Sunday, December 23, 2012

Air India's Sees A Cash Flow Change With 787

Air India, my favorite disgruntled Boeing customer sees a cash induction for each "787 Induction". Now that Air India is operating a long legged flight route to Germany from India.

Fill These Seats And Problem Solved, For Air India

Travel Biz Link and Quote:
"Air India, which is struggling to make money on international routes, has managed to turn around its loss-making Delhi-Frankfurt sector after it deployed Boeing's 787 Dreamliners on this route since October this year, as per an ET report. The national carrier, which has ordered 27 Dreamliners, maintains that the superior technology of this aircraft will help the company reduce maintenance and fuel cost. “The airline is able to save at least Rs 20 lakh per flight after the Dreamliner is deployed. After four long loss-making years, we are making profit on this route now,” said a top Air India official, who didn't wish to be identified."

For those folks who are not in tune with foreign currency translation. The brief analysis is R's 20 lakh equals about $44,000 per flight savings. Even though the 787 does not hold as many seats as the 777-200, the main complaint coming from operations is canceled since, "Air India is not filling all those seats on the 777".  When that day comes Air India will be ready to order some -10's.

Back in November, 2012 on an earlier Blog, I said this about a hypothetical flight from Frankfurt, Germany to Kyoto, Japan using  the A-330 vs. the 787.

The difference in cost is now a  difference between (25,760 gals., for the A-330)- (19,000 gals, for the B-787) equaling 6760 gallons in fuel savings flying the Boeing aircraft.  6760 (gal) X $2.969 a gallon cost provides the airline with savings on one-way of about $20,000, and $40,000 round trip." 

Since Air India is reporting a $44,000 round trip operational savings on the Delhi to Frankfurt round trip. The 6,600 mile round trip includes all operational costs not just fuel. Fuel savings of 20% and operations of 30% savings. This is an exceedingly good number for Air India.  They will want more aircraft now! However, they need more money now!  The Government of India has its hand in everything Air India.  Showing these numbers through the press may light up some bulbs in the government's thinking, on how they can get more loaded airplanes on long legged routes. There is money for everybody flying the 787.