737 max... what now?

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Originally Posted by Astro14
If you're going to reduce your fleet size, vertical cuts (single airplane type) make sense, because you shed the costs of a fleet type; spare parts inventory, training equipment, simulators and training space. Small fleets (low number of airplanes) are the natural choice.

The A-380 had been a break-even airplane for Lufthansa, I'm not certain that 747-8 ever made money and the A-340 is a gas guzzler and has high maintenance costs. Each of those fleets at Lufthansa is small. Those vertical cuts make perfect sense, because small fleets cost more to keep, as the overhead of parts, and training support, is amortized over smaller numbers.

To be honest, I think my beloved 757 and then 767, will be the first airplanes to go should United begin parking airplanes. The oldest, and least fuel efficient. Spare parts for the round dial cockpit have become harder to source. The 767 and 757 are the smallest fleet. Smaller retraining numbers. We had already begun selling some of oldest 757s last year and this year, as the 737 MAX was to take the domestic flying that the 757 was doing. Granted, I'm no MAX fan, but it's the same passenger capacity of the 757 at half (yes, half) the fuel burn.

Those two numbers (passengers and burn) are awfully compelling to the C-suite.

You have a point about pilots, there is no doubt about this. And yes, for some this will be opportunity and for some it will be the end. It is all about leadership now. There will be winners and losers in this crisis. Those that have good lobbying operation will do good. Congressional delegations are important.
Going back to pilot issue. People do not understand that losing such know-how is ridiculous to make up for. I have been part of the process where pilots in military were lost, and than military had to play catch up. It is grueling process. And that is military, where funds are available and there are no loses. That is why companies cannot just like that get rid of pilots.
Also, this crisis will solve pilot shortages in military. People will think four times before leaving military and no one will be hiring for some time. That means that current pilots are very, very important.
As for Lufthansa, I think A343 are gone. Probably 346 at my disappointment too. Hypothetically, if UAL get's rid of 757 and 767, where that leaves you?
 
Originally Posted by edyvw
Originally Posted by Astro14
If you're going to reduce your fleet size, vertical cuts (single airplane type) make sense, because you shed the costs of a fleet type; spare parts inventory, training equipment, simulators and training space. Small fleets (low number of airplanes) are the natural choice.

The A-380 had been a break-even airplane for Lufthansa, I'm not certain that 747-8 ever made money and the A-340 is a gas guzzler and has high maintenance costs. Each of those fleets at Lufthansa is small. Those vertical cuts make perfect sense, because small fleets cost more to keep, as the overhead of parts, and training support, is amortized over smaller numbers.

To be honest, I think my beloved 757 and then 767, will be the first airplanes to go should United begin parking airplanes. The oldest, and least fuel efficient. Spare parts for the round dial cockpit have become harder to source. The 767 and 757 are the smallest fleet. Smaller retraining numbers. We had already begun selling some of oldest 757s last year and this year, as the 737 MAX was to take the domestic flying that the 757 was doing. Granted, I'm no MAX fan, but it's the same passenger capacity of the 757 at half (yes, half) the fuel burn.
Those two numbers (passengers and burn) are awfully compelling to the C-suite.

You have a point about pilots, there is no doubt about this. And yes, for some this will be opportunity and for some it will be the end. It is all about leadership now. There will be winners and losers in this crisis. Those that have good lobbying operation will do good. Congressional delegations are important.
Going back to pilot issue. People do not understand that losing such know-how is ridiculous to make up for. I have been part of the process where pilots in military were lost, and than military had to play catch up. It is grueling process. And that is military, where funds are available and there are no loses. That is why companies cannot just like that get rid of pilots.
Also, this crisis will solve pilot shortages in military. People will think four times before leaving military and no one will be hiring for some time. That means that current pilots are very, very important.
As for Lufthansa, I think A343 are gone. Probably 346 at my disappointment too. Hypothetically, if UAL get's rid of 757 and 767, where that leaves you?


In an environment of multi-year industry decline, marginal types like the A34X and the A380 are probably gone although the A380 will at least live on with Emirates assuming that they can resume their former level of operations.
In an environment of general industry decline spread over at least a few years, the availability of type-rated pilots will be the least of any carrier's concerns.
There are also VCs (venture capital or vulture capital) who might be alert to the opportunity to loot target airlines.
Anybody remember Frank Lorenzo?
In any event, if this current crisis peaks and ebbs by mid-summer, none of the really bad stuff need happen to the airline industry.
If the current level of travel demand continues through year end, there will be little to worry about for most of the world's airlines since they'll be no more than fond memories, just like many carriers that succumbed in earlier times.
 
B737 Max =
18.gif
 
Originally Posted by 4WD
B737 Max =
18.gif




OTOH, with neither Boeing nor the FAA having all that much to do ATM and with Boeing, its MAX and the FAA having been superseded in the daily news cycle, what better time than now to resolve the issues and end the grounding?
 
There is less pressure from the airlines to get the Max in the air at the moment, but there will be much more in a few months. The airlines with Max orders want delivery of their new, fuel-efficient jets. There is a cash flow issue for them as well - take delivery of the jet and then finance it - and they end up with more cash than they had before the deal. A critical point right now.

There will be big pressure from Boeing to get it in the air. They need the cash from deliveries of the airplanes.

It'll be flying by the end of the year.
 
Originally Posted by Astro14
There is less pressure from the airlines to get the Max in the air at the moment, but there will be much more in a few months. The airlines with Max orders want delivery of their new, fuel-efficient jets. There is a cash flow issue for them as well - take delivery of the jet and then finance it - and they end up with more cash than they had before the deal. A critical point right now.

There will be big pressure from Boeing to get it in the air. They need the cash from deliveries of the airplanes.

It'll be flying by the end of the year.

Of course, and government will in the end bail out Boing, though Boeing's negotiation tactics are simply surreal.
 
Originally Posted by 4WD
Surreal is calling anything a bail out in the unprecedented circumstances …

It is surreal. They are negotiating, but at the same time saying: we have other sources. There is growing number of those that will make that decision that are saying: you know, those 16.6 million people that filed for unemployment do not have other sources. So yeah, it is bail out.
 
Seems we debate bail out here often enough to establish meaning in the classical sense.
Picking and choosing vital industries in extremely difficult times is part of what all countries do.
This global pandemic comes down to China and the WHO - but at what cost to them ?
 
Of course helping Boeing is the correct decision for our government to make.

Government also helping the airlines with 70% cash grants and 30% very low interest loans that must be repaid. ðŸ‘

I agree that airlines need to have some skin in the game if they want $$$ billions in financial help.
 
Time to dump mid size plans and 737 for composite built single aisle B797 with P&W PurePower …
 
Originally Posted by 4WD
Seems we debate bail out here often enough to establish meaning in the classical sense.
Picking and choosing vital industries in extremely difficult times is part of what all countries do.
This global pandemic comes down to China and the WHO - but at what cost to them ?

My point is that Boeing want money, but at the same time wants to set conditions. If they want tax payers money, they should oblige with what govt. wants. Govt. does not owe them anything.
Yes, global pandemic comes down to China, our response to it comes down to leadership in our country.
 
Originally Posted by Mr Nice
Of course helping Boeing is the correct decision for our government to make.

Government also helping the airlines with 70% cash grants and 30% very low interest loans that must be repaid. ðŸ‘

I agree that airlines need to have some skin in the game if they want $$$ billions in financial help.

There is no doubt that govt. should help. But then govt. sets up conditions, not those that need help. In the end, if AA did not engage into stock buyback, they would sit on cash.
So yes, Boeing should get help, and if they are not willing to pay small interest (like students pay for example) then govt. should take stake in company too.
And let's be clear, Boeing is facing hard times, but this is also way to compensate for 737 MAX debacle, which is their fault.
 
Originally Posted by edyvw
Originally Posted by 4WD
Seems we debate bail out here often enough to establish meaning in the classical sense.
Picking and choosing vital industries in extremely difficult times is part of what all countries do.
This global pandemic comes down to China and the WHO - but at what cost to them ?

My point is that Boeing want money, but at the same time wants to set conditions. If they want tax payers money, they should oblige with what govt. wants. Govt. does not owe them anything.
Yes, global pandemic comes down to China, our response to it comes down to leadership in our country.

Leader what?
 
Boeing has just raised $25B in a greatly oversubscribed debenture offering.

There apparently remains considerable investor confidence in the company and this will also give considerably stronger voice to Boeing if and when it returns to negotiating any federal bailout with 25 billion Georges of OPM adding to the chorus.
 
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