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Boeing 787 -9 Airline Competitive Analysis

Boeing has so far delivered 787 -9 aircrafts to four airlines, All Nippon Airways (IATA Airline Code – NH), Air New Zealand (NZ), United Airlines (UA), and Virgin Atlantic Airways (VC). Two other airlines are soon to join this league. They are American Airlines (AA) and Air Canada (AC) both with delivery scheduled for Q1 2015. Today, we will spend time introducing the 787-9 program and perform a competitive analysis of the airlines using this variant.

Boeing 787 – Introduction

While lots have been said about the the 787-8 variant since its first delivery to All Nippon Airways (NH) in 2011 (currently there are 26 operators of this aircraft), there is not as much written for the 787-9.

We will spend the next two posts to 1) introduce this plane type to the Experience The Skies readers from a configuration and flight route perspective and 2) predict where AA and AC should use these planes when they are delivered.

The 787-9 Program

Based on Boeing’s reference page, the 787-9 can seat up to 280 passengers in a 3 class configuration with a range of 8300 nautical miles (nm) or 15,372 kilometers. Here are some plane facts:

Boeing 787-9 Airline Competitive Analysis
Information taken from Boeing’s website on December 11, 2014 (All Rights Reserved)
787-9 Airline Competitive Analysis.002
Information taken from Boeing’s website on December 11, 2014 (All Rights Reserved)

First flight to first delivery only take 9 months because it shared a lot of common parts with 787-8 which was already certified.

Distance

Where can you go for 8,300nm ? We did some digging and note that you can fly from Chicago (ORD) to Manila (MNL) in about ~8,153 nm. That’s a flight that no airline is operating currently.

This is an illustration on where a plane can fly for around 8300 nautical miles
This is an illustration on where a plane can fly for around 8300 nautical miles

Analysis – Airline Competitiveness

We will separate our analysis into two parts, configuration and flight routes:

Part 1 – Configuration

The following infographic illustrates how all the airlines stack up with in terms of the number of seats available on the aircraft.

Boeing 787-9 Airline Competitive Analysis
Plane configuration information taken from from each airlines’ website on December 11, 2014 (All Rights Reserved)

We will introduce a new metric here to discuss how airlines manage its configurations. This metric is called Premium Class Index (PCI).  In a 3 class configuration, we will add together the number of business and premium economy seats (where it is offered) and divide that by the number of economy. The higher the ratio, the more likely the airline is targeting higher yield customers with more premium class products.  For example, NH’s current 787-9 configuration has a PCI score of 20.94 which is very high. The score reflects that NH is using the planes mainly for domestic trunk routes like Tokyo Haneda Airport (HND) to Osaka Itami Airport (ITM).

Here is the PCI analysis for the 6 airlines:

Boeing 787-9 Airline Competitive Analysis
Plane configuration information taken from from each airlines’ website on December 11, 2014 (All Rights Reserved)

NH is using this plane mostly for domestic operations right now and not surprisingly has the highest density out of the 6 airlines.

The other five airlines are using this aircraft for international operations and each employs a different strategy when it comes to the configuration.

  • UA is emphasizing its Economy Plus product by placing 88 seats in that configuration. The Economy Plus product has a 35″ pitch and a 4 degree recline instead of 32″ and 3 degree in Economy.
  • NZ is pushing for more leisure international customers going to New Zealand.
  • VS, AC and AA strike a balance between a mix of premium and economy class products. Though AC has the highest density amongst the three with 247 seats in economy. This signals that the airline expects there is a higher demand for lower yield passengers.

Part 2 – Flight Routes

The following infographic illustrates where the 5 airlines (NH, UA, NZ, AC and VS) are flying currently with their 787-9s. The first shows the domestic cities that NH is flying at the moment using this plane type. They are mostly between major trunk cities in Japan.

Boeing 787-9 Airline Competitive Analysis
Flight information as at December 11, 2014

The second shows where the remaining three airlines are flying. UA  has the longest flight with Los Angeles (LAX) to Melbourne (MEL) which was introduced on October 26, 2014.  VS is using it on a new route from London (LHR) to Boston (BOS) while NZ is testing the plane domestically from Auckland (AKL) to Perth (PER). It will serve Tokyo (NRT) and Shanghai in December when more planes arrive. AC will start flying to Dubai (DXB) and New Delhi (DEL) in November 2015 (refer to link for the news)

Boeing 787-9 Airline Competitive Analysis
Flight information as at December 11, 2014

Noted that all the other airlines are flying or have announced longer routes with AC expecting to fly the farthest from YYZ to DEL. This is indicative of the flexibility this plane offers for airlines to create new point to point markets where other aircrafts (e.g. Boeing 747/777 or Airbus A380) may be too big and not economical.

Next Time

Next time, we will explore other destinations AC and AA can use the 787-9 for in extending a competitive advantage over other airlines.

Follow this link for Part 2.

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