" Blueskies" wrote in message Doesn't everyone lease the planes (or
powerplants) these days, or at least have some sort of power by the hour
performance based logistics maintenance program these days?

In most jet airlines, fuel is 50% of the cost. One year ago, jet-A was
around $1.26/gal for my employer. Now it is just under $2.00/gal (not
considering hedges). Replacing an MD-80 with a B-737NG or an A-320 results
in 30% fuel savings. Even with the higher lease payments, my employer saves
$200,000.00 per airplane replaced in the first year.

It's a Catch-22 for the legacy carriers who are stuck paying high fuel costs
because they don't have the cash to update their fleet. They don't have the
cash to update because they have high fuel costs. Of the discount carriers
ringing up a profit, how many are flying high bypass engines and how many
are flying medium bypass engines? Everytime I see a Northwest DC-9, I wonder
how long before they file for bancruptcy (question recently answered- longer
than I expected).

Why did Boeing discontinue the B757? I'm not sure, but I do know that the
A-321 hauls nearly as many passengers and yet the A-321 has a MGTOW that is
60,000 pounds lower. It takes a lot of fuel to haul around an extra 60,000
pounds. What will the new B-787 weigh? Why did Airbus feel threatened enough
to counter with the launch of the A-350 program? It's about saving fuel.

As for leasing, there are many ways to structure a lease. Many times, large
shareholders will own an aircraft (though the paper trail may be long and
convoluted) and lease it to the airline, often at a sweetheart rate. With
this method, the shareholder makes money on it's investment in the airline
even if the airline doesn't make money.

Power by the hour contracts are available for both old and new engine
series. The difference is that the newer engine models have fewer
life-limited component times resulting in less down time. The same thing
applies to other components. Brake overhauls can be contracted for old and
new planes. The difference is that the old style steel brakes have more down
time, and man-hours required for replacing, than the new style carbon
brakes. Contract or not, someone has to pay the difference.

D.