PIA converts 5 B777 orders to 8 B787

[The Diplomat]

PIA has converted its remaining 5 Boeing 777 orders to Boeing 787-9. The 787 offers less seats but is more cost effective in running, the aircraft uses less fuel compared to the 777.

Link: https://www.facebook.com/pia7860/ph...889955891027/1395140170499332/?type=3&theater

https://arynews.tv/en/pia-to-purchase-eight-new-boeing-787-planes/

http://www.air-cosmos.com/pakistan-airlines-commande-huit-boeing-787-82109

 

[AZADPAKISTAN2009]

Based on the # of seats , alone 777-300 (Extended Range) Seems like a good option
787 perhaps should be ordered seperately on the side

• potential 400 seats vs 250-300 seats is big difference

Round Trip with 777-300 ER , PIA can serve 800 Passengers
Round Trip with 787 , PIA will serve only 500 Passengers

A full reduction of "200-300" Passengers

Extra Revenue From 777-300 ER having extra 300 seats
$750 (Ticket) x 300 (Number of Passengers) x 2 way x 52

• 23 Million Extra profit

Now if the plane makes 2 flights per week , then extra profit is 46 Million per year with 777-300 ER


Note: I did not calculate revenue from All Seats only the extra capacity in 777-300er
So I think PIA made the correct choice



Full Seat Potential:

787 = 500 seats x $750 (tickets) x 2 Way x 52 (flights per yea) = 39 Million USD

777-300 ER= 800 Seats x $750 (tickets) x 2 Way x 52 flights per year) = 62.4 Million USD


Of course you have to reduce the cost of Fuel for both planes


787 = 27.35 (Cost per mile), actual figure
777 = 38.99 (Cost per mile), actual figure


Route : Karachi - New York (1 Round Trip)
One Way : 7255 Miles
Two way : 14510 Miles


Karachi - New York (52 Trips , i.e 1 Trip per week)
7,54,520 Miles

Cost of Annual Fuel : (1 Route, weekly, round trip)
787 = $20, 651, 212 USD
777-300ER = $29,418, 734 USD



Savings Claim Myth vs Reality:

Using actual fuel / mile burn

787 : $39,000,000 USD- $20,651,212 USD = (+ 18.3 Million Profit)
777 : $ 64,400,000 USD - $29,418,734 USD = (+ 34.98 Million Profit)


Saving from 777-300ER > 787 , almost double profits

After full 1 year of Operation , if we imagine 5 Planes each platform after deducting the cost of fuel.

• 787 makes PIA , about 91 Million Profit
• 777-300ER can earn PIA $159 Million Profit

Conclusion :

• 5, 777 ER will make PIA 67 Million more then 5, 787 Dreamliner with condition that flights are booked to full capacity

• About 6 Billion PKR saving from Operations (Extra profit)

With Actual Profit being (BASE + Extra seat) 159 Million Profit , About 12 Billion PKR


From this 159 Million Dollar

• 1 Year salary is due for crew (Pilot & Cabin crew) may be 30-40 workers
• Cost of Food for 52 Trips (Normally not more then few millions)
• Minimum maintenance for brand new planes for 5 years

• 777-300ER is a very effective option for PIA

 

[Furqan Sarwar]

PIA has converted its remaining 5 Boeing 777 orders to Boeing 787-9. The 787 offers less seats but is more cost effective in running, the aircraft uses less fuel compared to the 777.

Link: https://www.facebook.com/pia7860/ph...889955891027/1395140170499332/?type=3&theater

Bro its not converted, the letter clearly says its a proposal.

 

[The Diplomat]

Bro its not converted, the letter clearly says its a proposal.

The proposal was later accepted, see the attached link.

 

[Furqan Sarwar]

The proposal was later accepted, see the attached link.

Bro the link is for Facebook and i should tell you that PM don't accepts proposals like that.

 

[muhammadali233]

I was the first to break this news,my sources are legit af.

 

[The Diplomat]

I was the first to break this news,my sources are legit af.
View attachment 332216

Sorry about that, I didn't see your post. Can you post your link please.

 

[muhammadali233]

Sorry about that, I didn't see your post. Can you post your link please.

sorry for what?
I didn't bothered to make a new thread
anyways the link post#19 https://defence.pk/threads/pia-carr...-c-on-airbus-a-320.446556/page-2#post-8659279

 

[war&peace]

Based on the # of seats , alone 777-300 (Extended Range) Seems like a good option
787 perhaps should be ordered seperately on the side

• potential 400 seats vs 250-300 seats is big difference

Round Trip with 777-300 ER , PIA can serve 800 Passengers
Round Trip with 787 , PIA will serve only 500 Passengers

A full reduction of "200-300" Passengers

Extra Revenue From 777-300 ER
$1500 (Ticket) x 300 (Number of Passengers)

• Extra Revenue from extra seats: $450,000 per Trip (Round Trip)

So over year lets imagine 1 route between USA -Pakistan, 1 flight flies weekly round trip
So in 52 Weeks PIA should make 23.4 Million Profit/Year (with 777-300ER)

Comparatively with 787 , we will not make that 24 Million per year profit on same route


Now if the plane makes 2 flights per week , then extra profit is 46 Million per year with 777-300 ER

Note: I did not calculate revenue from All Seats only the extra capacity in 777-300er

So I think PIA made the correct choice

Where is A-380 on this chart? Does it go out of the paper / chart i.e. an outlier?

 

[AZADPAKISTAN2009]

Plus it is not clear if Pakistan has already paid the money

• Converting from 777 to 787 would mean return of 500 Million dollar back to Pakistan 1 time as each plane is about 100 million cheaper. So people should be aware of any potential "readjustment money" where it is going ?

• If this deal is being negotiated by Mr Nawaz sharif instead of PIA head of company there should be good explanation of the recovery process for cash

• Obviously money laundering would be an issue if their is no Trail of money recovered from the switch about 500 Million Dollars. As it is not peanuts. In past PIA has generally ate any money returned or the funds just Vanish ! Obviously now with his excellency involved (Nawaz) close watch has to be maintained on this rumored deal

Obviously , since PIA is a National Corporation , it is not property of Head of state
so normally any change in order would be reviewed by NAB or Military if it proceeds

The conversion deal is not ideal , and if it does happens (as we know stuff happens in Pakistan) then about 500 Million cash flow would be floating around in god knows whose hands. Who knows this difference would be transferred to Bablu's account offshore

Pretty sure there won't be any trail of 500 Million if these are returned back the $$ would vanish into offshore accounts

Ideally PIA should reject the offer to convert

 

[Furqan Sarwar]

We will know for sure once the proposal is signed.

 

[The Diplomat]

We will know for sure once the proposal is signed.

I think it already has been signed.
Even the PIA wiki page is saying 8 on order (I know people can edit it).
https://en.wikipedia.org/wiki/Pakistan_International_Airlines#Fleet

 

[cloud4000]

Where is A-380 on this chart? Does it go out of the paper / chart i.e. an outlier?

Airbus A-380 is an outlier because it's seating capacity is well north of 400 people.

 

[AZADPAKISTAN2009]

Well the letter is just a mere proposal , we have not received confirmation of change, many questions remains

Gov Pakistan vs Boeing

• Will Boeing return 500 Million due to switch based on the price when order was signed?
• 777-300ER is more expensive better capacity plane vs 787 Dreamliner
• Is the proposal to change 1 vs 1 , plane for plane with no money difference returned to Pakistan?
  
• How would the change effect delivery of planes to Pakistan?
• How /when the funds would be returned ?
  
• Are the funds going to oversea PIA branch or the funds will be returned to Pakistan directly for difference in cost of two types of planes

From PIA operation Side:

• 777-300ER max profit is around 159 Million (1 route I quoted above) , while Dream-liner just makes you mere 91 Million. Substantial difference in profits

• 787 is newer plane but lower capacity and lower profit even with fuel economy in consideration

Dreamliner is welcomed in PIA but it would make sense for it to be purchased separately from the Boeing 777-300ER past contract

• 2 Units for Middle east route would be ideal for Dreamliner but as a separate order
• Obviously while engineering base also gets updated for Dreamliner

• The letter does not takes about change order for 5 planes to 8 planes

 

[The Diplomat]

Well the letter is just a mere proposal , we have not received confirmation of change

The letter is old, it's from August when Boeing proposed. On the news today they said its been confirmed.