January 28, 2014

Why I think the A350XWB is a better fit compared to the B787 (The DREAMLINER)



Photo Credit: Boeing Images
As an aviation enthusiast, I want all companies to succeed; however, Boeing’s commercial program has been a huge disappointment lately. The B787 is a great aircraft, the first of its kind in commercial production, it set the precedence for the A350 to evolve, as well as future aviation, but unfortunately, the B787 program fell short and hasn't been very successful.

Like the A380 that flopped and did not break-even, the 787 faces the same fate. The program had a bright future because of its futuristic –ish design and components: 50% composite – less weight and more cost savings – and despite its positive outlook, it failed in delivery. I recalled its successful launch, it was highly publicized, but no sooner than the first sets of aircrafts entered into service, the problems began. It is no news about numerous problems that plagued the program, what had Boeing done wrong, AGAIN?

Airbus having realized that bigger is ALWAYS better, they went back to the drawing board and emerged well prepared with the A350XWB. I strongly believe that the Airbus Company built a better and more efficient design based on Boeing’s failure of the 787 program. Although it’s too early to praise the A350XWB which is scheduled for commercial service the first quarter of 2014, it is highly speculative and anticipated to perform well than its rival.

To me, I’m more concerned about which is better, on the surface, I will peak into these two aircraft and what they have to offer


The 787-800 seats 210 to 250 passengers (average of 230 passengers), and has a range of 7,650 to 8,200 nautical miles (14,200 to 15,200 kilometers) an average of 7,925 miles (14,700 kilometers) and a price tag of  $211 million (Source)

The A350-800 designed to carry 276 passengers in a twin aisle configuration (46 passengers more on average) flying up to 8,250 nautical miles (15,300 kilometers). The price tag is $261 million ($50 million) more than its competitor. 

To me, despite the higher expense, the Airbus is a more cost-effective aircraft and here is why
For the purpose of this exercise, I am assuming a 100% LF and also maximum range, given this scenario,




Boeing’s Available Seat Mile (ASM) is the following
At Min, ASM = 210 passengers x 7,650 nautical miles = 1,606,500
At Max, ASM = 250 passengers x 8,200 nautical miles = 2,050,000
At Avg, ASM = 230 passengers x 7,925 nautical miles = 1,822,750

For the purpose of calculation, I reversed the table to favor Boeing’s B787 because in realism, the more passengers on board (compensating for gross weight), the less fuel carried onboard resulting to less mileage flown.



Airbus ASM = 276 passengers x 8,250 nautical miles = 2,277,000

ASM or Available Seat Mile is an airline measure of carrying capacity of an airplane on a given trip. This measure is utilized by airlines to determine Revenue and Cost because not all seats (ticket) on the aircraft cost the same, therefore, this measure is very important to airlines. To calculate what ASM is, you simply multiply the aircraft's maximum available seats by the destination range or the number of miles flown. 

ASM = Available Seats x Distance flown,

  •  where available seats is total number of seats on the plane - reserved non-revenue seats. Non-revenue could be employees embarking on company business, security escorts like Federal Marshals, etc. 


For instance, A NY to Washington DC flight is operated with a B737-800 and has a seating capacity of 180 passengers flying a distance of 220 nautical miles. However, because it's headed into Washington, DC there are two Marshals on the plane with a mechanic. The ASM is 

ASM =[180 - 3]  x 220  = 38,940 available seat miles. 

I thought I explain this detail before continuing any further. Also, for the purpose of a fair comparison, I assumed the maximum seating capacity as the available seat and maximum range as the number of miles flown. 


Photo Credit: Airbus Images
The Airbus ASM is 11% higher than Boeing’s Maximum scenario; however, this result isn't definitive because it just tells us that Airbus has 11% more operating capacity than Boeing. To the average person, this technical jargon doesn't translate any meaningful information; therefore using Boeing’s Max scenario, it will cost an airline about 32.80 miles/seat (8,200 / 250) in comparison to Airbus which is 29.89 miles/seat (8,250 / 276). Yet, using the industry standard of seat/mile, Boeing s/m is 0.0304 and Airbus is 0.0334.

As you can see, Airbus has more seats/mile which translates into more revenue/mile (if filled). That’s a 9.7% advantage over Boeing. Imagine a 9% ticket reduction in the base fare, though not significant, but that is a good savings. This is how the numbers add up.

Although Airbus does come out on top regardless, it wouldn't make more sense if we don’t evaluate the cost of aircraft into these calculations. The B787 cost $211 million and the A350 cost $261 million, both -800 models, taking a closer look at the Purchase Price – ASM Factor, assuming everything is equal (subsidies, discounts, and what not),  what does it cost to operate a single seat per the cost of the aircraft?

The Initial Cost Price for the 787 is $211 million and the Max ASM is 2,050,000 and this equals to $102.93/ASM compared to Airbus which is $114.62. Using the Max scenario and giving a fair comparison to Airbus, adjusting for the average scenario, the result is $115.17, 55 cents more expensive.

What this means is for instance, assuming the Cost-Available Seat Mile is 8 cents, the aircraft has to fly for extra 7 miles to break-even on the cost and 7 miles when multiplied by the per mile rate, can be several hundred if not thousands of $$$.

In a more realistic scenario, I will give it hands down to the A350XWB, the aircraft though expensive for its class type, happens to be more cost efficient than the 787. Please keep in mind, other factors such as Direct Operating Costs, as well as others wasn't considered. This analysis just expresses the numbers on its face. 

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