Yeah, exactly. We have all heard that the 787 yield higher RPK's - but my question is can anyone comment or point to information that explains the relationship between the reduction in the cost of oil (fuel) combined with the reduction in the cost of purchasing second hand but not really much older than AIR's current 777-200ER's. I am specifically interested in what meaningful impact this might have on the RPK's a 777 could yield then compared to the industry leaders - for arguments sake the 787.
Regarding the fit out - interestingly, we can assume a refit costs around 12 million (I assume NZD, so 8.5 USD?) based on this article here:
http://www.nzherald.co.nz/business/n...ectid=11349416 - AIR's fleet of 777-200ER's are coming up on 10 years, which means they're getting a refit at present.
I have started some scratchings in a spreadsheet which are missing a few things that are assumed equal and probably are not - maintenance costs for example. Currently (and perhaps incorrectly) assuming jet fuel at US $1.33 per Gallon and a cost of capital at 175 points above the prime rate I come out with a cost per passenger kilometre which is 19% cheaper on a full flight between AKL -> IAH with a 777-200ER vs 787. I will continue working on this over my "holiday" and see what conclusion I reach, but this quite interesting (unless i've completely cocked up my numbers) given I am working on a fuel inefficiency of 22% for the 777-200ER.
I am playing devils advocate here, but if the trend is for oil to be low for a while & we're about to see a few cheap 777's on the market. What does this mean for the plane manufacturers? What does this mean for the investment the various airlines have made in the new 787's - will we perhaps see some increased competition as a result? Have I completely stuffed up my numbers and if not does anyone want to purchase a 777-200ER as a timeshare? ;-)
I'm genuinely interested in hearing peoples thoughts & as always DYOR.