Re: TWA and the A318 and 717

Date:         04 Jan 99 22:20:36 
From:         Vince Lanza <vinlan19@flex.net>
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Hello,

My father is a retired 35 year TWA veteran, giving me quite
a bit of insight into their operations and I have always
been a big aviation fan, so let me try to answer some of
your questions.

James Matthew Weber wrote:
>
> I keep thinking about this, and it still makes no sense to me.  A
> previous post to this newsgroup suggested that the aircraft fulfil
> different missions. While that may be possible, it doesn't deal with
> the fact that it is basically nonsense.
>
> Both aircraft have similar passenger capacity. The A318 certainly has
> longer legs, but according to the Avweek article on the 717  in the
> October 12 issue, you can order the 717 with a higher MGTOW and higher
> performance BR715 engines, which takes the range out to 1700nm. My
> guess is the range on the A318 is still a lot longer, but that begs
> the question. I cannot think of many situations where a range in
> excess of 1700nm does TWA or any other regional much good.  What are
> you going to do, equip it for ETOPS and fly the pond? The weight
> penalty for the higher weight/longer range version of the 717 is less
> than 1000 pounds. I have to believe that buying that variant of the
> aircraft would have been less costly than the training and sparing for
> an all new aircraft ype, and as far as TWA is concerned, the A318 is
> an all new airplane.

An ongoing concern with TWA is "right sizing" the fleet with
the route network. That is one of the main reasons the
L-1011's and 747's are gone. They were too big for TWA to
fly profitably anymore. They also were getting old and very
expensive to operate. The only small short haul aircraft
that TWA has are old DC9-10/20 and 30's. These are not the
most efficient aircraft to operate. That is where the 717
comes in. New technology, fuel efficiency and lower
maintanence and similarity with an aircraft type that TWA
already flys. The 318 comes in for the longer routes that
demand greater frequency, and frequency is a thing that
Southwest has proven to be effective. As for the 318 being a
new aircraft type, TWA is buying into the A320 family of
aircraft and will be phasing out the DC9/MD80 family. On TWA
press release web page they discuss that the number of
aircraft types will remain basically the same with the
retirement of the 727's by the end of 1999. Since the end of
the DC9/MD80 product lines is near it makes sense to invest
in a newer aircraft with a broad family offering simplifying
maintenance and training later on.

Another note on the mixed order is that the 717 can be
delivered much sooner than the 318's or any other narrow
body airbuses. TWA needs the planes now and I am confident
that if TWA could get the airbuses as soon as the boeings,
the 717 probably would not have gotten the order.

> While the A318 will almost certainly weigh a good deal more, it isn't
> clear that is operating costs will be materially different. The
> published SFC figures for the Br715 are not impressive (The 21,000
> pounds thrust variant of the CFM56 used on the A319 does a lot
> better!). If the PW6000 cannot produce an SFC competitive with the
> best of the CFM56's, then P&W should probably forget about building
> it.

TWA has become an all P&W airline, with the 318 and A320
family that will continue. Of course the 717's will not have
P&W engines, but they will account for a smaller share of
the fleet. Also by choosing the engines for the 717's they
are covering the order of engines that would have gone on
the 330's, this way everyone is happy.

> The only stand out difference that may be meaningful  is probably in
> freight lift. This has always been a problem for the D9/MD80 family,
> and the basic diameter of the aircraft drives this issue. This was
> quoted as a major reason that both SAS and Alaska Airlines bought
> 737's.

The A318's also a have a somewhat wider cabin than 737's.

> I also have to wonder about buying two airplanes with all new engines.
> That guarantees high training and sparing up costs, as well as
> problems with dispatch reliability. Given TWA's already poor on time
> performance, this doesn't seem like a very intelligent move.

TWA's on-time performance has been number 1 the past three
months, and within the top 3 I believe for the rest of the
year. Start flight performance is up and schedule completion
is higher than it has ever been. As newer, less maintenance
needy aircraft come online, these should improve even
further.

> On the other hand, given TWA's difficulties in making money or a
> reasonable return on investment even when times are good (as in now),
> I am not sure TWA will be around when it comes time to deliver the
> A318's anyway. My own suspicion is another Bankruptcy may be in TWA's
> future if there is another downdraft in the industry in next couple of
> years. This time they may take the opportunity to cancel the
> outstanding Airbus Contracts. This decision looks to me more like an
> attempt to avoid the cancellation penalties from the old A330 contract
> than anything else.

Of course TWA has seen some rough times. Many a time TWA has
been written off as dead or on the verge and it clings to
life. No one can see into the future of course and TWA's
biggest obstacle right now is getting better contracts from
its workers. Contracts that will allow the airline to pay
them more while working more efficiently and trimming the
fat. If good contracts get signed and the yield management
gets going, TWA will be on its way. Also TWA has recently
payed down some loans that will add $100 million to the
bank.

> While it is possible that TWA plans to sell the aircraft, anyone who
> expects to turn a profit doing this is probably smoking something. It
> does happen now, and then, but it takes unusual circumstances. Given
> how well these aircraft are selling at the moment, TWA would be
> competing with Boeing and Airbus to sell, and under those
> circumstances, there is probably no price TWA could afford to charge
> that both Airbus and Boeing would not be willing to undercut. I
> suspect that there will be no shortage of good delivery positions
> available.

I can't really comment on that.

> I have another post in the works that provides some insight into why
> neither aircraft is selling very well, and probably never will.
>
> my thoughts anyway.

Some thoughts to add to your thoughts.

Vince