Why is Delta disclosing Boeing 717, 767 retirement plans 5 years in advance?
This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.
Some of the most striking early images of the coronavirus pandemic’s impact on aviation were the rows upon rows of jets parked at airfields around the world. So many were parked that the world’s busiest airport in Atlanta even closed a runway to store Delta Air Lines planes.
Many of those aircraft are now back in the skies, but others were not as lucky as airlines reevaluated fleet plans. Some of the oldest models, including Boeing 757s and 767s at American Airlines and McDonnell Douglas MD-88s and MD-90s at Delta, were retired as air travel remained at historic low levels with anyone’s guess as to when a true recovery might take hold.
With those decisions coming just weeks after air travel essentially returned to 1950s levels, it may have come as a surprise why Delta unveiled a new round of aircraft retirements — but not for at least another three years. The airline will remove the 125 Bombardier CRJ200s at Delta Connection affiliates by the end of 2023; and its 91 Boeing 717s and 49 remaining 767-300ERs by end-2025.
They Will Fly Again. pic.twitter.com/7pmbuTMn86
— Andy Luten (@andystravelblog) May 10, 2020
“Whilst demand is weak at present it is not so weak that the aircraft could all be removed from service immediately,” Cirium global head of consultancy Rob Morris told TPG.
By Morris’ calculations, 2025 is roughly the time when Delta will have enough new aircraft — namely Airbus A220s and A330-900s — in its fleet to replace both the 717s and 767s on a one-for-one basis. His analysis considered the roughly 47 717s and 17 767-300ERs that Cirium’s Fleets Analyzer shows are flying now and not stored, he added.
Waiting for a replacement jet makes some sense. While Delta may not need all of its 717s or 767s today — the airline will fly about 40% of what it did a year ago in the third quarter — it is likely to need them in the next few years. In addition, it costs an airline more to operate a small fleet of a plane type, thus making it necessary to keep a critical mass flying until the latest date possible.
Delta’s decision to retire its 777s offers an example of this. The carrier only decided to retire the small fleet of 18 jets after determining that it would enough new Airbus A350s with range-extending modifications to continue flying all the routes it flew with the 777. The only exception was Johannesburg, South Africa (JNB). But Delta made that work by adding a stop in Cape Town (CPT) on the return leg to the U.S. — adding a new dot to its route map in the process.
Airline fleet plans are of interest to more than just the carriers themselves. Investors and the orbit of companies around airlines also demand them for their own projections on carriers’ outlook.
“They’re businesses just like any other and they have to provide financial planning for investors and regulators just like anyone else,” Teal Group analyst Richard Aboulafia told TPG. Asked if five years was unusual, he said no and pointed out that many analyst forecasts go out 10 years.
The 1st Airbus #A220 aircraft produced at the U.S. Manufacturing Facility has flown for the 1st time. The A220-300, destined for @Delta Air Lines, took off from the Mobile Aeroplex at Brookley in Mobile, AL, this morning, performed its test sequences & landed safely at 1:44 pm. pic.twitter.com/4P8mr74im8
— Airbus in the U.S (@AirbusInTheUS) June 2, 2020
Indeed, Delta has released long-term fleet changes before. After 9/11, the airline accelerated the retirement of its Boeing 727 fleet by two years to 2003 from 2005 as a result of the attacks, according to its 2001 annual report.
However, these multi-year retirement dates can prove more a guideline than a hard and fast timetable. Delta also said it would retire its McDonnell Douglas MD-11 and MD-90 fleets by 2010 in the same annual report. While the MD-11s left earlier than forecast in 2004, the MD-90s only departed in June — a full decade later than planned.
Could that happen again? Who knows if, with only an average age of 18.8 years, a sudden return in air travel could prompt Delta to keep the 717s around through at least the end of the decade.
“We’ll be reporting back in 2025 to see if the airline followed through,” Brett Snyder, who runs the Cranky Flier aviation site and Cranky Concierge service, wrote about the Delta news in his Cranky Daily newsletter on Sept. 28.
— Edward Russell (@byerussell) April 12, 2018
Delta’s 717 and 767 disclosure shows that airline fleets are still very much in flux. United Airlines has yet to finalize any retirements — though it has put some of its 757s and all of its 767-400ERs in storage indefinitely — even as analysts expect it to permanently remove up to 200 jets.
Cowen analyst Helane Becker expects United to retire its 54 767s as a result of the crisis. However, such a move could occur over several years as the airline replaces the jets with new Boeing 787s.
Similarly, analysts expect COVID-19 to accelerate the retirement of Airbus A320s at Alaska Airlines, Embraer E190s at JetBlue Airways, and 737-700s at Southwest Airlines. None of these changes are expected to happen immediately, but could occur over the next several years.
Flyers best add more fleet adjustments to the likely furloughs and certain route map changes to the list of things yet to come during the pandemic.
Featured image by FG/Bauer-Griffin/GC Images.
Welcome to The Points Guy!
WELCOME OFFER: 80,000 Points
TPG'S BONUS VALUATION*: $1,600
CARD HIGHLIGHTS: 2X points on all travel and dining, points transferrable to over a dozen travel partners
*Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.
- Earn 80,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $1,000 toward travel when you redeem through Chase Ultimate Rewards®.
- 2X points on travel and dining at restaurants worldwide, eligible delivery services, takeout and dining out & 1 point per dollar spent on all other purchases.
- Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 80,000 points are worth $1,000 toward travel.
- Get unlimited deliveries with a $0 delivery fee and reduced service fees on orders over $12 for a minimum of one year on qualifying food purchases with DashPass, DoorDash's subscription service. Activate by 12/31/21.
- Earn 5X points on Lyft rides through March 2022. That’s 3X points in addition to the 2X points you already earn on travel.