Tony Sepanski

This certainly is a curious decision.


http://seattletimes.nwsource.com/htm...boeing080.html

South African Air dropping entire Boeing fleet

By David Bowermaster
Seattle Times aerospace reporter


BOEING, 2001
South African Airways plans to replace its new 737-800s with Airbus jets.

The call from Johannesburg woke Boeing Senior Vice President Doug Groseclose at 1:30 a.m. yesterday. The news was not good. After a hard-fought sales campaign, South African Airways had decided to purchase 15 Airbus A340 widebody jets, rather than Boeing 777s, to replace 14 aging 747s and two 767s.

That was not all. To fulfill its desire to work with one aircraft manufacturer, SAA also had decided to purchase 11 Airbus A319s and 15 A320s and phase out its fleet of 43 single-aisle 737s by 2011 — including 21 737-800s ordered two years ago.

"Obviously Boeing is extremely disappointed today," Groseclose said. "We had worked really, really hard to win their confidence."

All told, SAA, which up to now has operated an all-Boeing fleet, will purchase 41 Airbus jets with a retail value of $3.5 billion. The deal promises to be one of the largest of 2002, as the world's airlines continue to struggle with the aftershocks of Sept. 11.

Airbus hailed the purchase as an endorsement of its product line and in particular its twin-aisle jets, which have struggled against their Boeing competition.

"This is a significant victory for the A330/A340 program over the 777," said Mary Anne Greczyn, an Airbus spokeswoman. "A complete fleet change is as strong a product endorsement as any manufacturer can look for."

Airbus and Boeing have gone toe to toe in sales campaigns around the globe in recent years as Airbus has used aggressive pricing and incentives to entice carriers away from Boeing. The competitiveness has escalated as the pool of airlines able to buy planes has shrunk since Sept. 11.

While any win is significant in the current environment, it is hard to tell if the SAA deal signals any long-term shift in the balance of power between Boeing and Airbus — particularly because SAA's motives are hard to read, analysts said.

"I believe there's a bunch of inconsistencies with respect to the outcome and (Airbus') statements about operating economics," said Howard Rubel, an aerospace analyst with Goldman Sachs.

SAA President and Chief Executive Officer Andre Viljoen said, "Airbus offers lower operating costs and good product offering."

Yet Rubel said the operating costs of the 777 are highly competitive with those of the A340.

Price undoubtedly was a factor. Airbus insisted SAA's decision was based on performance, but Viljoen said SAA "negotiated a highly competitive net price for this new fleet."

In a not-so-subtle jab, Groseclose suggested Airbus made big concessions to get the deal done.

"Due to the lack of sales for the A340, Airbus was desperate to place these products somewhere," he said.

SAA's decision to turn its back on the 21 737-800s it ordered in March 2000 raised the most eyebrows. The airline has received 16 of those planes so far from lessor GATX Capital.

When SAA last October reported a loss of more than $60 million for 2001, Viljoen said problems with the 737-800, including high operating costs, slow turnaround times and passenger dissatisfaction, contributed to the dismal results.

Groseclose acknowledged SAA had "teething problems" when the planes were introduced, but he believed the problems were remedied.

"Everything we had done had met their expectations," Groseclose said.

Rubel, the analyst, said it is noteworthy SAA will not replace the 737-800s with A320s until 2010, which is about the time the planes will come off lease.

The reported problems may "heighten concerns" on the part of airlines such as EasyJet and Go that are currently deciding between 737s and A320s for their fleets, but Rubel added: "If (SAA) was really that unhappy with (the 737s), why are they waiting until 2010 to get rid of the plane?"

Political considerations may have come into play as well. The South African government has been favoring European military hardware over American products in recent years to improve trade and political relations with Europe, according to Richard Aboulafia, senior aircraft analyst at the Teal Group, a consulting firm. The same rationale may have tipped the scales toward Airbus, he said.

Whatever SAA's motives, Airbus is clearly happy to have the business.

Boeing, meanwhile, must hope the high-speed Sonic Cruiser now under development will give it a chance to get back in SAA's good graces.

"We've had a wonderful history with SAA," said Groseclose. "From a geographic perspective, the Sonic Cruiser would fit very handsomely into their fleet plans."

Wingman

In this case, you really need to read between the lines of this article. What SAA is really saying is this:

"We are in financial trouble and may have an extremely difficult time acquiring and maintaining a Boeing fleet of aircraft, which, by the way, are really far more superior than any Airbus product. However, because Airbus aircraft are dirt-cheap, we feel at this time that Airbus aircraft are a better buy for SAA and its shareholders."

We will have to wait and see.

TZTriStar500

I find it very odd that SAA had operated A320's and purchased the 737-800's to replace them. I remember Boeing making a big deal about the NG's replacing A320's. Oh well, sounds like politics to me as most of these deals lately have become.

__________________
Fly ATA - Indy's Hometown Airline

smoothjazz

This is really shocking news... I was in Renton last April and saw
brand new SAA B737-800 with winglets... I might be wrong, but
SAA took the very first in-production B737-800 with winglet model.
Hapag was the first to operate, their aircrafts were fitted afterwards...

Well, I'm gonna miss SAA Boeing fleets....

__________________
BENJAMIN

MY COLLECTION
http://www.diecastaircraftforum.com/...tion-1179.html

Springbok

Maybe you need to understand the whole story before discrediting an airline..

First of all.. during todays economic situation there are only a few airlines (such as Southwest) that are were able to post a bit of a profit while others, including major European and US Boeing operators also had to post a loss....

Second... the decision made by SAA is completely logical and economically viable, as it brings SAA closer to fleet communality in regards to the technical (cockpit), crew and maintenance aspect...
Another beneficial factor is the fact that Airbus narrow-body aircraft are capable of carrying containers (standard !), an option which only comes as an expensive extra if an airline would like to have a container carrying Boeing 757...... believe me, containers are also an important factor to be considered, especially with an airline that has realized the importance of additional cargo revenue.....

Third... SAA can only be considered smart for purchasing aircraft during these economic down times... as the rates and conditions never have been better...

Fourth... the B737-800 decision was made by SAA's former CEO, Mr. Coleman Andrews, and this decision was steered by certain personal benefits for Mr. Andrews (BTW... he is American)... The B737-800 is an aircraft that is not very well suited for the routes that it was intended for... operating within South Africa as well as to surrounding african countries....

Fifth... your superior Boeing Aircraft, in that case the B777, blew an engine upon take-off for a demonstration flight at JNB international.... kind of makes people realize that four engines are still better than two... no matter the size...

Don't try to judge something you don't know about....

Brgds

Springbok

Steve

Springbok,
You make some interesting points, but I do have a couple questions. First in regards to commonality, the only benefit Airbus can offer is in terms of cockpit commonality. I don't believe there is a maintanance benefit between the airframe lines. Case in point, Delta, which disposed of the A310 aircraft because they were too expensive to maintain when compared to their Boeings.

As for cockpit commonality, I'd be interested to see a spreadsheet or report detailing the savings generated by an airline due to flight deck commonality. Not that I doubt there is a savings, I just think the impact is over-stated as far as narrowbody to widebody commonality.

I do admit the A319/A320 are fine aircraft and very comfortable. The A318 is a big questionmark for now and the A321 is an underpowered attempt at a B757 competitor, IMHO. The A330 and A340 are less than stellar performance-wise; poor climb-out and unimpressive cruise speeds.

I do have questions on the A320 series, also... Although they have the ability to use cargo containers, how many airlines consistently use them? Maybe some of our airline friends can help out on this one? I had heard (from a somewhat reliable source) that United does not use containers on their A319/A320's.

How about that fuselage diameter issue? I know the A320 is 6" wider inside, but I have also heard that the width gain is at ankle height and the 737 is actually wider at shoulder height. Anyone know more about this?

OK, I think that's it for now...
Steve

b737gearboy

Springbok,
Don't waiste your time with this crowd trying to defend Airbus. These folks are soo drunk on Boeing it's sickening.

__________________
GO BUCKEYES!!!! NATIONAL CHAMPS!! O----H----I----O

Scott

Great arguments and factual analysis. I have nothing germane to add except to highlight the 777 engine failure during a sales demo. Any rational acquisition team recognizes the possibility of mechanical irregularity over the life of a product. The salient aspect is safe recovery of flight and landing. Whether it was a loss of one engine on a 777 or A-340 is irrelevant. A multiple engine failure is a statistical rarity, and often caused by fuel contamination, massive birdstrikes, or the "fodding" of a nearby engine. The last item has been largely eliminated by the podding of wing-mounted engines.

__________________
Fly the Friendly Skies of United

uniTED takes wing Feb 12, 2004

Sentinel Chicken

The 2 engines versus 4 engines debate is going to be with us for a very, very, VERY long time. The Boeing 777 was designed from the outset to be quite flyable on one engine and it IS the first jetliner designed to be ETOPS certified "out of the box". If you've ever read Twenty-First Century Jet by Karl Sabbagh, you'll find out that the design process for such a large twin wasn't taken capriciously yet is consistently capitalized by the salesmen pitching the A340 series and critics of ETOPS ratings.

And let's remember that four engines isn't a guarantee either- there was the British Airways 747 that encounted that volcanic ash cloud that resulted with what was then considered the improbable- flameout and shut down of all four engines. And there's also the crash on takeoff of a USAF E-3 AWACS aircraft, also equipped with four engines. Yukla 27 suffered multiple birdstrikes on takeoff out of Elmendorf AFB that flamed out 2 of the 4 engines.

Personally, four-engine proponents really need to stop hyperventilating about their perceived benefits. Statistically, it's not necessarily safer but in some cases worse, since you have double the propulsion systems now to fail, increasing failure chances twice. But, as Mark Twain, once said, "There are lies, damned lies, and statistics".

Now I may be wrong on this one, but the cross-cockpit commonality of the Airbus series is really only relevant across the A320 family and perhaps to a lesser extent the A330. I seriously doubt airlines will schedule A320 series pilots in the A330 or A340 as these larger aircraft typically go to the more senior pilots in the airline. Something as simple as the pilot hierachy renders the cross-deck commonality irrelevant unless the airline has figured a way around the seniority issue.

So in essence what you have is a pool of pilots for the A318/319/320/321 and a pool of pilots for the A330/340. From the standpoint of cockpit crews, this is no different than an airline that has 737s and 757s/767s (such as Amercan or Delta).

Performance-wise, I think the strong suits in the Airbus line are the A340-500 and -600 versions. Getting Trent engines I think has given them much better performance than the CFM-powered A340 versions.

__________________
Piss on noise abatement!

hernan

I want to say something regarding cargo containers. some airlines dont even use them. ATA never use them on their L-1011. we used belt loaders to load/unload their L-1011's. why? if the airline use cargo containers that means they has to use a LOADER .and that means extra money

__________________
FLY SOUTHWEST. THE ONLY WAY TO FLY !
COLLECT STAR JETS. THE BEST MODELS!

Scott

Interesting point, Hernan. Given that WN, ATA, and others don't use pallets, is it easy to turn such a large aircraft in short period of time? Lots of bags to be hand-loaded must mean people work fast!

__________________
Fly the Friendly Skies of United

uniTED takes wing Feb 12, 2004

Travelin' Man

I won’t lose any sleep over this one. Fact is the future of SAA is questionable at best. Their decision to go with Airbus and dump Boeing just reaffirms this.

Fact is the future of South Africa is in doubt. What with their recent currency crisis and lack of leadership in their government makes it clear that South Africa’s role as Africa’s economic powerhouse may come to a close soon. I was there not to long ago and I will tell you that I would not invest there. There are several other countries in Africa that make more sense. Fact is the Airline industry is very complex in Africa. Very few African airlines can survive without government subsidies. South African’s alliance agreements have never panned out to their full potential, and their long haul service faces stiffer competition with big boys like British Airways.

I believe that SAA’s decision to go all Airbus is the beginning of the end for this carrier. I just can’t see flying 14 hours from New Your to Cape Town on an A340? Please. It will take longer. The 747 is the quickest bird flying today. If I were Boeing I would tell them to F*** Off. Boeing has been there for SAA. If it were not for the 747 they would never have been able to take on their long haul service. Just look at what the 747SP did for their business. Heck their 732’’s are still flying today. How long do they think an A320 will last - What 10 years max? I think SAA should have asked Kenya Airways how they liked their Airbuses? Guess that is why they are going Boeing.

Also, has Airbus ever made a legitimate profit? I know that Boeing is still profitable? Let's see your books Noel,

Wingman

Show me an airline that went to an ALL Airbus fleet that is A) still in existence and B) financially stable, with the exception of JetBlue.

Do you have a problem with Mr. Coleman because he conducted some shady deals or because he is an American?

In addition, your third statement assists in proving my point as to why SAA decided to go with the cheaper Airbus products as opposed to the more expensive, yet superior Boeing products.

As to your final statement, I believe you need to do a little more research if you think that only Boeing aircraft can have mechanical failures.

Ask Airbus how the brake tests on the landing gear on the latest version of the A340 went. Then, ask them how long it will take to repair the aircraft and resume testing.

Now, go back and suck your thumb!

Darryl

Weeeee. This is fun.

Agreed, fella’s. Cockpit commonality is an over sold feature. Chickie Babe said it best - Seniority plays a big part of the picture, as the touted commonality from an A318 to an A380 is a sales and marketing pipe dream. If I found out that an airline gave an A320 driver “Difference Training” and then slapped them into an A340 next week, I would never fly on that airline. And as for the engine loss on takeoff, well, I think that I would look at the engine manufacturer, not Boeing. Besides, a 777 has not flown itself into the ground under the power of its own computers, so sorry Bok, the Buck stops there. I also agree with T-Man in regards to how much Boeing has helped out SAA, only to have the door slammed in their face. So, telling SAA to F-off sounds purely appropriate. Besides, since SA went native, the place has been in a steady decline, anyway.

BTW “Gear ‘ol Boy, this is not an Airbus bashing forum. Prove us wrong and set us on the path to Airbus bliss. Besides, don't fret too much, as Uncle Herb and his fleet of Mustard Rockets just may put you back into the employment bracket.

Sean1999 Ram Air TA

I give SAA a year before they toss in the towel and close the doors for good

Sean

Ming

Well, here are my $2.00 worth of opinion:

1. An airlines does not care whether the aircraft is a Boeing or an Airbus. What they want are profits at the end of year rather than collecting the 1:1 scale models that do not make a dime. There are many aspects and factors when considering for fleet modernization, route structures, aircraft utilization, logistic, life cycle cost of ownership, and etc. Certainly geo-political factors are big considerations and being SA has closer tie with Europe I am not surprised that SAA chose Airbus. This is the exact reason that AA, CO, and DA chose to operate Boeing only fleet - absolutely nothing wrong with that. Furthermore, it looks to me SAA is doing this in a logical and orderly fashion as this is a long-term fleet modernization program that will eventually take place at the end of their 737-800 leases. Also it looks good on their book to finally have assets rather than liabilities. If low acquision costs is indeed the case, more brownie points to their accounting.
2. Cockpit and fleet commonality is a big consideration for operation. This is precisely the reason why SWA chose to fly only 737. It looks like the facts are twisted on the Airbus cockpit commonality discussed here. Airbus never advertised that pilot of A320 can fly in a wide body A330/A340 with short training. Show me an official Airbus document that says that.
3. "A320 flown itself into ground....." that is really a poor argument in my book if not totally illogical in making an assessment on the safety record of an aircraft. Give me one instance of "A320 flown itself into the ground" and I will give you hundreds thousands of instances that A320 had perfect take-off's and landings. Of course, the same logic applies with the isolated problem of 777 engine at a demo flight and 737 rudder problems.
4. Brake system problem of A340-600 ? Remember this aircraft is still under development. Problems are expected and that is why test is conducted to verify the design. This is basic system engineering 101. It was a test flight not a revenue service. Simply go back to the design table and modify the system and try again. That's why an airliner cost tens of millions.

I am glad there are Boeing and Airbus to keep each other honest. I would hate to be in a situation that there is only Boeing or Airbus. In business world you win some and you lose some - no big deal. I am not waving Boeing or Airbus flag here just want to present some facts and rattle Darryl' cage........

Wingman

You have some good points Ming.

Your observation with regard to the braking problems on the A340-600 was exactly the point I was trying to present in my last statement; not all aircraft are perfect and the fact that a B777 blew an engine during a demo flight goes to prove this. Perhaps I did not go far enough when presenting my argument.

However, having said this, I still believe that the B777 is a superior aircraft against the A340 series.

As far as your argument on fleet commonality, I , like many others, am still puzzled as to why SAA has decided to transition to an all Airbus fleet while they were already in the process of accepting brand-new B737NG aircraft.

I do believe that this is a result of economics, not necessarily politics. Airbus most likely made an offer to SAA that was too good to pass up. Unfortunately, this offer probably involved selling aircraft far below the normal selling price, which Airbus has been known to do.

Helmsman

If it was really economics, then why wait until the lease expires on the 737-800's in 2010? Politics oils the economical wheel, but still seems like an illogical decision re: the 737's, to oscilate between the two types. Do they really know what they want?

Four engines good, two engines bad does not hold water in this argument. SAA (and anyone out there who does business) should know that one test flight blowout is not the be all and end all. Sure, it creates a bad impression, but these things happen. I will be interested to know what type they choosed for those longer range African operations. A340 is okay for long/ultra long haul, but which one is going to replace the 767's?

b737gearboy

Now Darryl your undying patriotism is certainly admirable, especially in our current world political situation. However, even a flag waving, patriotic, non-hyphenated American like myself must correct your distortions of the truth about our socialist left-wing liberal friends in Europe. What accident are you refering to about an Airbus flying itself into the ground? The A320 at the airshow in France?
Once again,sigh, my experience in Boeing vs. Airbus is limited to the 737 and A320. I still stand by my OPINION that the A320 is a far superior machine to the antiquated 737. As I have stated in the past and will reiterate again I love Boeing, I cheer for them, it pains me greatly when Airbus gets an order over Boeing. Anyway, the difference between my opinion and yours is that I have detached myself emotionally and set my flag down momentarily (not letting it touch the ground of course) to allow myself to clearly THINK.
And yes I would happily fly Herb's inferior mustard rockets, it doesn't matter what I fly I just want a good schedule and a fat paycheck!!!!!!!
By the way how's the Rice Rocket running, they making those in the US yet? Or is that a Duccatti(sp?)? I hear the Italians contract Airbus to make parts for those things. Let the games begin!

__________________
GO BUCKEYES!!!! NATIONAL CHAMPS!! O----H----I----O

Clip

The tires on that A340-600 were reinforced (for test purposes) and exceeded the strength of the rims. An ugly picture? Absolutely. But please remember that the aircraft is undergoing TESTING to reveal problems before entering service.

__________________
Jet Delta's Big Flies

Ming

I thought I forgot to say something about the statement above. As far as I am concern the future of South Africa is vested in all the people in South Africa which includes all the white Dutch and British decendents as well as the blacks. They are all "South Africans" in my book and they will tell you this as well.

Wingman: Points welll taken. However, I would count JetBlue as a point for Airbus and SWA for a point for Boeing as success stories for both products. It is only fair. As for failures, I can count as many Boeing exclusive operators that loss money as well as Airbus exclusive operators.

Travelin' Man

I don't like gone native statement as well. SA is a diverse country but is suffering some tough economic times.

Darryl

Oh God, can we have a group hug now. Give me a break.

kakspat