V-Flyer

By 2021/22, VS should have received all 12 A35K, retired 8x B744, 4x A332 should come off lease, and 7x A346 should be retired.

The fleet evolution to 2022 is set out below, and some thoughts on what may happen next are also set out. Any thoughts?

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As things stand (according to the 2018 annual report) VS operate (assuming all B789 are serviceable which is questionable) a fleet of 46 aircraft broken down as:

17x B789
10x A333
4x A332
7x A346
8x B744

(Total 46)

It is expected that by 2019 4x A35K will enter the fleet and 4x A346 will retire, so the make up would be.

4x A35K
17x B789
10x A333
4x A332
3x A346
8x B744

(Total 46)

I assume that the next three A35Ks will replace the last three A346 on a 1 in 1 out basis, leaving the following fleet:

7x A35K
17x B789
10x A333
4x A332
8x B744

(Total 46)

At this point, VS would be awaiting delivery of 5x A35K. By this point I assume that additional capacity would be provided by improved serviceability of the B789 fleet, but I have no detailed information on this.

If each of these A35K were delivered, and no like for like retirements, the fleet would expand to 51, as follows:

12x A35K
17x B789
10x A333
4x A332
8x B744

(Total 51)

However, it is unlikely that there will be no retirements - VS has already stated that the B744 would be retired in 2021, and the 4x A332 are on leases due to expire in 2022/23 (they could be extended but they are over 30 years old (IIRC) and are not a long term solution).

Assuming no new/replacement aircraft are sourced, and retirements / fleet removals take place as planned, by 2023 the fleet could look like this:

12x A35K
17x B789
10x A333

(Total 39).

In this scenario, VS have a streamlined fleet of 39 aircraft, which is 5 fewer than they have now and are planning to have in the coming years.

I assume that in light of VS’s growth aspirations there is likely to be another order forthcoming in the next year or two in order to keep the number of aircraft in the long haul fleet at at least 46 (likely higher) in the long run. In the short run, things like delayed retirement of the B744 and/or extending the lease on the A332 may be options. Any long term solution need not be an order for a new aircraft.

As I see it the options (discounting second hand aircraft - I don’t know enough about the market to make any informed decision) are:

1 - A larger order of A330 NEO, to replace the B744, A332 and A333 (in the longer term). I think this is a possibility, perhaps as part of a larger DL order.

2 - Smaller top up orders of B789 and/or A35K. I think this is less likely, because that level of performance / capacity is not necessary over much of the network, and there is a need for an A330/B767 type performance.

3 - Would a new mid-market aircraft be of interest?

There are clear advantages to option 1, but I also see advantages of sourcing a decent fleet of used A330 aircraft which offer a relatively cheap way of opening up new markets (eg from MAN) - and that is clearly an attractive option to VS.

By the way it currently looks the fleet will be shrinking which is not what i'd expect in long term after Shai Weiss talked about new routes in Telegraph interview and expansion so I reckon we could probably see a new aircraft order on the horizon. I think the main issue is finding a suitable replacement for the 744 as they have a large market share on BGI and MCO routes which would seem stupid to loose. Possibly the 777x? because i don't think the A350-1000 is a suitable replacement so if they do order a new aircraft the additional a350s (from the a340s they'd be replacing) could be where the expansion is coming from. As for A330s, not sure if they'd be thinking of an A333 replacement just yet and i could see them extending A332 lease as they've seem to make it work perfectly for MAN expansion. Did they have any options for the 787 when they ordered them or not? If so be curious if they utilise them.

jakedonson wrote:By the way it currently looks the fleet will be shrinking which is not what i'd expect in long term after Shai Weiss talked about new routes in Telegraph interview and expansion so I reckon we could probably see a new aircraft order on the horizon. I think the main issue is finding a suitable replacement for the 744 as they have a large market share on BGI and MCO routes which would seem stupid to loose. Possibly the 777x? because i don't think the A350-1000 is a suitable replacement so if they do order a new aircraft the additional a350s (from the a340s they'd be replacing) could be where the expansion is coming from. As for A330s, not sure if they'd be thinking of an A333 replacement just yet and i could see them extending A332 lease as they've seem to make it work perfectly for MAN expansion. Did they have any options for the 787 when they ordered them or not? If so be curious if they utilise them.

The phase "supporting expansion at MAN" sums up the A330-200's better given they're not exclusively used out of MAN at the present time.

Leases can always be extended on the A330's, but although the A330neo would be a reasonable choice to replace them my instinct thinks they will ultimately be replaced by more 787's to create a two-type fleet. There were some options when the order was first placed, but I'm not sure how many there were and whether they're still valid.