BACHELOR OF SCIENCEDEGREE WITH HONOURS IN AEROSPACE TECHNOLOGY WITH PILOT STUDIES BSc Final Year ProjectReport School of Engineeringand TechnologyUniversity of Hertfordshire Theimprovement on profitability for Boeing 777’s and Airbus A330’s from seatingconfigurations. Report byMrToby Philip Fordham SupervisorMr Felix Zhu Date29th March2018 DECLARATIONSTATEMENT Icertify that the work submitted is my own and that any material derived orquoted from the published or unpublished work of other persons has been dulyacknowledged (ref. UPR AS/C/6.
1, Appendix I, Section 2 – Section on cheatingand plagiarism) StudentFull Name: Toby Philip Fordham StudentRegistration Number: 15004311 Signed:…………………………………………………Date:29th March 2018 ABSTRACT ENTERYOUR ABSTRACT HERE – The abstract should not be longer than 120 words and is ashort summary describing the contents of the report, rather than being asummary of the project. The purpose of the abstract is to enable a reader todecide whether the report might worth reading in detail. They would probablythen read the conclusions to determine the outcomes of the work. The abstractis not intended to replace any other part of the report e.g. the introduction.It merely provides a taste for what is to come.
ACKNOWLEDGEMENTS Thisproject wishes to express sincere gratitude to Mr Felix Zhu, whom has been thesupervisor of this Project. He has given opportunities to explore many avenuesof research and new thought processes throughout this project for ways toenhance profitability for different aircraft types. His assistance has beeninvaluable in terms of his ability for constant meetings which has allowed theproject to remain on a strict time scale. Gratitudeto the University of Hertfordshire must be given too as it has provided greatenvironment, resources and facilities which has enabled this project to be asuccess. Lastlyappreciation must be given to the school of Engineering and Technology and morespecifically to Ms Joanna Rawska for offering this subject title, as it hasbeen both challenging yet enjoyable.
Learning about a specific topic which incorporatesknowledge from the previous three years of University whilst utilising skillsfrom all educational areas from the past sixteen years. TABLEOF CONTENTSDECLARATION STATEMENT. iiABSTRACT. iiiACKNOWLEDGEMENTS. ivTABLE OF CONTENTS. vLIST OF FIGURES.
viiGLOSSARY. viii1. INTRODUCTION.
11.1 MARKET TREND. 11.2 COMPETITION. 21.3 BUSINESS CONDITION. 31.
3.1 PASSENGER FACTOR. 31.3.2 FUEL FACTOR.
41.3.3 LABOUR FACTOR. 51.
3.4 AICRAFT FACTOR. 61.3.5 MINI CONCLUSION. 61.4 METHODOLOGY. 62 AIMS ANDOBJECTIVES.
73 AIRCRAFTSELECTION. 83.1 Best-sellingAircraft 83.2 Features andbenefits of Airbus A330.
83.3 Features andbenefits of Boeing 777. 83.4 Main usage ofthe aircraft 84 CABIN SIZES. 94.
1 AIRBUS A330-200. 94.2 AIRBUS A330-300. 94.3 BOEING B777-200. 94.
4 BOEING B777-300. 95 SEATING CONFIGURATIONS. 104.5 AIRBUS A330-300. 104.6 AIRBUS A330-200.
104.7 BOEING 777-200. 104.
8 BOEING 777-300. 105 TRAVEL ROUTESFOR BOTH AIRCRAFT. 115.1 LHR (LONDONHEATHROW) – PEK (BEIJING) 115.2 LHR (LONDONHEATHROW) – JFK (NEW YORK) 115.
3 LHR (LONDONHEATHROW) – PVG (SHANGHAI) 116 PROFITCALCULATIONS AND ENHANCEMENTS. 127 CONCLUSIONS& RECCOMENDATIONS. 13BIBLIOGRAPHY.
14 LISTOF FIGURES Figure 1 – Market shareand orders of aircraft 3Figure 2 – Prices of Crude oil 4Figure 4 – Graph showingrate of change of oil prices 5 GLOSSARYAVIATION – theflying or operation of aircraftPAX- passengers when on an aircraftGMT- Greenwich Mean TimeCONFIGURATION– an arrangement or order of parts in aparticular form 1. INTRODUCTIONOne of themain focuses of a business in this century is the maintenance and increase ofprofitability which will help the overall performance of the Business and sowill help propel them forward in the business sector that they are in. Thisworks for any business in any area of business. This report focuses on theprofitability of airlines in terms of aircraft seating from two specificaircraft which have two variants in the subside of them. These aircraft willbe: Boeing 777’s and Airbus A330’s.
However, the information contained withinthe report will be transferrable to other aircraft in terms of the ways toincrease the profit levels. A detailed investigation into the aircraft and theseating configurations of the previously mentioned aircraft will be carriedout. The websites which will be looked at for the seating plans are firstly theairlines websites themselves as this is where the most accurate informationwill be kept and it will be the most up to date version of this. When lookingat the Airbus A330 and what ones they have in their fleet there are differentconfigurations as well as there being an Airbus A330-200 and Airbus A330-300.This is the same as the Boeing 777, this jet is also split into the BoeingB777-200 series and Boeing B777-300 series. This means that if each of thevariants of the aircraft have a minimum of 2 seating configurations there willbe a minimum of 8 configurations which this report will try to improve whichmeans that the overall aim of this project which is make improvements to thecurrent layouts to increase the profitability of the airlines. However, therecan and will be more seating layouts in some of the aircraft variants mentionedso that number will increase.
This way an accurate and wide range of aircraftconfigurations will be looked at thus giving a better knowledge andunderstanding of what optimisations can be carried out in order to betterimprove the profitability of the airlines that this report will look at.1.1 MARKET TRENDNomatter what business is being looked at their financial departments are alllooking for ways to improve the profitability of the business and to increasethis whilst minimising how much the expenditure is.
From an airlines point ofview this can be done in various way such as:· Increasing the number of routes they operate. Thisincreases profit as they will have more passengers on a yearly basis. Whilstthis increases the cost of sales as more passenger aircraft will be needed aswell as the increased number of staff required the airline will generate profitonce the aircraft has been ‘paid off.’ This means once that the expenditure ofan average of $233.8 million for an Airbus A330-300 has been paid for theairlines will be generating profit in a more linear style as the only costswill be staff and aircrew and fuel and maintenance costs.
Revenue will be madefrom the cost of sales of ticket prices.· Increasing the number of times a route is carriedout. This increases profit of the routes which are replicated and carried moreas the most popular ones will mean that all of the traffic (passengers) thatrequire the seats will be able to go on their flights more often meaning moreticket/seat sales for the airlines and with the increase in revenue this aidsand allows more profit to be mad. For example, the Independent newspaper foundthat in the month of July 2017, 451,801 passengers flew the route of Hong Kongto Taipei. This was worked out that 10 passengers a minute flew on this route.
Theremay well be many factors which affect this such as time of year, reasons fortravelling (assumed to be majorly business orientated). · Increased flight ticket costs – this means that withan increase in ticket prices the revenue generated from a flight would haveincreased. For an example; a flight which has 200 seats at £200 each that wouldmean £40,000 would be generated but if the same flight had 200 seats at £400that would be double the revenue at £80,000.· One of the main ways that airlines increase theirrevenues and in turn their profits would be by altering their seatingconfigurations with dominance to those seats that the majority of passengers oncertain routes fly in. For example; a flight which is predominantly businessadvocates travelling to and from business trips would mean an airline wouldmost likely have more business class seats on that aircraft, and due to thefact that business class tickets are more expensive more revenue will begenerated and thus more profit.1.2 COMPETITIONWithinaviation there are five major aircraft manufacturers.
The top five are: Airbus,Boeing, Bombardier, Embraer and Tupolev. From this short list, there are twocompanies which stick out and have a level of rivalry that could be compared toBMW vs Mercedes from the Motorsport industry and they are Airbus and Boeing.With Boeing being founded in 1916 and Airbus coming 54 years later in 1970,Boeing have had that much time in order to implement their stance in theaviation world. However, the two are closely linked and are rivals in theaviation industry. These two companies are equal sides of the duopoly ofcommercial jet liners since the 1990’s and this has resulted in smallercompanies being absorbed by Airbus and Boeing depending on the region they findthemselves in. For example, McDonnell Douglas of America was absorbed by Boeingin a 1997 $13.3 billion merger. In the financial year of 2016 Airbus received731 orders for new aircraft whilst Boeing saw a request list of 8.
62% less at 668 aircraft. Theseorder numbers are low for both companies when compared to other years includingthe 2009/2010 year. Theimage to the left represents the amount of aircraft delivered to airlines fromthe two manufacturers that are being reviewed and lookedat. Alongside this information is the 2016 market share as the graphs wereplotted in January 2017 as per the graph says. It is clear to see that sincethe year of 2000 Airbus has had monumental growth in its market share which isclear to see with the overtaking of Boeing in terms of market share where in2010 (where the graphs plotting ends) Airbus is around 5% above Boeing.
SingaporeAirlines have recently unveiled its new First-Class suites in both some oftheir Airbus and Boeing fleet. According to Skyscanner.net and for a flightfrom London to Sydney which has a stopover in Singapore on the 1stof March for one week and one adult has an average price of £7700, this is onthe aircraft of an Airbus A380. 1.3 BUSINESS CONDITION1.3.1PASSENGER FACTORAccordingto the IATA’s (international air transport association) figures from 2017 andthe past two years (2015-2017) there has been a rise in the amount ofpassengers that have travelled in the aviation sector with 3.561 billionpassengers flying in 2015 compared with 4.
085 billion flying in 2017 (as of the2017 mid-year report written by IATA) which is a 14.7% increase from 2015 This shows aclear increase in the amount of passengers travelling in a year by year effectand so, points can be made that as stated in the financial sheet by IATA thatbegins from 2015 which had an increase of 7.0% from the amount of passengersflying of 2014 with 4 consecutive years of passenger growth that it doesn’tseem to be slowing down. This means there is a continuous need development inthe airline sector and this includes the need for more aircraft which canaccommodate the current, potential and obvious increase in the amount of PAX.
Inaddition, with the added need for extra aircraft the types of passengers thatwill be and are travelling whether it is for leisure or for business purposeswill have an impact on the seating configurations that are required for theaircraft. 1.3.2 FUEL FACTORTheaviation industry in line with most of the industries that use fuel have hadto, recently, keeping in mind the rising fuel prices due to the fact that thecrude oil prices which aviation fuel is extracted have risen. Below is a tablecontaining the prices for crude oil per barrel from each January since 2010: Year Price ($) (from each January of each year) 2010 82.90 2011 101.91 2012 107.
12 2013 104.58 2014 108.13 2015 50.42 2016 29.
64 2017 53.65 Figure2 – Prices of Crude oilFromthe above it is clear to see that between the years of 2014 the price of abarrel of crude oil went down from $108.13 by 53.4% () to $50.42 and continued to fall to $29.
64 in 2016.This is where it ends however, as the prices are starting to rise from 2016 to2017. There have been many reports trying to explain why the price of crude oilpeaked at such a high price and hence, why it fell by so much as well. What canbe taken away from all of the reports and what makes the most justifiable senseis the fact that demand for oil for everyday activities whether its lightingfires, heating a family home, or flying a plane or generating fuel for thecars.
With a global recession, the demand for fuel for all services fell belowthe level of supply which was much greater. Other factors both economic andenvironmental had a large impact on the demand for oil and an example of thisis the rapid expansion of Chinas economy. The demand for oil rose and so pricesfor oil decrease with the effect of supply and demand. Within the aviationsector it can be understood that with each countries expansion in theirpopulations the travelling between countries or simply boarding an aircraft andtravelling whether pleasure or business can beassumed to rise at a similar rate.
Fuel for aircraft is extracted from crudeoil by blending and refining various petroleum’s which include Gasoline,Kerosene and Naphtha and the different types of jet fuel have to meet certainstandards and requirements and see whether its fit for purpose. Countries suchas the USA and Canada began different processes to increase the production ofoil and by doing so were able to reduce drastically the amount of oil that theywere importing and thus making the prices of oil drop even further.1.
3.3 LABOUR FACTORFrom the aforementioned topics regarding the currentbusiness condition of the aviation industry (increase in passenger) it can beunderstood that there will need to be an increase in labour to manage all ofthe services and such alike from day to day running of airports to aircraftcabin crew and to pilots flying the bought in aircraft. Inthe year of 2016 there were 2.65 million employees that were employed by all ofthe airlines according to sources including the IATA document which states thatby the end of 2017 there will have been a rise of 4.8% with regard to the numberof employees meaning that by the end of 2017 there will be 2.
78 million employees.This justifies the view that with the increasing number of passengers flyingwith the airlines there will be a concurrent increase in the amount of labourrequired to run such operations. 1.3.4 AICRAFT FACTOR 1.3.
5 MINI CONCLUSION 1.4 METHODOLOGY 2 AIMS AND OBJECTIVESThis project aimsto determine the profitability of the airlines seating configurations throughthe different types of seats that passenger jets have, and so the aim is tothen show how the current configurations can be altered and optimised to createa more profitable stance for the airlines. The objectiveswhich are to be closely monitored in order to maintain a good structure andfocus for this project are:· Compare pitch, width, floor space, cabin:width/length of aircraft.· Analysis of routes which are most popularbetween the aircraft which are selected and which reasons routes are as indemand as they are.· Analysis of Airbus and Boeing informationof seating configurations.· Data recorded to be synthesised toestablish correlation and links with:o Profitabilityo Layouto Total seat count· Seating configurations will be recordedas different airlines who use the same jets use different configurations soseat types and values will be recorded and means worked out.· Comparing the two types of aircraft (Boeing777 vs Airbus A330) in terms of cabin width, length, floor space and seatclass. Within the seat classifications their pitch and width.
· Current Profit margins worked out to seebefore any changes and optimisations are carried out.· To suggest alternative configurations tobetter the financial performance of the airline.· After optimisation, the new and potentialprofit margins will be analysed and calculated to determine if there can be anyfurther optimisations and so this part is a cycle and can be returned to. · Potential creation of new seatingconfiguration for maximum profitability as a general layout, whilst consideringdifferent “Class” options. 3 AIRCRAFT SELECTION3.1 Best-selling Aircraft3.2 Features and benefits of AirbusA3303.
3 Features and benefits of Boeing7773.4 Main usage of the aircraft 4 CABIN SIZES4.1 AIRBUS A330-2004.2 AIRBUS A330-3004.3 BOEING B777-2004.4 BOEING B777-300 5 SEATING CONFIGURATIONS4.5 AIRBUS A330-3004.6 AIRBUS A330-2004.
7 BOEING 777-2004.8 BOEING 777-300 5 TRAVEL ROUTES FOR BOTH AIRCRAFT5.1 LHR (LONDON HEATHROW) – PEK(BEIJING)5.2 LHR (LONDON HEATHROW) – JFK (NEWYORK)5.3 LHR (LONDON HEATHROW) – PVG(SHANGHAI) 6 PROFIT CALCULATIONS ANDENHANCEMENTS7 CONCLUSIONS & RECCOMENDATIONSBIBLIOGRAPHYAirbus.com. (2017).
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