Issue 364: Fleet Moves

Still, with rear door boarding there is always at least one passenger – usually more! – who doesn’t look at their boarding pass and boards via the front of the aircraft even though they are bound for row 25, adding to the logjam as passengers squeeze past each and hunt for elusive overhead locker space. And what if wet weather means front door boarding and deplaning only?

So just how painless, or painful, will the boarding process be for Virgin’s new 737 MAX 10s when they come in 2022? Assuming the airline fits its MAX 10s with 200 or so seats in a two-class configuration, that’s about 30 more passengers to board and deplane each sector, and 30 more rollaboard bags looking for overhead bin space.

But of course it is that extra seating that gives the MAX 10 its attraction. Boeing – naturally – promotes the MAX 10 as the world’s most efficient narrowbody airliner. That’s a claim that Airbus will dispute, and respected airliner economics analyst Scott Hamilton of Leeham News has written there is “no real advantage” in operating economics between the MAX 10 and its Airbus A321neo competitor.

Nonetheless, and while the 737 MAX 10 may lack the A321neo’s (and certainly the A321LR’s) range and airfield performance, it is lighter than its Airbus competitors and on transcontinental flights it promises to be about as efficient a way as possible to move a passenger from one side of the continent (whether Australia or the US) to the other.

And that should give Virgin Australia a worthwhile competitive advantage over Qantas, whether against the Red Roo’s 737-800s or A330-200s on transcon and trunk domestic routes.

Of course, the airline profitability recipe contains more than just the ‘aircraft direct operating cost’ ingredient – there is aircraft financing, crewing, maintenance, yield management, fuel hedging and so much more – but it was interesting to read that Qantas Group chief executive officer Alan Joyce told analysts in a briefing about his airline’s latest financial results that the “competitiveness of our fleet is not based on average age but on the technology curve. The vast majority of the group’s aircraft are similar to the aircraft in the fleets of our competitors.”

That “technology curve” will move once the 737 MAX 10 enters Virgin Australia service, even more-so than when the smaller 737 MAX 8 arrives in November 2019. While the Qantas Group does have the A320neo series on order, for now at least those aircraft are slated for Jetstar, and when those first aircraft, A321LRs, arrive, they seem destined for international services. So for a few years at least Virgin MAXes will have a distinct operating cost advantage against Qantas’s 737NGs where the two types go head to head.

We can assume Qantas won’t stand still, and in the normal course of events, given it tends to retire aircraft after 20 years’ service, presumably it will look to begin replacing its oldest 737-800s from early next decade anyway. And mid-next decade it may look to not just reclaim “technology curve” parity with Virgin but in turn seize a new advantage, given the strong interest it has show in Boeing’s proposed New Midsize Airplane (NMA).

But for a few years at least, Virgin looks to be grasping a meaningful competitive advantage in the domestic airline market, the sector of the industry where both Qantas and Virgin generate most of their profits.