Introduction to Fleet Planning Dr. Peter Belobaba and Ali Hajiyev Istanbul Technical University Air Transportation Management M.Sc. Program Network, Fleet and Schedule Strategic Planning Module 7: 29 March 2016
Lecture Outline World Airline Fleets Commercial Aircraft Manufacturers Airline Fleet Sizes and Age Passenger Aircraft Market Categories Evolution of aircraft types by size and range Overview of current commercial aircraft types Narrow-body jet aircraft Wide-body jet aircraft Aircraft Orders and Fleet Plans Current orders by region, type and manufacturer Focus on emerging global carriers Turkish Airlines: Orders and fleet outlook 2
FLEET PLANNING Fleet composition is a long-term strategic decision Fleet is the total number of aircraft that an airline operates, as well as the specific aircraft types that comprise the total fleet. Each aircraft type has different technical performance characteristics (e.g., payload capacity and range ) Affects financial position, operating costs, and especially the ability to serve specific routes. Large capital investment with a long-term horizon: US $50-60 million for narrow-body 150-seat airplane $180+ million for mid-size (220-300 seats) long-range Boeing 787 $300+ million for largest Airbus A380 (400-550 seats) Depreciation impacts on balance sheet last 10-15 years Some aircraft have been operated economically for 30+ years 3
Commercial Aircraft Manufacturers Boeing (USA) Largest producer of commercial (and military) aircraft Acquired McDonnell-Douglas Aircraft in 1997 Airbus (Europe) Launched as a consortium owned by several European countries in 1967, now publicly traded as Airbus Group Has captured 50% market share of large jet aircraft Embraer (Brazil) Developed small regional jets, now focusing on E-jets with 75-110 seats Bombardier (Canada) Also shifting focus from 50-seat regional jets to larger C-jets 4
Airline Fleets 2014 US Airline Fleets are Substantially Larger 1200 1000 * 800 Aircraft in Fleet 600 400 200 0 * Source: Airline Business Top 200 Airlines Traffic 2014 5
Average Worldwide Fleet Ages Data source: Airfleets.net (2015) 6
Passenger Aircraft Categories Commercial aircraft are most commonly defined by their range and size: The range is the maximum distance that it can fly without stopping for additional fuel, while still carrying a reasonable payload of passengers and/or cargo. The size of an aircraft can be represented by measures such as its weight, its seating or cargo capacity, as indicators of the amount of payload that it can carry. Broad categories such as small, short-haul or large, longhaul aircraft can include several different aircraft types by different manufacturers. Aircraft with similar capabilities are regarded as competitors in the airline s fleet planning decisions. For example, the Airbus A320neo and Boeing 737 MAX 8 are competing aircraft types, as they are both new generation aircraft with approximately 165 seats with similar range capabilities. 7
Aircraft Categories - Trends Historically, largest aircraft were designed for routes with the longest flight distances. Relationship between aircraft size and range was almost linear. Airlines wishing to serve a very long-haul non-stop route had to acquire the Boeing 747. Airlines now have a much wider choice of products by range and capacity in each category: Range of new aircraft in the small category (100-150 seats) has increased dramatically. US transcontinental routes are now being flown with Boeing 737NG and Airbus 320 series aircraft. Sizes of new long-range aircraft have decreased substantially. Airlines serve certain lower-demand long-haul non-stop international routes with Boeing 757 (180 seats) e.g., Newark to Lisbon, and Los Angeles to Maui (Hawaii). 8
Narrow-body Jet Aircraft Typical Passenger Capacity and Range 250 Newest Aircraft Types in Green 757-300 SEATING CAPACITY 200 150 100 717 CRJ-900 CRJ-700 E195 E175 E170 C130 C110 E190 A321 A321neo 757-200 737-900ER 737-9 MAX 737-800 737-8 MAX A320 A320neo 737-700 737-7 MAX A320 A319neo 737-600 A318 50 CRJ-200 E145 E135 0 0 1000 2000 3000 4000 5000 6000 7000 8000 RANGE (KM) (Adapted from: Belobaba et al (2009) 9
Bombardier CRJ 200/700/900/1000 CRJ-200 CRJ-700 CRJ-900 CRJ-1000 10
Embraer E170/E175/E190/E195 E-170 E-175 E-190 E-195 11
Boeing 737NG Next Generation 737-700 737-800 737-900ER 12
Airbus 320 Family A319 A320 A321 13
Boeing 757 (Out of Production) 757-200 757-300 14
New Single-Aisle Developments Bombardier C-Series Embraer E2 Family Boeing 737MAX Airbus A320neo 15
Wide-body Jet Aircraft 600 Newest Aircraft Types in Green A380-800 500 747-8 SEATING CAPACITY 400 300 200 747-400 777-9 777-300 A340-600 777-300ER 787-10 A350-1000 777-200 A330-300 777-200ER A340-300 A350-900 A340-500 787-9 767-400ER A330-200 A340-200 787-8 767-300ER 767-200ER 777-8 777-200LR 100 0 8000 9000 10000 11000 12000 13000 14000 15000 16000 17000 18000 Adapted from: Belobaba et al (2009) RANGE (KM) 16
Boeing 767 767-200 (Out of Production) 767-300ER 767-400ER 17
Airbus A330 / A340 A330-200 A330-300 A340-300 A340-600 18
Boeing 787 Dreamliner 787-8 Dreamliner 787-9 Dreamliner 19
Boeing 777 777-200ER 777-300ER 777F 20
Boeing 747 747-400 747F 747-8 Intercontinental 21
Airbus 380 22
New Twin-Aisle Developments A330neo A350 Family 787-10 Dreamliner 777X Family 23
Large Jet Aircraft Orders by Region (January 2016) 3500 3000 Widebody Narrowbody 2500 Current Backlog 2000 1500 1000 500 0 Africa Asia-Pacific Europe Latin America Middle East North America Unidentified Source: Manufacturer websites www.airbus.com, www.boeing.com, retrieved 2/23/16 24
Large Aircraft Orders by Manufacturer and Type (January 2016) 6000 5000 Current Generation Next Generation (neo/max/etc.) Current Backlog 4000 3000 2000 1000 0 A320 A330 A350 A380 B737 B747 B767 B777 B787 Airbus Boeing Source: Manufacturer websites www.airbus.com, www.boeing.com, retrieved 2/23/16 25
Emerging carriers have over 800 aircraft on order; 66% are for wide-body aircraft 160 140 120 Unfilled Orders 100 80 60 40 20 0 A320 A330 A350 A380 737 777 777X 787 EMIRATES ETIHAD AIRWAYS QATAR AIRWAYS TURKISH AIRLINES Source: Airbus & Boeing order and delivery schedule, retrieved Feb 24, 2016 26
Turkish Airlines Fleet (2016) Airbus A320: A319: 14 A320: 29 A321: 56 Airbus A330: A330-200: 20 A330-300: 26 Airbus A340: A340-300: 4 Cargo: A310: 3 A330-200: 7 Boeing 777: 777-300ER: 24 Boeing 737: 737-700: 2 737-800: 96 737-900: 15 Embraer : E190: 2 E195: 3 Source: Turkish Airlines website, retrieved Feb 24, 2016 27
Fleet Outlook (2015-2021): Turkish Airlines Conceptual THY Fleet Plan 2021 Average In Service On Order 2015 2016 2017 2018 2019 2020 2021 Total Seats/AC Airbus A320 Family A319 14 14 128 A320 33 33 152 A321 43 25 13 10 2 68 172 A321neo 72 4 16 17 23 12 72 172 A330 A330-200 16 16 242 A330-300 18 12 9 3 30 277 A340 A340-300 6 (3) (3) 0 270 Boeing 737 Family 737-700 3 (3) 0 143 737-800 68 20 20 (6) (11) (5) (2) 64 166 737-900ER 10 5 5 15 151 737-8 MAX 55 20 15 20 55 166 737-9 MAX 10 5 5 10 151 777 777-300ER 16 16 6 7 3 32 326 Total Fleet Entry / Exit by Year 227 215 30 34 9 30 26 43 10 409 28
Fleet Forecast (2021): Turkish Airlines Airbus A320: A319: 14 A320: 33 A321: 68 A321neo: 72 Boeing 737: 737-800: 64 737-900ER:15 737 MAX: 65 Airbus A330: A330-200: 16 A330-300: 30 Boeing 777: 777-300ER: 32 29
Fleet Operating Outlook (2014-2021): Turkish Airlines Aircraft Operating Peformance 2014 2021 Change Seats Deps/Day Ave. Stage Length Fleet Departures ASKs Fleet Departures ASKs Departures ASKs Airbus A319 128 6.2 1,085 14 31,599 4,418,266,617 14 31,599 4,418,266,617 0% A320 152 5.0 1,258 33 60,717 12,001,582,985 33 60,717 12,001,582,985 A321 172 4.4 1,686 43 69,420 21,278,417,267 68 109,780 21,278,417,267 A321neo 172 4.4 1,686 72 116,238 33,698,309,453 A330-200 242 1.4 2,748 16 8,083 5,604,948,833 16 8,083 5,604,948,833 A330-300 277 2.7 4,729 18 17,586 23,689,686,276 30 29,310 38,391,434,076 A340-300 270 1.8 5,137 6 3,871 5,370,927,937 0 - - Boeing 737-700 143 5.7 1,112 3 6,218 857,021,015 0 - - 737-800 166 4.1 1,386 68 102,868 22,555,215,003 64 96,817 22,278,283,978 737-900ER 151 3.2 3,018 10 11,565 5,270,931,209 15 17,348 7,906,396,814 737-8 MAX 166 4.1 1,386 55 83,202 19,145,400,293 737-9 MAX 151 3.2 3,018 10 11,565 5,270,931,209 777-300ER 326 1.3 7,702 16 7,550 19,694,856,664 32 15,100 37,914,449,512 100% Total 227 319,477 120,741,853,806 409 579,759 207,908,421,037 81% 72% 0% 58% 67% -100% -100% -6% 50% 30