Future Route Opportunities
Part 1 of the Boeing 777-300ER series introduced the aircraft type (refer to link).
Part 2 of the series discussed some of the latest airline announcement using this aircraft to expand or introduce new markets (refer to link)
This part will focus on future opportunities for airlines looking to improve performance or expand market potentials (July 9 – additional pics posted on the SWISS Boeing 777-300ER design)
Swiss International Air Lines
Swiss International Air Lines (LX) based out of Zurich, Switzerland ordered 9 Boeing 777-300ERs (refer to news) to replace some of the 29 aging Airbus A330-300s and fuel inefficient A340-300s starting in 2016.
Future Opportunities Announced (2016)
The airline will be using these new aircrafts to serve the following destinations initially from its hub in Zürich Kloten Airport (ZRH):
The first wave of cities announced using this aircraft are to Star Alliance hub cities in San Francisco (Associated airline: United Airlines), Los Angeles (United Airlines), Bangkok (Thai Airways), Beijing (Air China), Johannesburg (South African Airways) and Singapore (Singapore Airlines). Other non-hub cities announced included: Hong Kong, Shanghai, and Sao Paulo. These cities all support good O&D premium traffic.
With a total of 9 Boeing 777-300ERs to be delivered to SWISS, the airline should consider the following future route opportunities as depicted in the following infographic:
All the cities recommended are hubs of other Star Alliance Members including: Vancouver (Air Canada), Houston (United Airlines), Taipei (EVA Airways), Seoul (Asiana Airlines), Tokyo (All Nippon Airways). Tokyo Narita is the only one already served by SWISS currently. Except for Seoul (operated by Korean Air Lines), none of the other cities on the future route opportunities list have direct non-stop flights from Switzerland planned. Finally, this list of cities were picked based on good to great feeder traffic, codeshare potentials from Star Alliance partners and O&D passenger traffic with higher yields.
Expect SWISS to unveil new First, Business and possibly economy product with its Boeing 777-300ER delivery. The current design is more than 4 years old and feature amenities that are behind its competitor’s premium products.
In addition, the airline might introduce a Premium Economy product similar to the one from Lufthansa Group. This has proven to be a popular option for business travellers in the past 2 years.
(Updated on July 9, 2015)
SWISS published a news release on its the cabin to be used on its new Boeing 777-300ER (refer to news release here).
In SWISS configuration the Boeing 777-300ER will offer 340 seats: eight in First Class, 62 in Business Class and 270 in Economy. And the totally-redesigned cabin interior of the new SWISS flagship will provide comfort and aesthetics to meet the most discerning of demands in all three seating classes.
The airline decided it will not add an Premium Economy product with this introduction. Check out the following video of the new cabin. Highlights include suite design for First class with 32″ HD screen, WiFi introduction and better seat design in both Business and Economy class.
United Airlines ranks number 2 in the biggest Airline list by passenger in 2013. It currently has a fleet of 80 older generation Boeing 777-200/777-200ERs and does not have any Boeing 777-300ERs on order. On paper, this gives the airline a disadvantage in carrying passengers (-70 in a four class configuration) / cargo (-1,900 cu ft/54m3) and flying further (-100nm).
In a discussion with Reuter (refer to news article), United Airlines Chief Financial Officer, John Rainey, confirmed that the Chicago based airline is considering different options to manage its Boeing 747-400 retirement program while balancing current market demands. It might convert some of the 787s on order into 777-300ERs for delivery sooner than its Airbus A350-1000.
The 777-300ERs would be a great replacement for the 747-400 as United Airlines only configures the aircraft with 374 seats in a 4-class configuration.
The airline should also use the 777-300ER to fill markets where there is a higher premium yield and/or slot restrictions. This include: Tokyo (NRT/HND), Beijing (PEK), Shanghai (PVG), London (LHR), Paris (CDG) and Sydney (SYD).
Buy versus Lease
If United Airlines decides to convert some of its 787 order into 777-300ERs, it should consider using the opportunity to update its first and business class products.
However, the Star Alliance founding member should also consider leasing some of the aircrafts from third parties until Boeing 777X aircrafts’ designs are finalized. This will allow the airline to repurchase some of the seats being retired with the 747-400s and save costs.
Other Cities for Consideration
Since not all cities are equipped to manage Airbus A380-800s, the Boeing 777-300ER is the next biggest aircraft in terms of passenger outside of the Boeing 747-400. Given its lower cost for available mile, this is the preferred aircraft for many airlines to use in their long-haul route network.
The following is a list of cities where variants of the Boeing 777-300ER could be useful:
Among the cities noted above, NRT/HND, PEK, DEL, BOM, SYD, PVG, LHR and CDG have significant slot restrictions. Airlines should consider using this larger aircraft if there is a business case.
Other Airlines for Consideration
The following is a list of airlines that could benefit with the Boeing 777-300ER:
Air Canada (AC) – Along with the Boeing 787-8 and -9 aircrafts, this Canadian airline can benefit with the 777-300ER on high yield routes to LHR, CDG and HKG from its hubs in Toronto (YYZ) and Vancouver (YVR).
Air China (CA) is using the 777-300ERs to expand to new markets in North America (such as Montreal and Toronto) from its hub in Beijing (PEK). Additionally, it can use this aircraft to Europe and Australia.
Air France (AF) – This french airline is replacing its aging 777-200s to key routes in Asia and North America.
American Airlines (AA) has 777-300ERs in service/on order and can benefit on using them to replace some of the 767-300s and 777-200s to LHR and CDG from key cities such as Miami (MIA), Dallas (DFW), Los Angeles (LAX) and Chicago (ORD).
British Airways (BA) has 777-300ERs in service/on order and can benefit on using them to replace aging 777-200s and 747-400s for routes to North America, Middle East and Asia. Additional planes can be use as a bridge the airline’s decision to place its long haul aircraft order.
Cathay Pacific (CX) already operates a large fleet of 777-300ERs. It will continue to use them to expand current markets like HKG to SYD and create future route opportunities in the Americas (e.g. Miami and Mexico City).
Emirates (EK) has a large order of 777-300ERs for use from its Dubai (DXB) base to secondary cities in Europe, North America and Asia.
Lufthansa (LH) does not have any 777-300ERs on order. It might be a good idea to lease some of these aircrafts as a bridge to replace fuel inefficient Airbus A340-300/600 before deciding on their replacements (Airbus A350 or Boeing 777X). It can also use its purchasing power to order for Austrian Airlines (OS), SWISS International Air Lines (LX)(as noted above) and Brussels Airlines (SN).
Thai Airways (TG) should replace all its 747-400s (and perhaps A380-800) with 777-300ERs to lower its cost of available miles to better compete with other Asian and European airlines. It has too much capacity with the larger aircrafts which are not performing as well on key routes.
Singapore Airlines (SQ) can use 777-300ERs to replace flights on regional 777-200s to the middle east and India. It can also use this aircraft to re-start flights to Canada which has schedule restrictions.
South African Airways (SA) uses a mix of Airbus A330s and A340s for its European, Americas and Asian routes. Given the unflavorable economics on operating these aircrafts, its international long haul network is not profitable (refer to discussion from Centre of Aviation). Boeing 777-300ERs have better economies and might be able to turn things around.
Boeing has a great aircraft in the 777-300ER. This will serve as the manufacturer’s long-haul product workhorse until the 777X’s design is finalized. It performs better than the Airbus A330 and A340 in different metrics and is a good alternative for airlines replacing their Boeing 747-400 or older generation 777-200s. It is also a good choice for airlines who do not have the need for a larger aircraft type like the Airbus A380-800 or the Boeing 747-8.