Rio. An extra few hundred miles of range would bring most, if not all of those destinations within reach. That’s what JetBlue wants most. But even in its existing form, I think the A321LR opens a lot of valuable opportunities for JetBlue, mainly in Boston.
FLL/MCO to south western Europe (including LHR) should be doable with a single aisle having a 500nm-plus increase in range over that of the A321LR (NB: Pax + bags only).
Heck, even a 500nm more range would not make the A321LR make say FRA-MCO. I used to fly DC-8s in the eighties central Europe to MCO, quite often pushing 10 hours, fuel stops in SNN, SMA, YQX did happen.
That is firmly out of the A321LRs league.
You do get bad winds on the N-Atlantic, I remember 200+ kt headwinds from Ireland almost all the way to Chicago. And these can happen probably nine months out of the year.
@Oceancrosser
FRA is IMJ not located in south western Europe. 😉
Now, FLL-LHR is 3768 nm, FLL-MAD is 3801 nm, while FLL-FRA is 4123 nm (i.e. great circle route – not accounting for flights facing headwinds, higher altitude at MAD etc.).
Add 500 nm-plus extra range for a re-winged A322 – or about an hour extra flight time – and it would seem as if MCO to south western Europe and England/Ireland, is eminently doable.
Correction:
FLL should be changed to MCO in the above mentioned great circle routes.
Still no word from O’leary? Not a man known for his chronic shyness
The ‘wallflower’ to whom you refer has consistently said he would do transatlantic but always in the medium term. There was always a short-term issue to prevent him….
John Leahy, apparently, doesn’t want anything to do with Michael O’Leary. 😉
Now there is two to get in the same room.
MAD
@Sowerbob
I would say the following applies for the A321 LR
2 ACTs 3200nm ESAD w reserves 180 pax
3 ACTs 3500nm ESAD w reserves 160 pax
The OEW comes close to 53.000kgs +/-. If you put 200 pax + bags in there, say 21.000kgs, you can now load 23.000kgs of fuel or little more than 1 ACT, before you hit MTOW. So something like 7:10 plus reserves. Not my numbers, but Airbus calculations.
Basically beach-beach comfortable year round from Continental Europe. North Europe to US/CAN a little further and of course UK-US/CAN a little further.
If the yield is there to carry “only” 160 pax and utilize 3 ACTs, it can be stretched, but remember those lie-flats are heavy and every kg gained on OEW is a kg lost in fuel.
JetBlue mint = 160 seats, BA 154, AA less (4 class), using business class sleeper seats like Delta, AA, BA do, 170 seats seems a reasonable assumption.
http://travelskills.com/wp-content/uploads/2014/03/Screen-Shot-2014-03-15-at-10.24.06-AM-575×319.png
It becomes more and more clear to me around 4500NM real world range is a kind of holy grail for a small MoM specification. More and it becomes heavy / gets in to small twin territory, less and you miss some critical markets (TATL). 4500NM range and 10% more capacity than an A321 would be the best business case for Boeing for a 737-10.
http://i191.photobucket.com/albums/z160/keesje_pics/United_737_Max9%20white_zpsyfqwm0y3.jpg
Thanks Oceancrosser,
we did our original A321LR analysis with a normal long range cabin, 16J lie flat, 48W and 108Y=162 with 3 ACTs. We also used Airbus’/Boeing’s normal 95kg Pax+Bags to stay comparable with their discussion. You use a more realistic 105kg and therefore you reach a more realistic result. Would you say this is the real weight of a pax+bag on long haul?
Thanks for the info, always great with real world cases.
Always interesting to see the required in depth details needed to asses the reality, and how shifting a bit one way or the other changes the outcome.
thanks to both of you
Hi Bjorn,
In my world and our mid-long haul operation we use 105kg for pax+bags. It is a long standing average that has held up. Pax+hand-baggage+hold-baggage. We do not charge for carry-on or first hold bag currently (whatever happens in the future). Charging for hold baggage in the US has led to US originating passengers carrying anything up to and including the kithcen sink on board. Overhead bins keep getting bigger, and some of those “carry-ons” are anything but. And people use force to stuff them in. There is a quandary in there as this results in longer boarding and de-plaining times.
So hold-baggage charges have led to some inefficiency. European pax are less inclined to this, but will probably get there as well as baggage charges spread more beyond the LCCs.
I assumed the typical European LCC long-haul to be more like the OEM standard 95kg as they are really like hawks on your bag weights and your carry on amounts. I and our family fly LCC quite a lot as we are Scandinavians and Norwegian has a really good service for our home trips. I also fly easyJet as I find them reasonable (I can’t come to terms with the Ryanair seats/airport choices). European LCCs love to charge you for every kilo over 20 on the bag (Norwegian charge for you bag on its lowest long-haul fare) and its really pricey and they guard the ONE carry on like hawks both for numbers, dimensions and weight, my wife found out last she flew LCC. I would be quite interested in their pax+bag assumptions but I think they are closer to 95kg than 105, lets see if someone in the know will chip in.
Oceancrosser and Bjorn
Thank you, informative stuff
Have you ever tried flying Ryanair?
https://www.ryanair.com/gb/en/useful-info/help-centre/faq-overview/Baggage#0-1
All this seems to indicate why Boeing should have launched the NSA in 2011. That’s history, but now they are talking Max 10 which without a new larger wing won’t get the range to really compete and will still be too narrow and have a 1950s nose.
So…forget the max 10, forget the twin aisle MOM which which won’t compete well with big single Aisles or at the bottom or existing widebodies at the top and launch a NSA already. Fuselage diameter like MC-21 and ultimately two wings, one for larger and longer range variants one for smaller and shorter range variants. Start with the big one and work down ultimately replacing Max but first competing with (and exceeding in range/payload) the 321 and potential 322.
Stop those stock buybacks already and invest in the future, please!
Do you know how much extra length main undercarriage leg is required for ‘Mad max’ to carry the larger fan LEAP-1A ?
8 inches ! Does that sound like they will do a whole new wing to suit ?
The wing areas of the neo and max family are essentially the same, so if the A321 can do it so can a max 10 ( which would have lighter zero fuel weight as well)
Interesting comment, I hadn’t thought about it like that before
Edelweiss Air wants to fly from to Zürich to Hawaii direct with A340-300.
That is another kind of long haul LCC.
Edelweis is a subsidiary of Swiss and Swiss is owned by Lufthansa. So the aircraft part is rather cheap.
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