NWA new China/India routes with first 787

[jetflier]

Northwest eyes new India and China routes - Airline Business
January 2008

Northwest is looking to launch new services to China, India and possibly
Vietnam in 2009 using its first batch of Boeing 787s.

The carrier has 18 787s on order for delivery from February 2009 and will be
the first US carrier to place the new aircraft into service. "There are two
logical long-haul opportunities for Northwest - China and India," says
Northwest vice-president of international alliances Nat Peiper.

Northwest now serves Beijing, Guangzhou and Shanghai via Tokyo, and Mumbai
via Amsterdam. The 787 gives it the flexibility to serve these and other
markets in China or India non-stop. "From a route planning perspective the
787 is a dream," Pieper says.

He adds that Vietnam is also "a market we're interested in". Northwest may
serve Vietnam non-stop or via Tokyo, where it has unlimited fifth-freedom
rights and has a small Boeing 757 base used to serve intra-Asia routes.

 

[jke406]

I'm sure they'd love to do these things.

Unfortunately, these decisions will be made in ATL.

 

[clippyrip]

I'm sure they'd love to do these things.

Unfortunately, these decisions will be made in ATL.

We'll see about that....

 

[Diesel-9]

South Africa and New Zealand studies already done for the 787's. Along with many other new destinations.

 

[~~~^~~~]

If the decision is made in ATL, the 787 slots will probably be sold. It is another type.

Delta thinks the 777 is a better aircraft for its' needs and I'm guessing the 787 slots could be sold at a considerable profit. Besides, Delta is not going to want all the competition on those routes. They'll run the traffic through a hub and put it on a larger jet.

Unfortunately, a DAL / NWA merger IS about reducing capacity to drive up prices.

 

[~~~^~~~]

South Africa and New Zealand studies already done for the 787's. Along with many other new destinations.

I can see that, along with some Aussie trips. The 787 may just change the international game like the 767 did to the 747.

Delta's decision nas been to buy 777's and refit the 767-300ER's with winglets and possibly a -400 style flight deck.

 

[On Your Six]

If the decision is made in ATL, the 787 slots will probably be sold. It is another type.

Delta thinks the 777 is a better aircraft for its' needs and I'm guessing the 787 slots could be sold at a considerable profit. Besides, Delta is not going to want all the competition on those routes. They'll run the traffic through a hub and put it on a larger jet.

Unfortunately, a DAL / NWA merger IS about reducing capacity to drive up prices.

I highly doubt that. NWA wouldn't receive all of the 787s in year one - the deliveries would be spread out. Delta partially made the decision to retrofit the 767s based upon the long lead time for 787s (it missed the boat on orders).

Plus, if there will be such a huge emphasis on high-margin international travel going forward, why would you give up the flexibility the 787 could bring? That would be idiotic. You forget that many other competing airlines will be getting 787s and directly competing with Delta in the future - it can't be hobbled by inflexible fleet types. It's a different world with much more emphasis on point-to-point long haul traffic (Singapore, ANA, Qantas and other airlines will use their upcoming 787s in the same targeted fashion). The 777 is great, but it might be overkill in some thin markets. I am sure Delta will likely add many more 777s to the fleet over the next few years, but I doubt Delta will eventually replace the 767-300 fleet entirely with 777s. The 767-300s can't last forever and the NWA 787 order would be a good start (spread out over the next 5-10 years).

With my crystal ball I would predict that the 767-300 fleet would be gradually reduced as the 787s come on board (including options and leased aircraft from ILFC). The 767-400s, on the other hand, would likely be kept because they are real money producers on European flights. The 787s would excel on the Asian and longer-distance routes. It's all about high-margin international travel in the future...

 

[jke406]

Delta partially made the decision to retrofit the 767s based upon the long lead time for 787s (it missed the boat on orders).

Delta "missing the boat" and foregoing that debt will be the difference in having the new HQ in ATL and not MSP....and being called "Delta" and not "Northworst."

Try again...who "missed the boat?"

 

[ultrarunner]

Unfortunately, a DAL / NWA merger IS about reducing capacity to drive up prices.

It's supposed to be about that!

The sooner the better!

 

[General Lee]

If the decision is made in ATL, the 787 slots will probably be sold. It is another type.

Delta thinks the 777 is a better aircraft for its' needs and I'm guessing the 787 slots could be sold at a considerable profit. Besides, Delta is not going to want all the competition on those routes. They'll run the traffic through a hub and put it on a larger jet.

Unfortunately, a DAL / NWA merger IS about reducing capacity to drive up prices.

Delta would not give up on the 787s, that is why they never ordered any at the Paris Airshow, NWA already had some. Boeing is also an important creditor of ours. We will have 777LRs, 787s, and maybe a few 744s doing cargo out of ANC, using those all important cargo only rights into Asia.

As far as reducing capacity, a lot of that will be via RJs. Sure, there could be some DC9s parkings, but not all at once, and maybe a replacement will be found to cover them, like those 100+ MD90s that are still out there, at a bargain price. We have already done the check outs on a lot of them, and they are all getting replaced by A320s eventually at those other airlines (Saudia, China Eastern, China Northern, JAS, etc).

Bye Bye--General Lee

 

[General Lee]

It's supposed to be about that!

The sooner the better!

You can't just expect to reduce capacity and think it will stay that way. Southwest and others would love to take up the slack, and they will. A merger can reduce the fat at both airlines, like certain redundant departments (accounting, reservations, etc), redundant job positions--can't have two CFOs etc, and plenty of ticket counter space. (why have two ticket counters at one airport?) There is sure to be savings that way, but dumping planes and capacity will allow the LCCs to enter markets they could not before, and get free terminal space without paying for it.

Bye Bye--General Lee

 

[FDJ2]

Delta partially made the decision to retrofit the 767s based upon the long lead time for 787s (it missed the boat on orders).

I think the primary driver for the decision to pass on the 787 was the desire to avoid taking on long term debt at the beginning of a down cycle. The average age of the 767-300ER fleet is just shy of 12 years. The aircraft just isn't ready to be replaced yet and is doing a fine job. With a few inexpenses modifications the aircraft should do fine for the next decade. I agree that the 767 will need to be replaced, just not yet.

In the interim, DAL's international expansion is better served with additional 777s, 8 firm deliveries in '08 & '09, redeploying more 767-400s from domestic service to international service and taking delivery of 4 more 757ERs in Q1 '08. Domestic capacity will come down some as the domestic wide bodied aircraft continue to move to the international side with only 7 B737-700s scheduled for delivery in '08.

 

[FDJ2]

Delta would not give up on the 787s, that is why they never ordered any at the Paris Airshow, NWA already had some.

General, a merger is not a foregone conclusion yet. Plenty of speculation, but no announcement.

If DAL needed the 787 in the next 2-4 years, DAL would have ordered them. The ER fleet still has another decade+ before it's ready to be replaced. DAL needs more 777s. not 787s. There will be a time for the 787, it's just not now. We're heading into a down cycle, keeping the balance sheets in good order is more important than ordering aircraft you may want, but don't need.

 

[123]

I think the primary driver for the decision to pass on the 787 was the desire to avoid taking on long term debt at the beginning of a down cycle..... DAL's international expansion is better served with additional 777s, 8 firm deliveries in '08 & '09, redeploying more 767-400s from domestic service to international service and taking delivery of 4 more 757ERs in Q1 '08. Domestic capacity will come down some as the domestic wide bodied aircraft continue to move to the international side with only 7 B737-700s scheduled for delivery in '08.

You say that DAL doesn't want to take on long term debt. So is delta aquiring these aircraft with an off balance sheet type aquisition?

 

[ultrarunner]

You say that DAL doesn't want to take on long term debt. So is delta aquiring these aircraft with an off balance sheet type aquisition?

I think what the poster meant is that a 787 order would have committed quite a bit of debt.

Most of what is coming on-line are used birds.

 

[~~~^~~~]

On balance sheet. Any new airplane has to be a "slam dunk" profit maker before they are going to put precious capital on the line.

The 787's are expensive.

 

[123]

On balance sheet. Any new airplane has to be a "slam dunk" profit maker before they are going to put precious capital on the line.

The 787's are expensive.

Actually, it doesn't have to be a slam dunk profit maker, it has to be a positive NPV in the capital budgeting process. Now, there are many assumptions that will go into the calculations, but at the end of the day, the board has to be convinced of the increase in value that a long term project will bring. Do you really think that the 777's are not expensive? Is Delta able to secure capital at a much greater discount rate (serious question, I haven't taken the time to look at ratings)?

 

[FDJ2]

You say that DAL doesn't want to take on long term debt. So is delta aquiring these aircraft with an off balance sheet type aquisition?

The 777s, 757s and 737s are all existing fleet types, are either modest orders of used aircraft or pre-existing orders that work well with DAL's business plan and fleet plan. Taking on a new fleet type of 787s, particularly when they are not necessarily needed at this time, at the begining of what could be a recession may not be the best play.

Having said that, for all I know DAL could make a large order tommorrow, but I doubt it.

 

[Schwanker]

Sure, there could be some DC9s parkings, but not all at once, and maybe a replacement will be found to cover them, like those 100+ MD90s that are still out there, at a bargain price. We have already done the check outs on a lot of them, and they are all getting replaced by A320s eventually at those other airlines (Saudia, China Eastern, China Northern, JAS, etc).

Bye Bye--General Lee

GL,
Why would you park paid for DC-9s that have years of life left and a great track record to buy MD's and take on new debt? The -9's do a great job in the 100-125 seat cat--especially in markets under 1000 miles. From a pax perspective, they can't tell the difference as the interiors are quite nice.

Schwanker

 

[Noserider76]

GL,
Why would you park paid for DC-9s that have years of life left and a great track record to buy MD's and take on new debt? The -9's do a great job in the 100-125 seat cat--especially in markets under 1000 miles. From a pax perspective, they can't tell the difference as the interiors are quite nice.

Schwanker

That's one retirement needs to happen. The back does look great but the airplane, when I flew it, was one maintenance event to the next. Manual pressurization from DTW to PHL? Just another day at the office. It also has nowhere near the legs of an -88 and was often flown to the max resulting in a divert with any weather deviation. The -88 at DL are late 80's early 90's models and are far superior in every way to the 40 year old DC-9s.

 

[DTW320]

I agree that the MD-88's are superior, although the overheads on the NW -9's are much roomier and easier to stow the PurdyNeat than on DL. Also, you know that the -40's and -50's are nowhere near 40 years old. The DC9 also has the highest dispatch reliability record at NWA.

Besides, the whole point of the post was that the -9's are paid for. Are the -88's?

 

[clippyrip]

Everyone is so quick to call the end to the 9s. NWA may be parking a bunch of the smaller ones but the bulk of the 9 fleet is and will still be going for a while. They are paid for, that is the bottom line. Cheap cheap.

Relax with the "Henny Penny the sky is falling". If the two airlines merge and need to shed some weight, all they would have to do is slow/stop hiring. The retirements will take care of the rest. NWA is hiring all full pace right now and cannot meet the retirements. They are not even keeping pace with their deficit. Not to mention mergers do not happen overnight. Its not like they are going to announce a merger today and park the 9s tomorrow. RELAX.

Do I need to mention that nothing has been announced and that this is still speculation.....

 

[Noserider76]

I agree that the MD-88's are superior, although the overheads on the NW -9's are much roomier and easier to stow the PurdyNeat than on DL. Also, you know that the -40's and -50's are nowhere near 40 years old. The DC9 also has the highest dispatch reliability record at NWA.

Besides, the whole point of the post was that the -9's are paid for. Are the -88's?

There are 119 MD-88s and 16 MD-90s now. 63 MD-88s are owned and 56 are leased. All the MD-90s are owned. All are Cat III and have roughly 4 hours of range, and 142 seats or so (150 for the -90s).

I know the DC-9s are built like tanks and I would much rather see them than see their flying go away. I think you reach the point though where a cost-benefit would show leasing a more efficient, capable aircraft would be cost effective.

In the unlikely event of a merger...I wouldn't be surprised to see a A-318 order. I actually heard one of our managers say that was the most atractive 100 seat aircraft available at the moment.

 

[NuGuy]

That's one retirement needs to happen. The back does look great but the airplane, when I flew it, was one maintenance event to the next. Manual pressurization from DTW to PHL? Just another day at the office. It also has nowhere near the legs of an -88 and was often flown to the max resulting in a divert with any weather deviation. The -88 at DL are late 80's early 90's models and are far superior in every way to the 40 year old DC-9s.

Wow, I don't know where you flew the -9, but after a couple thousand hours flying NWA's -9s, I can tell you they are probably the MOST reliable A/C I've flown in my career.

The overhaul given them in the 90's was WELL worth it, and did more than just spruce up the back. Lots of little things that caused MX issues were replaced with new, modern systems, including a solid state battery charger, digital fuel quanity systems, proximity sensor gear position indicators and a digital presurization system.

The NWA -9s simply run, period. When they DO need something, like a generator or starter, I've seen them swapped out in a jiff (try that on a 'bus), and you are on your way.

I will grant you that the range is limited, compared to the -88, but then again, you don't really need it from MSP to FAR or OMA.

But the -88 STILL has a JT8 and still pokes along at 0.76, and it still leaks like a Doug, so give it a rest.

Nu

 

[Noserider76]

Wow, I don't know where you flew the -9, but after a couple thousand hours flying NWA's -9s, I can tell you they are probably the MOST reliable A/C I've flown in my career.

DTW

I will grant you that the range is limited, compared to the -88, but then again, you don't really need it from MSP to FAR or OMA.

True, but the problem was the company insisted on flying them from DTW to MIA.

But the -88 STILL has a JT8 and still pokes along at 0.76, and it still leaks like a Doug, so give it a rest.

OK, I'll give it a rest. I'm no big MD-88 fan and they get a lot of crap from the pilots here at DL but having flown both the -9 and the -88, there's no comparison.

Nu

I will say there are some of the best people I've ever worked with at NWA and I think you'll find the same type of folks at DL. I hope if this merger is forced upon us, it works out well for all.

 

[catIIIc]

On balance sheet. Any new airplane has to be a "slam dunk" profit maker before they are going to put precious capital on the line.

The 787's are expensive.

So are ordering the most expensive 777's that Boeing offers with different engines (GE's VS. RR on the current 777ER's

 

[General Lee]

GL,
Why would you park paid for DC-9s that have years of life left and a great track record to buy MD's and take on new debt? The -9's do a great job in the 100-125 seat cat--especially in markets under 1000 miles. From a pax perspective, they can't tell the difference as the interiors are quite nice.

Schwanker

The MD90s are newer, only cost around $9 million each with engines, have IFE capability (ours have IFE), can carry more pax, and are fuel efficient. As far as what our future management would do, that is an option. If they want to keep the DC9s, then great. We just don't want to see a mass parking without a replacement. The MD90s are ready now too---whereas a new replacement from Boeing could take years.

Bye Bye--General Lee

 

[General Lee]

I agree that the MD-88's are superior, although the overheads on the NW -9's are much roomier and easier to stow the PurdyNeat than on DL. Also, you know that the -40's and -50's are nowhere near 40 years old. The DC9 also has the highest dispatch reliability record at NWA.

Besides, the whole point of the post was that the -9's are paid for. Are the -88's?

The leases were reduced about $200,000 per month each to around $80,000 in BK. They can carry about 146 pax too.

Bye Bye--General Lee