Jetrader - July/August 2009 - 13

According to Ozimek, the technology was offered on the Winglets provide signiﬁcant fuel burn savings to 767 twinjet following FAA certiﬁcation last year. “Previously the problem with carbon brakes was that they were expensive. Compared to steel, carbon offered 7% a lot of value from the standpoint of weight, some 700 pounds on a 737-700. But if you considered the number of 6% landings that you cold get from each, the heavier weight 5% steel brakes were less expensive. Now, carbon has gotten reasonably durable in terms of landing numbers, and its 4% costs have come way down. Now the equation comes out in Savings § 3% § favor of carbon brakes.” § The idea of pioneering technology advances on one 2% § § model line and retroﬁtting them to another is working to 1% the favor of the wide bodied ﬂeet as well. Winglets ﬁrst ﬁt0% ted to Boeing 737s and 757s are now being offered for the 0 1000 2000 3000 4000 5000 6000 company’s 767-300ER. In fact, American Airlines recently began revenue operation of its ﬁrst 767 equipped with winglets developed by Aviation Partners Boeing (APB), a joint retroﬁt, for example, it may come down to the marketing departventure between the airframe builder and the Seattle-based winment’s desire to offer an improved passenger experience. For glet provider. more tangible performance-based improvements, Ozimek says the The winglets – each one stretches some 11 feet – are the largest answers are in the numbers. structural components ever retroﬁtted to a commercial airplane wing, “For aerodynamic, weight or speciﬁc fuel-consumption and they radically change the 767’s appearance and performance. improvements, like those for engines, you’re able to calculate APB ofﬁcials say a high-utilization aircraft like the 767-300ER these in terms of dollars, and these deﬁnitely result in a residual is expected to achieve up to a six percent fuel savings (see chart) value improvement. Appraisers across the board tend to make a thanks to their patented blended winglet design. American estidistinction between, say a wingletted and non-wingletted 737 or mates this equates to about a half-million gallons of fuel for each 757, and those values are manifested in the valuation books.” winglet-equipped plane. On top of this, the airline expects to reduce Does an improved airplane automatically mean a ticket for its CO2 emissions ﬂeet wide up to 277,000 metric tons per year, higher lease rates? Conversely, does a non-improved one relwhile extending the range of each plane by as much as 360 nautical egate it to a lessor’s back row? Ozimek explained the current miles and providing some 12,000 pounds of additional payload. thinking of lessors like BCC. How does an airline decide when it makes sense to look to “Improvements don’t necessarily devalue airplanes without create value, including for the longer term, from retroﬁtting new them, but they do add more value to airplanes that have them. It improvements to older aircraft? In the case of a new interior doesn’t mean the improved plane will always be the choice of the “… in order for the product to remain viable in the marketplace, we’re lessor or operator. That depends on the lease rate. If the lessor going to have to do things to the current airplane to update it for decides to extract all the value for the improvement in the lease today’s market demands.” – Joe Ozimek, Boeing Capital’s managing rate, then both airplanes are real capital alternatives to each director of airplane programs and valuations. other. You have to be able to share that improvement with the end user, and the end user has to be able to see that value. A lot of times, a wingletted airplane will rent for more than one without them, and people are able to make the equation balance.” In the 737’s case, the improvement list also considers the cockpit where, among other advances, Boeing has led the way in integrating Required Navigation Performance (RNP) precision approach technology to keep the NG current with today’s airline operating environment. For the 767, the manufacturer is also offering an enhanced retroﬁttable interior that Ozimek says makes a “like-new airplane” impression on passengers. Regardless of whenever replacement products arrive, Ozimek said the need to create customer value requires the manufacturers keep its products effective. “You can’t afford to expect that the marketplace will stand still waiting for a new product in 10 or 12 years,” he added. “You have to keep it fresh.“ Thanks to Boeing for supplying editorial content for this article. Jetrader 13

Jetrader - July/August 2009

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