Why new airline Northern Pacific is launching with 27-year-old planes

The livery looks fresh, slick and modern. The fuel-saving blended winglets add a futuristic touch.

But beneath the surface of Northern Pacific Airways' first Boeing 757 is a nearly 27-year-old plane that was first delivered to USAir in March of 1995.

Why launch a new airline with such old planes? There are two reasons, CEO Rob McKinney told TPG in an interview.

"It's really the only one that can do the mission and it's available," he said.

Northern Pacific plans to launch in the third or fourth quarter of this year and aims to be the Icelandair of the Pacific — connecting travelers between cities in the lower 48 states and Asia.

When McKinney talks about mission, he's talking about the aircraft's ability to carry a profitable amount of passengers and cargo for a requisite distance. In Northern Pacific's case, its longest route would be Orlando (MCO) to Anchorage (ANC), which is 3,818 miles long. That's near the maximum range of a 757-200, but it's a route that the aircraft is capable of operating (though, perhaps with a fuel stop during the winter if there are strong headwinds). In the last 20 years, U.S. airlines have used the 757 to fly from the northeast and midwest to various cities in Europe, and from Florida to Brazil and South America — routes that are of similar length.

When it comes to availability, the 757 is a unique aircraft. The Boeing 737 MAX 9 and 10 have a similar capacity to the 757, but a shorter range — and the MAX 10 is not yet certified. The A321XLR will have a longer range than the 757 and a similar capacity but hasn't even seen a prototype aircraft roll out of the hangar yet. Most importantly for McKinney, these aircraft have large order backlogs and won't be available for delivery to a startup like Northern Pacific for a number of years.

"They're not available," he said. "You can't just go get 10 of them — versus we're able to pull 757s mostly out of the desert and bring 'em back to life, and that gets us going. And for us, the timing of this is the most important part."

More: New US airline Northern Pacific Airways unveils its first Boeing 757 — and big ambitions

Daily Newsletter

Reward your inbox with the TPG Daily newsletter

Join over 700,000 readers for breaking news, in-depth guides and exclusive deals from TPG’s experts

Email address

Sign up

By signing up, you will receive newsletters and promotional content and agree to our Terms of Use and acknowledge the data practices in our Privacy Policy. You may unsubscribe at any time.

It's for this reason that Boeing's decision to end production of the 757 in 2004 has become one of the most heavily debated topics in aviation circles.

"They shouldn't have stopped making it," McKinney said. "I have impassionately told Boeing that they should retool it and maybe make some composite improvements."

Another benefit for McKinney and Northern Pacific is that used aircraft cost less money to acquire than new ones, said industry analyst Robert Mann, a former airline executive.

"The airplanes are cheap on an acquisition cost basis, they're obviously a fraction of what you would pay Boeing or Airbus for a new piece of comparable equipment if indeed it was comparable — it's not clear that it is," Mann told TPG in an interview.

While acquiring a used aircraft comes with lower acquisition costs, maintenance costs can be higher. How high depends on how much Northern Pacific plans to utilize its 757s, Mann said.

"If you were gonna fly them a little, I would say, total ownership costs on these might favor a low acquisition cost airplane with somewhat higher operating and maintenance costs," he said. "If you're gonna fly them a lot, you obviously want a brand new airplane, with warranty time and the most efficient operating and overall costs. So it comes down to how [McKinney] wants to use them."

More: American Airlines' Boeing 767s, 757s among 80 planes that won't fly again after the pandemic

Northern Pacific's 757s are undergoing heavy maintenance checks before they enter service. The aircraft unveiled on Tuesday, registered N627NP, was parked by American Airlines at the onset of the COVID-19 pandemic in 2020. It is currently undergoing what's known as a "C-check" – or a heavy maintenance overhaul required at regular intervals to keep a plane airworthy. A C-check is costly and generally occurs about every 60,000 flight hours, Mann said.

"It would be a very nice airplane if it came out of a C-check fresh," he said.