What 787 and A380 Delays Mean to Airlines

Once again, a new aircraft program has seen delays. The 787 has already been delayed a few times as has the A380. But now, the A380 production schedule has slipped again, and there will be even more of a wait for those shiny new aircraft. Is this a bad thing?

It depends who you ask, but most people would answer that yes, it's bad. Sure, these are expensive new planes, and with the declining economic situation here in the US, you would think that at least some airlines would be happy to not have to pay for them right now. Besides, they'll get themselves a break on the final price once they demand compensation. But the picture isn't that clear.

Often, these planes are planned as replacements for aircraft, some of which are coming off lease. So, if these planes do not arrive in time, the airline could be required to cancel flights until the new planes show up. Other airlines simply need a more profitable aircraft to make some routes work. The 787 may cost a fair amount of money, for example, but its operating costs are much lower than anything else out there. And on longer, thinner routes, it is the only way to make something work.

Case in point, take a look at LOT Polish Airlines. The airline announced today that it would cancel its Warsaw-Beijing route, because it can't operate it profitably until the 787 arrives. That was supposed to happen this year, but it's now been pushed to 2010. So, LOT will wait to expand further in Asia until 2010 when it starts to make sense again.

These delays can be quite problematic for planning departments all around the world, but there's really nothing that can be done. Of course, airlines can try to find short term capacity, but there aren't many spare widebodies hanging around to do some short term work. At least, not for a reasonable fee. So, as these delays continue to mount, airlines will have to make some tough route planning decisions.