6 ms·

When is a more fuel-efficient jet not a good idea?

by BitwiseFool 5y ago

MattGaiser 5y ago
When fuel is so cheap that the capital expenditure is not worth the cost of the new jet.
- BitwiseFool 5y ago
  True, and I'm no expert in planning but here's my thinking. Fuel can only get so cheap, but there's no limit to how expensive it can get. So while the capital expenditure will be high, the odds of fuel getting much more expensive down-the-line is almost certain, no?
  - MattGaiser 5y ago
    > the odds of fuel getting much more expensive down-the-line is almost certain, no? Not really. Jet fuel prices peaked in 2008, without adjusting for inflation. [0] So fuel consumption has been a lot less important over the past few years. It is also questionable whether carbon taxes will be placed on jet fuel in many cases. At least in Canada it tends to be exempt. [0] https://transportgeography.org/contents/chapter5/air-transport/jet-fuel-prices/ https://transportgeography.org/contents/chapter5/air-transpo...
  - FredPret 5y ago
    Correct, but there’s another cycle on top of this - resource production. More expensive fuel, more intensive oil exploration and refinement. Make oil expensive enough and Shell et al will find hydrocarbons offworld if need be.
- mikepurvis 5y ago
  I think the point is that eventually you have to buy a new one regardless, so regulations ensure that whenever that time comes, whatever you buy (if it's new anyway) hits some baseline of efficiency. This sort of thing is the logic behind CAFE [1] for automotive, anyway— it forces all the manufacturers to hit a certain baseline efficiency rather than relying on them to all just be slightly less bad than the other guy (or to ignore efficiency altogether and make up the difference in performance/features/marketing). [1]: https://en.wikipedia.org/wiki/Corporate_average_fuel_economy https://en.wikipedia.org/wiki/Corporate_average_fuel_economy
  - MattGaiser 5y ago
    The problem for Boeing is when the buying of new ones happens. If it is in 10 years, then they want to invest in this new plane. If everyone starts being like Delta and flying lots of old aircraft, then they want to wait for the new jets.
- frankfrankfrank 5y ago
  Also worth mentioning is that certain airframes can be updated with new more efficient engines.
hervature 5y ago
Why do people always forget economics when expecting businesses to behave morally? Very simple: if the new efficiency technology is 1000000000x more expensive than maintaining the current fleet.
- minikites 5y ago
  Are you saying corporations are acting immorally? I think we should impose more of society's morals onto corporations. If we are disgusted by selfish behavior in an individual, why are we not disgusted by a coordinated group of individuals showing the same behavior?
  - hervature 5y ago
    No, I believe corporations try to maximize lifelong profits. Whatever morality is projected upon them. Sometimes this coincides with “societal morals” like Disney not using their characters for pornographic content for brand reasons. Also the major shift to electric vehicles which, in my opinion, was spurred by economic feasibility by technological progress and not anyone behaving in the interest of the planet (as much as they will market otherwise). Obviously, some companies do bad things in the interest of profits but they tend to die fast. I don’t think selfishness is the right word here. Are you disgusted when you go to a restaurant and somebody orders food for themselves? I think you mean “when they act selfish at my expense” which is in itself a selfish sentiment.
    - minikites 5y ago
      >I believe corporations try to maximize lifelong profits So any means are justified to produce these profits? We do restrict corporations from doing truly terrible things, so we already project some morality onto corporations. I'm saying we need to do more of that.
      - hervature 5y ago
        Again, businesses are simply legal entities. The individuals running them are still subject to laws. You can't have a company of mercenaries going around killing people because murder is illegal. I mean, you can, but if all your employees go to jail, your company doesn't last very long. Other than anti-trust legislation, can you provide an example where corporations have more restrictions than citizens? Distilleries, arms making, banking, every regulated industry is an industry a private citizen can't partake in.
selectodude 5y ago
Delta Air Lines' entire business model is buying older jets for pennies, investing in their operations department to keep them flying for longer, and then hedging their fuel costs by buying long-dated options and operating their own refinery. It's worked for them.
- raverbashing 5y ago
  Yes, it's worked for them with all the caveats you mention. And their planes are not that old (I think they have focused on the 717) but are migrating to the A220 (previously C-Series). Also you can pick and choose which routes support each plane best. You don't need the latest flashy thing to have a good service, at the same time, planes that are too old have worse reliability (just ask AA about their cancellations).
- throwaway0a5e 5y ago
  Higher fuel costs and/or more efficient jet development don't do anything to that business model other than make planes go obsolete faster and make the older planes you buy for pennies younger in terms of actual years.
- mrosett 5y ago
  One small component of that is aggressively updating interiors. As a passenger I wouldn't have guessed that Delta's planes are on the older side.
  - selectodude 5y ago
    Delta Tech Ops is, for my money, the best in the world at what they do.
- dragonwriter 5y ago
  > Delta Air Lines' entire business model is [...] It's worked for them. In the last 20 years, they’ve gotten two government bailouts and gone bankrupt in between, so “worked” must be being used very loosely when referring to any but the shortest-term business tactic besides maintaining (with the rest of the industry) political pull in Washington.
bombcar 5y ago
If you're buying a jet obviously the more fuel-efficient one has an advantage, assuming everything else is the same. The killer for airlines is that the older ones often have a lot of capital tied up in the planes and they basically have to keep them flying, whereas a new airline can get the latest and the greatest for effectively the same capital expenditure. Fuel prices changing rapidly could affect the equation.
minikites 5y ago
Because some people believe that the only reason to create a better world would be if you can get a return on your investment. This is why society should push back in the form of legislation and regulation.
- henvic 5y ago
  Look up regulatory capture. This is what happens when you try to do that.
  - minikites 5y ago
    So we should give up and hope companies regulate themselves? What is your solution?
    - henvic 5y ago
      I don't need to have a solution for everything, right? And the answer to your question: there are many private regulations entities for different businesses. If you expect regulation to come from the state, and for stuff such as efficiency, what you're going to get is worse efficiency and higher costs for everything because of regulatory capture. Big players will draft laws to make sure they own the whole market. This happens in any sector you put these perverse incentives. From telecom to health to education to whatever else.
LightG 5y ago
When you're a government-elected Republican. * batons down the hatches * ... truth be told.
jasode 5y ago
>When is a more fuel-efficient jet not a good idea? There are 2 different business perspectives to forecast: (1) The manufacturers' perspective -- the article says Boeing estimates $15 billion to develop a brand new clean sheet airplane that's maybe 10% more fuel efficient. The business risk is that they won't get +$15 billion in new airplane orders to get a positive ROI. (This is not hypothetical when you consider that the Airbus A380 is more fuel efficient than Boeing 747 at max passenger configuration[1] but they didn't get enough new orders to recoup development costs. Therefore, the A380 is considered a financial failure.) (2) The buyers' perspective -- some airline operators won't see 10% as enough of a savings to buy a new $250 million airplane. Consider that airplane buyers such as Delta Airlines, FedEx, and UPS deliberately buy older less-fuel-efficient airplanes. The savings on buying/leasing the old planes outweigh the projected fuel savings costs. It's not that strange that a new fuel-efficient airplane is not a slam dunk in business terms. I have a 100 watt incandescent lightbulb in the attic but I'm not going to spend $8 for a brand new efficient LED light that takes 20w because I'm hardly ever in the attic. Even at 1/5th the energy usage, I would take me 20 years to make back $8 in energy savings. [1] https://www.quora.com/Is-the-A380-or-the-B747-8-more-fuel-efficient https://www.quora.com/Is-the-A380-or-the-B747-8-more-fuel-ef...
- notahacker 5y ago
  Other relevant context: - evolutionary design approaches already result in aircraft ~1% more efficient every year, with much of the R&D offloaded to the engine OEMs - clean sheet designs have to save enough in fuel vs evolutionary ones to offset the additional operational costs of operating a brand new aircraft type as opposed to a variant model. Airlines like having lots of the same kind of aircraft (and nobody has the production capacity to replace an entire fleet at once) - clean sheet designs are much more likely to have significant delays, groundings and safety concerns. For an airline, this diminishes the value of the planned-to-be-more-efficient aircraft. For the OEM, it's a massive reputational risk, and if you screw up the clean sheet design badly enough your competitor captures the entire narrowbody market. Boeing lost enormous market share for a patchable software bug in a direct descendent of the most successful aircraft ever; now imagine a "clean slate" which doesn't deliver on its fuel economy promises and has unforeseen issues with the long term structural stability of its wings vs Airbus cheaply updating its established design - if the project is wildly successful, it's not all good news: you've wrecked the expected commercial lifespan and residual values of existing aircraft models, which doesn't please your customers or your aircraft leasing subsidiary. Also, your competitor learns from your successes and your failures when launching their "clean sheet" aircraft which has lower research costs, a shorter time to market and is more mature when it does launch
deleted 5y ago
[deleted]
linuxftw 5y ago
When it compromises longevity and reliability of an engine and adds increased maintenance costs and complexity.
Gravityloss 5y ago
When fuel is cheap

When is a more fuel-efficient jet not a good idea?

MattGaiser 5y ago

When fuel is so cheap that the capital expenditure is not worth the cost of the new jet.

BitwiseFool 5y ago
True, and I'm no expert in planning but here's my thinking. Fuel can only get so cheap, but there's no limit to how expensive it can get. So while the capital expenditure will be high, the odds of fuel getting much more expensive down-the-line is almost certain, no?
- MattGaiser 5y ago
  > the odds of fuel getting much more expensive down-the-line is almost certain, no? Not really. Jet fuel prices peaked in 2008, without adjusting for inflation. [0] So fuel consumption has been a lot less important over the past few years. It is also questionable whether carbon taxes will be placed on jet fuel in many cases. At least in Canada it tends to be exempt. [0] https://transportgeography.org/contents/chapter5/air-transport/jet-fuel-prices/ https://transportgeography.org/contents/chapter5/air-transpo...
- FredPret 5y ago
  Correct, but there’s another cycle on top of this - resource production. More expensive fuel, more intensive oil exploration and refinement. Make oil expensive enough and Shell et al will find hydrocarbons offworld if need be.
mikepurvis 5y ago
I think the point is that eventually you have to buy a new one regardless, so regulations ensure that whenever that time comes, whatever you buy (if it's new anyway) hits some baseline of efficiency. This sort of thing is the logic behind CAFE [1] for automotive, anyway— it forces all the manufacturers to hit a certain baseline efficiency rather than relying on them to all just be slightly less bad than the other guy (or to ignore efficiency altogether and make up the difference in performance/features/marketing). [1]: https://en.wikipedia.org/wiki/Corporate_average_fuel_economy https://en.wikipedia.org/wiki/Corporate_average_fuel_economy
- MattGaiser 5y ago
  The problem for Boeing is when the buying of new ones happens. If it is in 10 years, then they want to invest in this new plane. If everyone starts being like Delta and flying lots of old aircraft, then they want to wait for the new jets.
frankfrankfrank 5y ago
Also worth mentioning is that certain airframes can be updated with new more efficient engines.

hervature 5y ago

Why do people always forget economics when expecting businesses to behave morally? Very simple: if the new efficiency technology is 1000000000x more expensive than maintaining the current fleet.

minikites 5y ago
Are you saying corporations are acting immorally? I think we should impose more of society's morals onto corporations. If we are disgusted by selfish behavior in an individual, why are we not disgusted by a coordinated group of individuals showing the same behavior?
- hervature 5y ago
  No, I believe corporations try to maximize lifelong profits. Whatever morality is projected upon them. Sometimes this coincides with “societal morals” like Disney not using their characters for pornographic content for brand reasons. Also the major shift to electric vehicles which, in my opinion, was spurred by economic feasibility by technological progress and not anyone behaving in the interest of the planet (as much as they will market otherwise). Obviously, some companies do bad things in the interest of profits but they tend to die fast. I don’t think selfishness is the right word here. Are you disgusted when you go to a restaurant and somebody orders food for themselves? I think you mean “when they act selfish at my expense” which is in itself a selfish sentiment.
  - minikites 5y ago
    >I believe corporations try to maximize lifelong profits So any means are justified to produce these profits? We do restrict corporations from doing truly terrible things, so we already project some morality onto corporations. I'm saying we need to do more of that.
    - hervature 5y ago
      Again, businesses are simply legal entities. The individuals running them are still subject to laws. You can't have a company of mercenaries going around killing people because murder is illegal. I mean, you can, but if all your employees go to jail, your company doesn't last very long. Other than anti-trust legislation, can you provide an example where corporations have more restrictions than citizens? Distilleries, arms making, banking, every regulated industry is an industry a private citizen can't partake in.

selectodude 5y ago

Delta Air Lines' entire business model is buying older jets for pennies, investing in their operations department to keep them flying for longer, and then hedging their fuel costs by buying long-dated options and operating their own refinery. It's worked for them.

raverbashing 5y ago
Yes, it's worked for them with all the caveats you mention. And their planes are not that old (I think they have focused on the 717) but are migrating to the A220 (previously C-Series). Also you can pick and choose which routes support each plane best. You don't need the latest flashy thing to have a good service, at the same time, planes that are too old have worse reliability (just ask AA about their cancellations).
throwaway0a5e 5y ago
Higher fuel costs and/or more efficient jet development don't do anything to that business model other than make planes go obsolete faster and make the older planes you buy for pennies younger in terms of actual years.
mrosett 5y ago
One small component of that is aggressively updating interiors. As a passenger I wouldn't have guessed that Delta's planes are on the older side.
- selectodude 5y ago
  Delta Tech Ops is, for my money, the best in the world at what they do.
dragonwriter 5y ago
> Delta Air Lines' entire business model is [...] It's worked for them. In the last 20 years, they’ve gotten two government bailouts and gone bankrupt in between, so “worked” must be being used very loosely when referring to any but the shortest-term business tactic besides maintaining (with the rest of the industry) political pull in Washington.

bombcar 5y ago

If you're buying a jet obviously the more fuel-efficient one has an advantage, assuming everything else is the same. The killer for airlines is that the older ones often have a lot of capital tied up in the planes and they basically have to keep them flying, whereas a new airline can get the latest and the greatest for effectively the same capital expenditure. Fuel prices changing rapidly could affect the equation.

minikites 5y ago

Because some people believe that the only reason to create a better world would be if you can get a return on your investment. This is why society should push back in the form of legislation and regulation.

henvic 5y ago
Look up regulatory capture. This is what happens when you try to do that.
- minikites 5y ago
  So we should give up and hope companies regulate themselves? What is your solution?
  - henvic 5y ago
    I don't need to have a solution for everything, right? And the answer to your question: there are many private regulations entities for different businesses. If you expect regulation to come from the state, and for stuff such as efficiency, what you're going to get is worse efficiency and higher costs for everything because of regulatory capture. Big players will draft laws to make sure they own the whole market. This happens in any sector you put these perverse incentives. From telecom to health to education to whatever else.

LightG 5y ago

When you're a government-elected Republican. * batons down the hatches * ... truth be told.

jasode 5y ago

>When is a more fuel-efficient jet not a good idea? There are 2 different business perspectives to forecast: (1) The manufacturers' perspective -- the article says Boeing estimates $15 billion to develop a brand new clean sheet airplane that's maybe 10% more fuel efficient. The business risk is that they won't get +$15 billion in new airplane orders to get a positive ROI. (This is not hypothetical when you consider that the Airbus A380 is more fuel efficient than Boeing 747 at max passenger configuration[1] but they didn't get enough new orders to recoup development costs. Therefore, the A380 is considered a financial failure.) (2) The buyers' perspective -- some airline operators won't see 10% as enough of a savings to buy a new $250 million airplane. Consider that airplane buyers such as Delta Airlines, FedEx, and UPS deliberately buy older less-fuel-efficient airplanes. The savings on buying/leasing the old planes outweigh the projected fuel savings costs. It's not that strange that a new fuel-efficient airplane is not a slam dunk in business terms. I have a 100 watt incandescent lightbulb in the attic but I'm not going to spend $8 for a brand new efficient LED light that takes 20w because I'm hardly ever in the attic. Even at 1/5th the energy usage, I would take me 20 years to make back $8 in energy savings. [1] https://www.quora.com/Is-the-A380-or-the-B747-8-more-fuel-efficient https://www.quora.com/Is-the-A380-or-the-B747-8-more-fuel-ef...

notahacker 5y ago
Other relevant context: - evolutionary design approaches already result in aircraft ~1% more efficient every year, with much of the R&D offloaded to the engine OEMs - clean sheet designs have to save enough in fuel vs evolutionary ones to offset the additional operational costs of operating a brand new aircraft type as opposed to a variant model. Airlines like having lots of the same kind of aircraft (and nobody has the production capacity to replace an entire fleet at once) - clean sheet designs are much more likely to have significant delays, groundings and safety concerns. For an airline, this diminishes the value of the planned-to-be-more-efficient aircraft. For the OEM, it's a massive reputational risk, and if you screw up the clean sheet design badly enough your competitor captures the entire narrowbody market. Boeing lost enormous market share for a patchable software bug in a direct descendent of the most successful aircraft ever; now imagine a "clean slate" which doesn't deliver on its fuel economy promises and has unforeseen issues with the long term structural stability of its wings vs Airbus cheaply updating its established design - if the project is wildly successful, it's not all good news: you've wrecked the expected commercial lifespan and residual values of existing aircraft models, which doesn't please your customers or your aircraft leasing subsidiary. Also, your competitor learns from your successes and your failures when launching their "clean sheet" aircraft which has lower research costs, a shorter time to market and is more mature when it does launch

deleted 5y ago

[deleted]

linuxftw 5y ago

When it compromises longevity and reliability of an engine and adds increased maintenance costs and complexity.

Gravityloss 5y ago

When fuel is cheap