PIA converts 5 B777 orders to 8 B787

[cloud4000]

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

Really? Nobody will notice that $500 million is missing? If so, what about the other billions Pakistan government spends? Yes, there is corruption and inefficiency in Pakistan, but I find it hard to believe a standing PM and his cronies would simply take $500 million right from under everyone's noses.

Don't know why PIA should stick to buying new 777-300ERs when buying used ones will be cheaper. And I still don't understand why PIA wet-leased 4 A-330s, when they could have bought used 777s and refurbished them for their Premier service.

 

[The Diplomat]

Really? Nobody will notice that $500 million is missing? If so, what about the other billions Pakistan government spends? Yes, there is corruption and inefficiency in Pakistan, but I find it hard to believe a standing PM and his cronies would simply take $500 million right from under everyone's noses.

Don't know why PIA should stick to buying new 777-300ERs when buying used ones will be cheaper. And I still don't understand why PIA wet-leased 4 A-330s, when they could have bought used 777s and refurbished them for their Premier service.

Very true, we should of baught B777s' used for premium service. And why is it called "premium service", that should be the normal service standard...

 

[Furqan Sarwar]

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

Dear Lets watch and see. I will make a query within PIA to learn more about this development.

 

[somebozo]

Most of PIA flights are short haul frequent flights to gulf countries an as such 787 looks more beneficial on these routes...

 

[The Diplomat]

Dear Lets watch and see. I will make a query within PIA to learn more about this development.

Okay, thanks brother.

 

[pzfz]

ad-hocism and paindu-pan is a staple of this government. Anyone with an inkling of insight into branding knows that you don't dilute your brand (even if terrible) by spinning off a side-show (premier service). It costs more - leased planes, mithai box livery etc - , and only stains the new spin-off with the image of the old brand. Cheaper would be to start another airline. Even cheaper would be to upgrade standards throughout what is currently already there - PIA. This premier crap just says to the customers not flying to LHR that they are not worth it.

as far as the fleet goes, PIA should never have gone for the 777. It was useful to fly non-stop to the USA but that's not even allowed by the FAA. However this decision of converting the B77W is sensible because PIA was never going to fill the plane to its full capacity. B789 allows for cheaper operations with better load factor, and a more comfortable passenger experience. It should look into selling the B77W.

There are two issues with the B789 in PIA: composites, and whether or not it can comfortably serve YYZ and JFK with a full payload (fuel, passengers, and cargo) non-stop. Realistic range is much less than the advertised range. Plus the hot and high take-offs in ISB, KHI, and LHE. That would depend on the a/c configuration, MTOW, and which tonnage version PK gets.

 

[AZADPAKISTAN2009]

A large plane can always be adjusted , its seating can be made more comfortable and readjusted. For a more roomy and excellent flight experience

• 777-300 ER is certainly an ideal platform as we can even readjust these during Hajj/Umra season on Middle east route for heavy load 400 Passenger 1 way , 800 passengers 2 way is a big capacity

Dreamliner has the fuel capacity advantage but when you look a the profit ratios , the 777-300 ER gives you more profits

• Not to mention: Airlines also charge $50-$100 for extra luggage , from passengers those potential profit scenarios are extra for the 777-300ER

PS there is no mention in letter about changing 5 - 777 planes to 8 - 787 planes.

The letter just states to change 5- 7 77 planes to 5 - 787. Missing explaination of 500 Million difference or higher number of 787 planes


With that stated Dreamliner itself is a quite decent platform

So it would be interested to see what kind of service would come with Dreamliner (only good deal if we are getting 8 planes)

If we are indeed getting 8 Units of 787 , I agree it would be better from fuel capacity saving (if PIA fees they can't fill plane with 400 passengers) the 8 planes would be flexible in where they operate

Pakistan Zindabad!

8 Planes , very flexible decision, 5 plane for 5 swap would have been not great idea

 

[janu.bravo]

A large plane can always be adjusted , its seating can be made more comfortable and readjusted. For a more roomy and excellent flight experience

• 777-300 ER is certainly an ideal platform as we can even readjust these during Hajj/Umra season on Middle east route for heavy load 400 Passenger 1 way , 800 passengers 2 way is a big capacity

Dreamliner has the fuel capacity advantage but when you look a the profit ratios , the 777-300 ER gives you more profits

• Not to mention: Airlines also charge $50-$100 for extra luggage , from passengers those potential profit scenarios are extra for the 777-300ER

PS there is no mention in letter about changing 5 - 777 planes to 8 - 787 planes.

The letter just states to change 5- 7 77 planes to 5 - 787. Missing explaination of 500 Million difference or higher number of 787 planes


With that stated Dreamliner itself is a quite decent platform

So it would be interested to see what kind of service would come with Dreamliner (only good deal if we are getting 8 planes)

If we are indeed getting 8 Units of 787 , I agree it would be better from fuel capacity saving (if PIA fees they can't fill plane with 400 passengers) the 8 planes would be flexible in where they operate

Pakistan Zindabad!

8 Planes , very flexible decision, 5 plane for 5 swap would have been not great idea

In letter thy didn't said that thy will swap order like 5- 777 with 5 -787 nor they wrote they will provide you 8 787 in same amount, there must be some benefit for Boeing as they want to close old 777 production line for latest planes plus they need more customers for 787. for that reason Boeing could offer 8- 787-9. its a very wise decision to get 787 as majority of our 777 flights to US and Europe are not fully loaded in terms of passengers, and fuel consumption of 787 is far better thn 777 and other planes and that will make a big diff for sure.

 

[Super Falcon]

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

Thank you for detailed sheet

 

[denel]

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

Friend, please use kilometers in calculations. None outside US, Burma, or Liberia uses miles. i have no concept of it either.

 

[AZADPAKISTAN2009]

Well if you are getting 8 Dreamliner for 5 ER , its a very sound deal , as planes can be readjusted to different routes as well. 8 is like a solid figure

Five for five would have been , less profitable with cash back involved

Five for Eight = Nice deal as you get fuel efficiency too for 8 planes

 

[Super Falcon]

Boeing 787 is a wise decision
In future PIA should order Boeing 777 X Model and few AIRBUS A 350 will bring world of good for PIA hope passengers give respect to national aircraft carrier

 

[MadDog]

Really? Nobody will notice that $500 million is missing? If so, what about the other billions Pakistan government spends? Yes, there is corruption and inefficiency in Pakistan, but I find it hard to believe a standing PM and his cronies would simply take $500 million right from under everyone's noses.

Don't know why PIA should stick to buying new 777-300ERs when buying used ones will be cheaper. And I still don't understand why PIA wet-leased 4 A-330s, when they could have bought used 777s and refurbished them for their Premier service.

PIA got 777's in 2007, they were brand new at the time. The A-330's for Premiere Service are for a particular route. More long haul planes are presently required

 

[Imran Khan]

but we were going to get 777x man

 

[janu.bravo]

PIA got 777's in 2007, they were brand new at the time. The A-330's for Premiere Service are for a particular route. More long haul planes are presently required

after 8-787 we don't need more long haul planes, as we got 11-777 other thn 787 and a-330. we need more a-320 or a-321. we don't have that much long haul rotes as we already sold many routes to diff airlines.