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Airlines Cut 747s From Asia-Pacific Networks

Boeing 747s face shrinking role on transpacific routes

A version of this article appears in the September 15 issue of Aviation Week & Space Technology.

The long reign of the Boeing 747-400 on intercontinental routes is coming to an end, and nowhere is this more apparent than on transpacific flights. While Delta Air Lines is culling 747s from its Asian routes as part of a network overhaul, other carriers around the Pacific Rim are phasing out the aircraft entirely.

The 747 is steadily being pushed out of long-haul passenger fleets in favor of newer, more fuel-efficient aircraft. The trend has been evident for years, but has recently been accelerating. At least three airlines—Cathay Pacific Airways, Philippine Airlines and Air New Zealand—have retired the last of their passenger 747s during the past few weeks.

Delta is planning to retire three of its 16 747s by the end of this month, with a fourth to be parked. The cuts allow it to “down-gauge” routes between North American and Asian cities to smaller widebodies such as Boeing 777s, and the move is also linked to a broader rethink of its Asian strategy.

“The 747 is a tough airplane [to operate], with its four engines and its large gauge,” Delta Chief Financial Officer Paul Jacobson told investors at a recent Cowen & Co. conference. The carrier gained the 747s after its merger with Northwest Airlines in 2009.

The introduction of smaller aircraft will allow Delta to reduce capacity on its Japanese network while still maintaining frequencies. Flights from Atlanta and Los Angeles to Tokyo Narita Airport will be downgauged from 747s to 777s around the end of September, and the same swap will occur on its New York John F. Kennedy International-Narita route in late October. Airbus A330s will also replace 747s on flights from Detroit to Nagoya toward the end of next month.

Delta’s strategy is to shift its Asian route network away from its dependence on “fifth-freedom” flights—the right of an international airline to pick up and deliver at intermediate points along a route—beyond its hub at Narita, which it inherited from Northwest. As part of this plan, Delta will cut back on flights from Narita to beach destinations in Asia by 17% and pare its intra-Asia schedule by 10%, Jacobson says.

The Narita fifth-freedom hub, once a prize fought over by U.S. carriers, has lost its luster recently as the Japanese economy has cooled, and as changes in aircraft technology make it possible to fly nonstop to most points in Asia directly from the U.S. However, the Tokyo catchment area remains one of the world’s largest—and most affluent—population centers, so its value as an origin and destination market remains undiminished.

Instead, Delta will build its network from its growing transpacific gateway at Seattle-Tacoma International Airport. “We will leverage the Seattle gateway, but with more efficient aircraft than the 747,” Jacobson says. Delta currently operates 10 daily widebody flights to Asia from Seattle. Using this airport allows the carrier to fly to more nonstop destinations in Asia with smaller aircraft, including the Boeing 767, than is possible from most other parts of the West Coast.

Many international airlines have already phased out the 747 from their passenger fleets, including the two major Japanese carriers. Japan Airlines retired its remaining 747 fleet in 2011 as part of its cost-cutting and restructuring effort, and All Nippon Airways phased out its last 747—used on domestic routes—in March.

Other carriers are following suit. Cathay Pacific operated the final flight of its sole remaining 747-400 on Aug. 31, on its San Francisco-Hong Kong route. All of the flights on the carrier’s seven North American routes are now operated by Boeing 777-300ERs. Cathay does have new 747-8 freighters in its cargo fleet.

Philippine Airlines (PAL) retired its last 747-400 on Sept. 1. The carrier had been using them for its flights to Los Angeles and San Francisco, and due to the FAA’s downgrade of Philippine’s safety rating it could not change aircraft type on these routes. The FAA restored the safety rating in April, enabling PAL to begin phasing out its 747s in May.

The carrier has replaced the 747s on these routes with 777-300ERs. It expects to save as much as $120 million a year in fuel and maintenance by using the 777s instead of 747s on its 18 weekly flights to the U.S.

Air New Zealand, meanwhile, flew its last 747 flight on Sept. 10, on its San Francisco-Auckland route. The carrier at one time had eight 747-400s, but had more recently reduced the fleet to two aircraft. The second-to-last 747 exited the fleet in July. Air New Zealand now flies 777-300ERs in its North American markets.

Some carriers will continue to use 747s on transpacific routes. While Qantas is accelerating retirement of its older 747s, it will still be using this model on flights to the U.S. “for the foreseeable future,” an airline spokesman says.

Qantas currently operates 13 747s, and has plans to phase out four by early 2016 as part of a broader cost-cutting program. The carrier says the remainder are “mid-life” aircraft that have been refurbished with the same cabin product as its Airbus A380 fleet. The older aircraft being retired are primarily serving Asian destinations.

Unlike its rival Delta, United Airlines does not plan to retire any of its 23 747s this year. However, it has been shuffling the aircraft around its network. The carrier primarily based the 747s in San Francisco for scheduling purposes while it worked on the aircraft to improve their maintenance reliability. After the conclusion of these efforts earlier this year, it deployed the 747s back onto routes such as Chicago to Shanghai, Tokyo and Frankfurt.

In a strategy similar to Delta’s, United executives say the airline is “restructuring our Asia flying to leverage our West Coast hubs,” meaning more direct flights from the West Coast to secondary Asian markets. It has recently introduced routes from San Francisco to Taipei and Chengdu, using 787s and 777-200s, respectively. 

TAGS: Asia Pacific
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