Introduction to Fleet Planning Bruce Tecklenburg

Network, Fleet and Schedule

Strategic Planning

Module 7: 31 March 2015

Istanbul Technical University

Air Transportation Management

M.Sc. Program

2

Lecture Outline

World Airline Fleets

Commercial Aircraft Manufacturers

Airline Fleet Sizes, Average Seats 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

3

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

4

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”

Shares most of larger airplane (125+ seat) market with Boeing

Embraer (Brazil)

Developed small regional jets, now focusing on “E-jets” with 75-110

seats

Bombardier (Canada)

Turboprops; also shifting focus from 50-seat regional jets to larger “C-

jets”

5

Airline Fleets – U.S. Airline Fleets are

Substantially Larger

Source: Airline Business Top 200 Airlines Traffic 2013

0

100

200

300

400

500

600

700

800

900

1,000

TOTA

L A

IRCR

AFT

6

Average Aircraft Size by Region

Courtesy: Kamala Shetty, MIT; Data Source: OAG - Oct. 2010

Predominantly Widebody

Large numbers of

regional aircraft

Turboprop

“Island Hoppers”

7

Average World Wide Fleet Ages

Courtesy: Prof. R. J. Hansman

Data Source: airliners.net, 2014

8

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, long-

haul” 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 A320 and Boeing 737-800 are competing

aircraft types, as they are both new generation aircraft with

approximately 160 seats with similar range capabilities.

9

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).

10

A318

A319neo

A320

A321

717

737-600

737-700

737-800

737-900ER

757-200

757-300

E135

E145

E170

E175

E190

E195

CRJ-200

CRJ-700

CRJ-900

C110

C130

0

50

100

150

200

250

0 1000 2000 3000 4000 5000 6000 7000 8000

SE

AT

ING

CA

PA

CIT

Y

RANGE (KM)

Narrow-body Jet Aircraft

Newest Aircraft Types in Green

Adapted from: Belobaba et al (2009)

A321neo

737-9 MAX

737-8 MAX

A320neo

737-7 MAX A320

11

Bombardier CRJ 200/700/900/1000

CRJ-200 CRJ-700

CRJ-900 CRJ-1000

12

Embraer E170/E175/E190/E195

E-170 E-175

E-190 E-195

13

Boeing 737NG “Next Generation”

737-700

737-800

737-900ER

14

Airbus 320 Family

A320

A319

A321

15

Boeing 757 (Out of Production)

757-200W 757-300

16

New Single-Aisle Developments

Bombardier C-Series Embraer E2 Family

Boeing 737MAX

Airbus A320neo

17

A350-900

A330-200

A330-300

A340-200

A340-300 A340-500

A340-600

A380-800

747-8

747-400

767-200ER

767-300ER

767-400ER

777-200 777-200ER

777-200LR

777-300 777-300ER

787-8

787-9

0

100

200

300

400

500

600

8000 9000 10000 11000 12000 13000 14000 15000 16000 17000 18000

SE

AT

ING

CA

PA

CIT

Y

RANGE (KM)

Wide-body Jet Aircraft

Newest Aircraft Types in Green

Adapted from: Belobaba et al (2009)

787-10 A350-1000

777-8X

777-9X

18

Boeing 767

767-200 (Out of Production)

767-300ER

767-400ER

19

Airbus A330 / A340

A330-200 A330-300

A340-300 A340-600

A330-300

20

Boeing 787 Dreamliner

787-8 Dreamliner

787-9 Dreamliner

21

Boeing 777

777-200ER

777-300ER

777F

22

Boeing 747

747F

747-400

747-8 Intercontinental

23

Airbus 380

24

New Twin-Aisle Developments

A330neo A350 Family

787-10 Dreamliner

777-8X

777-9X

25

Source: Ascend, March 2015

Jet Aircraft Orders by Region

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Africa Asia-Pacific Europe LatinAm/Carib

Middle East NorthAmerica

Unidentified

Twin-Aisle

Single-Aisle

26

Aircraft Orders by Manufacturer and Type

0

1,000

2,000

3,000

4,000

5,000

6,000

A320 A330 A350 A380 737 747 767 777 787

Source: Ascend, March 2015

Airbus Boeing

27

Emerging carriers have over 800 aircraft

on order; ¾ are for wide-body aircraft

0

20

40

60

80

100

120

140

160

A320 A330 A350 A380 737 777 777X 787

Emirates Etihad Qatar Turkish

Source: Ascend, March 2015

28

Turkish Airlines Passenger Fleet (2015)

Airbus A320:

• A319: 14

• A320: 33

• A321: 43

Airbus A330:

• A330-200: 16

• A330-300: 18

Airbus A340:

• A340-300: 6

Boeing 777:

• 777-300ER: 16

Boeing 737NG:

• 737-700: 3

• 737-800: 68

• 737-900ER: 10 Source: Ascend Feb 2015, Excludes wet-leases and subsidiaries

29

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

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

A330-200 16 16 242

A330-300 18 12 9 3 30 277

A340-300 6 (3) (3) 0 270

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

777-300ER 16 16 6 7 3 32 326

227 215 30 34 9 30 26 43 10 409

737 Family

777

Total

Fleet Entry / Exit by Year

Airbus

A320 Family

A330

A340

Boeing

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Fleet Forecast (2021): Turkish Airlines

Airbus A320:

• A319: 14

• A320: 33

• A321: 68

• A321neo: 72

Airbus A330:

• A330-200: 16

• A330-300: 30

Boeing 777:

• 777-300ER: 32

Boeing 737:

• 737-800: 64

• 737-900: 15

• 737MAX: 65

31

Fleet Operating Outlook (2014 - 2021):

Turkish Airlines

Aircraft

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

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

Total 227 319,477 120,741,853,806 409 579,759 207,908,421,037 81% 72%

100%

-100%

67%

-100%

-6%

50%

2021 Change

0%

0%

58%

Operating Peformance 2014