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Asia customers like range but flexibility crucial: Boeing

Boeing is not seeing its Asia-Pacific customers focus more on sheer aircraft range, despite recent moves to establish long-haul routes.

Speaking with Flightglobal recently, Dinesh Keskar, senior vice-president of sales in Asia Pacific and India, says absolute range has not moved up aircraft buyers’ priority list.

“Airlines realise that you don't optimise the aircraft for one range, and make the aircraft sub-optimal for 95% of routes,” says Keskar.

“They don't push you on range, but they want to know what you can do. For a 777-9, we say it will do every route they're doing with the 777-300ER, and they're fine. But, they will ask what additional city pairs can be opened if the range goes up by 100 to 500 miles.”

In the last six months, long-range services have enjoyed a renaissance among carriers serving the Asia-Pacifc. In October, Singapore Airlines shuffled its A350-900 orderbook, resulting in plans to obtain seven aircraft configured in a special -900ULR version. Equipped with long-range fuel tanks, the type will allow SIA to restart its direct New York and West Coast flights.

In January, United Airlines said it will launch a non-stop San Francisco-Singapore service using 787-9 aircraft in July 2016.

Keskar says SIA was also looking at the 777-8 for its long range requirement, but did not want to wait until after the type’s service entry after 2020.

He also touched on Indian requirements for widebodies. He said there is potential demand among some newer players in the Indian market to eventually add widebodies, but that the notorious 5/20 rule means airline bosses prefer to take a wait and see approach for now.

Under the 5/20 rule, an airline must fly for five years and have 20 aircraft before operating internationally. Vistara, a full-service joint venture between SIA and Tata & Sons, is often viewed as a potential widebody operator.

Since it only launched in early 2015, under the present regulatory regime it must wait until after 2020 to operate international services. The carrier operates nine Airbus A320 aircraft, with 11 on order.

As for the outlook for the 787-10 in the Asia-Pacific, Keskar feels the greatest opportunities for the largest 787 family member are concentrated in Southeast Asia.

SIA has orders for 30 of the type, but Keskar says Boeing has received interests from airlines such as Garuda Indonesia, Malaysia Airlines, Thai Airways, and Vietnam Airlines. Of these, Vietnam Airlines signed a memorandum of understanding in mid-2015 to evaluate and possibly order eight 787-10s and eight 777-8s.

Keskar notes that although the 787-10 can be called on to operate Singapore-London, it offers “great economics” on shorter routes such as Mumbai-Singapore.

“Air India is doing [Mumbai-Singapore] with a 787-8 now, and they 're happy. If they’re happy with a -8, I don't know what you'll do with the joy of -10 in the same market, when seat mile costs are down 10-15%.”

Flightglobal also asked Keskar what airline chief executives are most worried about.

“You hear the word overcapacity a lot,” he says. “The second concern you hear is about how ASEAN [Open Skies] is not really working,” he says. “Those are the two things I hear the most.”

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