ETOPs Open New Doors of Opportunity for Global Carriers of All Sizes

ETOPs Open New Doors of Opportunity for Global Carriers of All Sizes – Brief Article

Two seemingly unconnected incidents in the past four weeks have signified a change in the aviation industry that could revolutionize the way industry views air travel, according to Reston, Va.-based consultancy Avitas. The revolution is the development of extended twin-engine operations (ETOP).

On Feb. 28, Boeing [BA] announced it would proceed with the launch of its 777-200X, which will have the longest flight range of any commercial airliner (10,148 miles), surpassing the 9,765-mile range of the Airbus A340-500 scheduled to enter service in late 2002. Just two weeks earlier, Aloha Airlines initiated its first service to the mainland using a 737-700 on the 2,415 mile route between Honolulu and Oakland, Calif.

So, what is the connection between these two events? Well, here we are seeing ETOP operating levels being extended from two sides – ultra long-haul on one side and medium-haul on the other. And why is this so important? The result may be that ETOP will transform the industry – just as the rise of trans-Atlantic twins did in the 1980s and the proliferation of regional jets (RJs) did in the 1990s.

The Federal Aviation Administration’s conditional approval of 207-minute 777 ETOP operations will, in and of itself, open up the trans-Pacific market to a twin-engine alternative. But the addition of the 777-200X will make ultra long-range twin engined flights a reality. With the introduction of such a plane into this market, airlines such as Singapore Airlines or Malaysia Airlines will be able to reach New York non stop over or around the North Pole, shaving up to two hours from the current route time from Asia. The A340-500 will offer a substantially competitive product, but airlines will now have a choice of airframes and engines for ultra-long haul routes.

Although the implications of this are exciting, the most revolutionary change will be in medium-haul markets, where ETOP operations will open up an abundance of opportunities. Aloha, through its new mainland route, along with its 737-200 ETOP flights to the Marshal Islands, is exploiting ETOP capabilities to penetrate new markets. This is just the tip of the iceberg.

ETOP will transform the industry – much like the RJs did in five ways:

1. Hub bypass: High-density routes such as Singapore-New York will overfly Tokyo and other intermediate points, saving time and money, and opening new direct markets. On low-density routes, we could see a proliferation of second tier markets opening up. For example, Swiss World Airlines, prior to shutting down in 1998, had announced its intentions of operating ETOP 737-800s on a Basle-John F. Kennedy International Airport (JFK) route.

2. Widebody replacement: BWIA has ordered ETOPS 737-800s to replace its Lockheed Martin [LHM] L-1011-500s on its Port of Spain-JFK flights. For Air India, which for years has operated marginally into East Africa with its large ethnic Indian market using A310s, a 128-seat 737-700 ETOP would provide a moneymaking alternative.

3. Pioneering routes: An ETOP-configured 737 would be the ideally sized aircraft for Canada to London, where traffic generally cannot sustain widebody operations. And in less developed regions of the world, this is particularly relevant. SriLanka Airlines (formerly Air Lanka), for example, is trying to develop Colombo into a regional multi-directional hub – a 737 ETOP operations would enable the carrier to do so, opening up low-density routes across the Indian Ocean to the Middle East and East Africa to the west, and Indonesia and Australia to the East.

4. Hub build-up: Smaller jet ETOP operations can expand the coverage from a hub, as Aloha is doing in Honolulu. Small mainland markets, such as Anchorage, Portland, Ore., and Ontario offer attractive potential where widebody operations have failed to produce profitable results.

5. Frequency build-up: If United Airlines [UAL] can offer hourly Washington Dulles International Airport-Los Angeles using A320s/A319s, can hourly JFK-London Heathrow Airport (LHR) be far behind? Although this option is hypothetical (a lack of slots controls would deny United the ability), other airlines, such as British Airways [BA], could take advantage. BA especially would be an airline that could benefit from ETOP. Actively downsizing capacity in order to increase yields, it would not be beyond the realm of possibility to see BA change its current eight daily JFK-LHR services into an hourly 737-ETOP North Atlantic all business-class shuttle? For BA, with competition breathing down its neck and the threat of open skies looming, ETOP – more than door to door limousine service or fully reclining beds – could prove the ultimate strategic weapon in the fiercely competitive North Atlantic market.

COPYRIGHT 2000 Phillips Publishing International, Inc.

COPYRIGHT 2001 Gale Group