MIAMI — When someone buys a car, they must make a slew of decisions on what exactly they want. The type of car must match the buyers lifestyle, be it compact, mid-size, minivan, or SUV. Then they must decide what manufacturer they want to purchase from. Lastly, the new car must be affordable. For an airline, buying an airplane is a lot like buying a car, except the price tag is much higher, and their new investment must continue to meet their goals for decades.
At the Yale Club in New York City, Nico Buchholz, Executive Vice President Lufthansa Group Fleet Management, provided a small group of journalists some insight into the incredible process that goes into purchasing a new fleet of aircraft, and the expectations over the long haul. Buchholz played a key role in launching 2 major aircraft programs, the Boeing 747-8I Intercontinental and the new Bombardier CSeries. He was also the architect behind the recent massive Lufthansa A350 and 777X order. Picking out the proper aircraft for a group of airlines is no small task, and involves much more work than picking a trim level out of a pamphlet.
Planning the future fleet of an airline is something that occurs over the course of several years. “We need to give a certain commitment, because we need baseline planning,” said Buchholz. “Everybody needs their baseline planning, also the manufacturers because I cannot come in 2020 and say ‘oh, by the way guys, I need ten aircraft this year.’ It’s impossible because: A. I don’t get the seats from the vendors. B: Boeing or others have not been waiting at that point in time to actually have some spare capacity. So we need to look a long time ahead, and that’s the flexibility we’re building into our fleet plan.”
As it currently stands, from 2013 up through to 2025, the Lufthansa Group has standing orders for 295 aircraft with a value of 36 billion euros on top of their 700 existing aircraft. These aircraft range from the Bombardier C-Series, all the way up to the Boeing 747-8i, 777x, and Airbus A350. The question remains, however, is how did Lufthansa pick out the aircraft they have ordered out of so many possible choices?
To start, Buchholz broke down exactly how fleet decisions were made throughout the past few decades. In the 1950s, high ranking pilots had a major say in exactly what aircraft an airline would purchase. In the 1960s and 1970s, “engineering took over,” said Buchholz. Lufthansa was the launch customer for 737 in the 1960s during this time. In the 1980s, it became all about marketing and the hard product. None of those methods would work these days, said Buchholz, as today is all about economic and ecological awareness. The entire airplane purchasing process is now cost driven.
Lufthansa keeps two key topics in mind when selecting a new aircraft in the age of economic awareness. First, they select outstanding aircraft types that obtain best in class cost position over its life cycle. Second, the aircraft they select must be acquired in a continuous and sustainable manner. From the dawn of commercial aviation up through to the late 1980s, increases in aircraft and engine technology drastically reduced costs, be it fuel consumption or moving from a 3-man cockpit crew to a 2-man crew. These days, efficiency must come from the production cycle, utilization, and clever use of the aircraft by airlines.
Once Lufthansa has selected a particular aircraft, they opt to get involved in the design during the early phases to make that aircraft suit them in the best possible way. Most airlines do not get involved in the design until production has already begun. “Once the aircraft has been produced, you can’t change much,” said Buchholz. “You can tweak a little bit here and there…but we can’t change a significant amount of things.” Getting in early on the design process enables Lufthansa to receive an aircraft that will meet more of their needs than had they not gotten involved in the design process. “When we try to get integrated into the OEMs is when they commit the cost of operations.”
When it comes to evaluating individual aircraft from a catalog of nearly a dozen, as is the case with short-haul aircraft, Lufthansa has a set list of specific items they look for: Flight performance, operating costs, technology, environmental sustainability, product (cabin and seats), fleet strategy, industry political influences, risk assessment, and a feasibility study. Speaking further on environmental sustainability, Buchholz spoke for a few moments about aircraft noise. “Aerodynamic noise, which is a large fraction of the current noise development, is basically resistance or drag. Drag means I burn more fuel, so actually I don’t need an incentive to work on noise, because my incentive is the roughly 9-10 billion dollar fuel bill every year. If I can shave a per cent off that, it’s a visible number.”
On the interior of any aircraft Lufthansa selects, Buchholz was careful to mention that it must be flexible enough to withstand at least three modifications to the product. Lavatories, galleys, seats, entertainment systems, seat arrangements, and overhead bins are all factors that Lufthansa must make sure can be modified several times throughout the lifespan of an aircraft. Before a recent change, Lufthansa actually developed 47 different seating and cabin layouts just to get an idea of what was possible, and which worked best in each aircraft.
When asked about the future of aircraft development, Buchholz noted that while economics will be playing a heavy role in aircraft for the time being, things may change down the road. In the next 50 years, Buchholz believes that structural efficiencies and changes to aerodynamic design may come up. For the time being, however, the current shape and design of aircraft is here to stay.
Billions of dollars and years of work later, Lufthansa has sorted out the vision for their future fleet. Clearly, this is no ordinary decision, and the amount of work that goes into ordering even just a few small aircraft can be mind boggling. While most airlines do not go to such lengths in their ordering process, Lufthansa has believes that their method puts them in the best position to operate a group of profitable airlines.