By Bjorn Fehrm
November 30, 2017, © Leeham Co.: We have covered Boeing’s deliberations whether to restart 767-300ER passenger version production here and here.
To understand how good a stopgap the 767-300ER would be for an airline needing to replace ageing 767s, and the Boeing 797 not being there in time, we check its economics versus the alternatives.
Should an airline buy additional 767-300ERs (if offered) or the overqualified and therefore more expensive 787-8? Or is defecting to the Airbus A330-200/-800 a better option?
We will assume the 767-300ER is offered and produced as is, with only avionics upgrades and Aviation Partners Boeing (APB) split winglets. Most 767-300ERs are operated on medium range flights such as US transcontinental routes.
We will, therefore, compare the aircraft with medium range two-class cabins with 60-inch spaced lie-flat business class seats, complemented with 31-inch economy seats. The 767 would then hold 20 Business seats at five abreast with 209 Economy at seven abreast, giving 229 seats.
The 787-8 would have 264 seats divided between 24 Business (six abreast) and 240 Economy (nine abreast). The A330-200/-800 would transport 266 passengers at 24 Business seats (six abreast) and 242 Economy (eight abreast).
We fly the aircraft over typical US transcontinental routes, Figure 1.
Going West, we shall calculate with 2,500nm as a reasonable average. We use our normal reserves of 5% enroute, 30 minutes circling and a 200nm alternate.
The flight time will vary between five and a half hours for the 787 and up to six hours for the slower A330 and 767. The 767-300ER consumes 25.3t of fuel, the 787-8 25.1t, the A330-200 27t and the A330-800 25.8t. The seat mile fuel differences are with fuel at $1.75/US gallon and with 767-300ER as datum at $0.0222/sm:
The higher fuel burn per seat for the 767 is as expected. Total fuel cost for the trip is in the $14,500 bracket for all aircraft except the A330-200 which costs 5% more. The higher seat counts for the 787 and A330s brings the per seat fuel costs below the 767.
When we look at the other costs making up Cash Operating Costs (COC), we find:
At total mission COC we have the 767 at $35,800, the 787-8 at 37,650, the A330-200 at $39,650 and the A330-800 at $38,800. On a seat-mile basis with the 767 as datum at $0.0544 we have:
The 5%-9% higher seat mile COC for the 767-300ER is not surprising. It has fewer seats to spread similar mission fuel costs and its lower crew and landing costs can’t compensate.
As described in the previous articles, a rebirth of the 767-300ER passenger version has many implications for Boeing. As a stopgap, until NMA/797 for airlines which operates 767 fleets today, it can make sense.
The Cash Operating Cost (COC) deficit of the 767 compared with its alternatives is 5%-10% with today’s low fuel prices. This can be compensated with low acquisition costs and aggressive pricing of the airframe’s maintenance costs.
The main consideration for Boeing will probably be, “how many defections to the Airbus A330 do we risk with and without a restarted 767 line, before we have the NMA/797 available?”
Hi Bjorn, are these slot-restricted airport? Would using slightly larger small WB allow to free up some of the slots for additional connections?
I am not Bjorn, but I will offer my answer concerning whether SFO and SEA, two of the airports that appeared in Bjorn’s transcontinental route examples are slot restricted. My answer is based on my observations when I lived near Seattle for 3 years, and near San Francisco (near the usual approach path) off and on for 50 years. Both SFO and SEA are very busy during “rush hours”, for instance early in the morning which is a very popular transcontinental departure time, or at SFO, which is a major United Airlines hub, when United airlines is having a hub ramp (planes converge from across the UAL system to exchange passengers). There are also times of the day when things are pretty dead with many vacant gates and by major airport standards, and not many planes landing and taking off. SFO gets capacity limited on low visibility days when its usual practice of allowing simultaneous approaches on 2 parallel runways is suspended and planes have to instead line up in a single file for approaches, due to the separation between the parallel runways being inadequate to allow for simultaneous parallel approaches in low visibility conditions. At most other major airports parallel runways are far enough apart to allow multiple parallel approach paths to continue in low visibility conditions. Oakland (about 10 miles across SF bay from SFO) and San Jose (about 50 miles from SFO) are not anywhere close to being slot restricted.
The US big three use lots of 757’s or A321’s for the type of transcontinental routes Bjorn gave as examples in this post, so there seem to be many times of the day when they are more concerned about using a plane that is too big than they are about using one that is not big enough. To provide a concrete example, on Monday 12-11-17, the flights that Delta was offering for sale from SFO to JFK when I checked a few minutes ago, were using the following equipment.
757-200: 5 flights (at 6:15 AM, 11:50 AM, 1:15 PM, and 2:15 PM and 4:15 PM))
767-300: 1 flight (at 10:25 PM)
767-400: 1 flight(at 8:30 AM – the most popular transcon. departure time))
Seating capacity on the equipment used by Delta on these flight is as follows.
757-200 flights: All Delta configuration 75S: 168 total seats consisting of 16 lie flat Delta One seats, 44 Delta Comfort seats, and 108 Main Cabin seats. For comparison, Delta standard US domestic configurations (75D or 75H) have a total of 199 seats.
The 767-300ER flight uses Delta configuration 76L: 211 total seats, consisting of 36 lie flat Delta One seats, 32 Delta Comfort seats, and 143 Main Cabin seats.
767-400ER: 246 total seats, consisting of 40 lie flat Delta One seats, 28 Delta Comfort seats, and 178 Main Cabin seats. Delta has only one 767-400ER seating configuration.
As of th emoment I am writing thsi, round trip fares for return on 12-15-17 range from $301.40 for basic economy for several possible itineraries, to no lower than $4,681.40 for Delta One if the 11:50 AM departure from SFO is selected.
I don’t get around the New York or Boston airports enough to offer an opinion about them; however I do spend lots of time going through Delta’s Atlanta hub which is the busiest US airport in term of number of passenger boardings (next in 2016 were LAX, ORD, and DFW). Like SFO and SEA, it can be all gates filled and planes lined up to take off at peak departure and arrival times and during Delta hub ramps, but at mid day between hub ramps in can empty out to a surprising degree.
In case anyone is interested, here is the equipment Delta’s competition uses for non-stop flights available for purchase from SFO to JFK on the same departure date of 12-11-17 for which I listed above the equipment used by Delta for SFO to JFK non-stops.
Alaska / Virgin America: 6 flights on A320’s, no lie flat seats, about 150 total seats.
American: 6 flights on A321’s. At least some on premium configured A321’s with some lie flat seats and 102 total seats, vs. 181 to 187 total seats for standard domestic configuration.
JetBlue: 6 flights on A321’s, all with premium configuration with lie flat seats and 159 total seats, vs., 200 total seats for standard domestic configuration.
United does not fly non-stop SFO to JFK, but does offer 15 non-stops on 12-11-17 from SFO to EWR, with 13 flights using 757’s, and 2 flights using 777’s.
One take away from all of the above, which is probably mind numbing detail to most people, is that wide body equipment is pretty rare for SFO to east coast transcontinental flights. The US big three make heavy use of 757’s and A321’s on these routes, with most if not all being in special premium configurations with lie flat seating in the front of the plane.
Following are some excerpts from the FAA webpage at the link at the end of this post.
“The Federal Aviation Administration (FAA) uses runway slots to limit scheduled air traffic at certain capacity constrained airports. In the U.S., those airports are John F. Kennedy International Airport (JFK) and LaGuardia Airport (LGA) in New York, and Ronald Reagan National Airport (DCA) in Virginia, outside Washington D.C. In addition, the FAA monitors scheduled air traffic demand at other airports and has a formal schedule review and approval process at several airports. Those airports are Chicago O’Hare International Airport (ORD), Los Angeles International Airport (LAX), Newark Liberty International Airport (EWR), and San Francisco International Airport (SFO).”
“Around the world, airports are designated at levels indicating their degree of congestion. Level 1 airports have sufficient capacity to meet demand. Level 2 airports may have some periods when demand approaches one or more capacity limits, but a voluntary schedule-facilitation process prevents systemic delays. Level 3 airports are under slot control and require advance approval to operate during slot controlled hours. Twice per year, Level 3 and Level 2 airports around the world follow a process to allocate take-off and landing authorizations and facilitate schedules.”
So JFK, LGA, and DCA are level 3, and ORD, LAX, EWR, and SFO are level 2? All other US airports are level 1?
Reading a little deeper in the FAA web page I linked to above, I found a definitive answer as to which airports in the US have level 2 or 3 slot restrictions. The quotes are from the page at the link after the quotes.
“In the U.S., the Level 3 airports are John F. Kennedy International Airport (JFK) and LaGuardia Airport (LGA) in New York, and Ronald Reagan Washington National Airport (DCA) in Virginia.”
“In the U.S., the Level 2 airports include Chicago O’Hare International Airport (ORD) in Illinois, Los Angeles International Airport (LAX), San Francisco International Airport (SFO) in California; and, Newark Liberty International Airport (EWR) in New Jersey. An airport operator may separately declare an airport as Level 2 based on airport passenger terminal facility or other constraints. Currently, the four FAA Level 2 airports have a separate process for flights operating at specific airport facilities designated and managed by the local airport operator. In these cases, carriers provide schedules to the FAA and local airport schedule facilitators. The carrier is responsible for ensuring matching runway and terminal approvals.
Although voluntary, carriers are expected to seek and obtain schedule approval in the Level 2 process, as schedule facilitation is used to prevent an escalation in congestion necessitating a possible Level 3 designation. If a carrier chooses to operate a flight without approval from the FAA and the airport subsequently transitions into Level 3 status, the carrier would not receive priority for any flights not approved by the facilitator when the Level 3 historic baseline is established. This could ultimately result in the carrier being unable to continue similar service.
The FAA tracks flight operations closely at Level 2 airports in the U.S., monitoring for time periods that may be susceptible to systemic volume-related delays as a result of congestion.”