Re: TWA and the A318 and 717

Date:         13 Jan 99 02:13:47 
From:         jyl7806@kcmetro.cc.mo.us
Organization: Deja News - The Leader in Internet Discussion
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In article <36899cbc.2579276@news.goodnet.com>,
> 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.

TW is not a regional.  The different mission theory is only valid if TW
management has finally accepted a truism of this industry...frequency is
king.  This is an important point.  Its roots actually go back to deregulation
and its effect on the airlines.  Essentially speaking, its very hard to build
market share on a particular route if you go there once or twice a day
(assuming the particular route is of a critical mass.)  Ask Vanguard.
Instead of saying "We're going to dominate the MCI-LAS route," they have
shell-gamed their route structure trying to find a paying one.

Airlines that were essentially the high-tempo carriers pre-78 are the carriers
today that are dominant.  AA and DL come to mind immediatly.  They parlaid
their initial advantage into market dominance.  Their route structure, a/c
and host of other little advantages allowed them to weather the storm.

This aircraft order tells me that TW's management has finally pounded it
through that sending 5 MD-8xs into SEA isn't working, when everyone else
sends 10.  You are then forced to fill your a/c with low-yield pax.  This
starts the vicious circle the airline finds itself today.

 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.

The fact that the A318 is a new a/c to TW is startling.  However, TW now
wants to use it on thick routes in a high tempo manner.  The nice part about
both the 717 and 318 is their direct operating costs (in the long term.)
We've been over the highly complex nature of short term OCs so I'll try
to distill my argument.  Basically, TW will try to use its small, efficent
a/c to run high tempo ops.  For ex. STL-SEA 12 times a day instead of 4.
The 717 will do the same, except for shorter legs.  In this case, ground
turnaround time is important, because Lambert isn't getting any bigger soon.
Therefore, since you can't double your bank size, you're going to have to
launch more banks.  I don't know how many banks TW launches and recovers
a day, but if anyone cares, I'll find out.

Related to the different nature of the Airbus point, this might point
to a A340 buy in the near future.  I've always been a proponent of 340
as a good replacement for the 74 on the long range stuff.

> 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.

Freight lift is a problem.  Point taken.

> 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.

I would say "historically poor." TW's recent dispatch reliably has been
pretty good.  Moreover, these statistics mean nothing other than a baseless
measure the Feds use.  In the words of P.J O'Rourke, comparing waxed apples
to waxed oranges.  If anyone wants to know how to trip an ACARS, email me...
or don't ;-)  My point is that the numbers can and are cooked.

> 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.

My personal take on this is that TW is talking more poor than it actually
is.  None of us (presumibly) has read the 10Ks of TW.  There is a very
good reason that TW would try to hide as much  $$ as possible.  Contract
negotiations.

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.

While its true that TW didnt want the 330 while they had the 76, the 330
order did serve to keep TW's foot in the door with AI, and with AI's
traditional willingness to change aircraft type within an order, as a stick
to use with Boeing.

> 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.

As I noted eariler, I doubt TW is playing used car salesman (except WRT the
contract negotiations.)  I could be wrong.

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

And that one re: the 717 and 318 is good, too.

> my thoughts anyway.

Me too.

Justin

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