US airlines may have to retire 1,000 jets. These are the ones that could end up in the boneyard.
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U.S. airlines are well on their way to a smaller future, at least for the next few years, once the coronavirus pandemic abates. More than 3,000 aircraft have been stored, flight schedules have been slashed and tens of thousands of staff have taken unpaid leave.
The planes that are still flying are undergoing intense cleaning procedures to woo wary travelers out of their homes and back into the skies. Some airlines are even willingly capping bookings and blocking middle seats to give would-be flyers the sense of “social distancing” while onboard a flight.
But in the end, airlines are facing a future that will see many of them shrink from their 2019 levels. That means fewer older planes for AvGeeks to get nostalgic over. But the planes that remain are likely to feature an improved — or at least modernized — inflight experience for travelers.
At the outset of the COVID-19 crisis, early comparisons to 9/11 indicated that older planes were the most likely to go. Newer jets that offer commonality with other types in fleets — like Airbus A320 family planes in favor of Boeing 757s — were the most likely to stay.
Analysts at Cowen now confirming this early view. In a new report on June 3, they outlined expectations that U.S. airlines will shrink their fleets by roughly 21% after the crisis. That percentage, which amounts to between 800 and 1,000 mainline jets, is the most specific forecast yet to how much smaller carriers must become.
“One thing is for certain, [airline] fleets will become younger and more efficient,” Cowen’s analysts said, mostly demurring from identifying specific planes that will disappear beyond those already mentioned by airline management.
Seattle-based Alaska could remove 43 aircraft from its mainline fleet, according to Cowen. That represents about 18% of its 237 planes at the end of 2019.
Alaska president Ben Minicucci has told staff that the carrier anticipates being about 20% smaller in the summer of 2021 than it was in 2019, the Puget Sound Business Journal reported Thursday.
Cowen expects Alaska to retire its A320 family fleet — 71 A319s, A320s and A321neos in December — as it accelerates plans to return to an all-Boeing 737 operation for its mainline fleet.
The analysts’ views fit with Minicucci’s comments in May, when he said Alaska faced “higher costs” if it continued to operate a dual-fleet of Airbus and Boeing jets. While the airline had not made a decision on a replacement for its Airbus planes — a process that begin before the pandemic — his comments indicated a direction towards returning to an all-737 mainline fleet.
At the May presentation, Alaska executives said the carrier had retired 12 jets already, including all 10 of its A319s plus two A320s. These aircraft are included in Cowen’s forecast.
Fort Worth, Texas-based American has been the most aggressive at retiring jets during the crisis. The airline has already accelerated the removal of four mainline types — Airbus A330-300s, Boeing 757s and 767s, and Embraer E190s — totaling some 80 aircraft. It has also put its 15 A330-200s in storage for at least two years.
That is not enough under Cowen’s new forecast. The bank estimates American will need to retire around 211 aircraft, or more than 20% of the 942 mainline jets it flew at the end of 2019.
American’s narrow-body fleet will be centered on the A320 family plus the 737-800 and — when it returns to service — the 737 MAX 8 after the crisis.
Unfortunately for many travelers, the airline is moving forward with its program to add seats to both its A321s and 737-800s. Known as Project Oasis, American executives say that investing in the work during the downturn makes sense to further simplify its operation — and save money — once travel recovers.
Delta Air Lines
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Atlanta-based Delta has made the most surprising fleet moves among U.S. carriers. While it accelerated the retirement of its McDonnell Douglas MD-88s and MD-90s to June 2, it has also decided to remove its 18 Boeing 777s — many of which were relatively young as airplanes go and had been recently outfitted with its latest onboard product.
Cowen estimates Delta will need to permanently remove around 191 aircraft from its mainline fleet. This amounts to over 20% of the 898 planes that it had at the end of 2019.
Long-term, Cowen analysts expect Delta’s fleet to center around the Airbus A220, A320 family, A330, Airbus A350 and 737-900ER, according to the report. This suggests that the airline’s Boeing 717s, 757s and 767s could go the way of the 777s and Mad Dogs.
Delta has already indicated plans to shrink its 717, 757 and 767 operations. In May, the airline told pilots that it would store around half of its 717s for the next two years. It will also shrink its 757 and 767 operations with the jets primarily focused on flying to Europe as international demand returns.
One good bit of news for travelers is the A220 appears to be in Delta’s good graces. Notable for being the only fleet the carrier continues to fully operate amid the crisis, the jet is quieter than the comparably sized 717 and features numerous onboard amenities that include personal entertainment screens and power outlets at every seat — not to mention fast inflight Wi-Fi.
New York-based JetBlue has not specifically accelerated the retirement of any aircraft due to the coronavirus. However, it planned to begin retiring its 60 E190s as it starts taking new A220-300s later this year. That process was scheduled to stretch through 2025.
The airline needs to retire around 79 aircraft, Cowen finds. This includes the 60 E190s, suggesting JetBlue may accelerate the removal of these jets. The airline operated 259 planes at the end of 2019.
JetBlue is alone among U.S. carriers in having accelerated some aircraft deliveries during the crisis. The carrier added one A220 delivery to its complement in 2021, with eight expected by the end of next year. It slashed A321neo deliveries by 22 aircraft through 2022 and now plans to take 24 airplanes during the period.
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Dallas-based Southwest is arguably the most bullish airline on its prospects after the pandemic. The airline has already loaded an essentially “full” schedule at the end of the year, with plans to fly 95% of what it flew a year ago by December.
With that in mind, the airline has not retired any of its 737s, though it is moving forward with previous plans to remove 16 737-700s this year. Southwest has put 106 jets in “long-term storage,” which it defines as requiring several days to return a plane to regular service.
Cowen estimates that Southwest will need to retire 176 aircraft, or nearly a quarter of its 711 jets at the end of 2019. These numbers do not include the airline’s 34 grounded 737 MAX 8s.
What Cowen expects Southwest to do is not retire planes en masse like American or Delta, but rather accelerate the replacement of 737-700s with MAXes once the re-engined Boeing jet is re-certified. This would allow Southwest to both meet its goal of operating a full schedule by year-end — and potentially grow in 2021 — while reducing costs by getting rid of older, less efficient planes.
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Like Southwest, Chicago-based United has not identified any specific aircraft for retirement. It argues that it is waiting to get a better view of the recovery from the coronavirus before committing itself to a smaller fleet.
“You take any fleet type that you thought we were going to retire, [and] we can just as easily park it right now,” United CEO Scott Kirby told investors on May 28, pointing to the fact that storage costs are the same as retirement costs at the moment. “So we don’t have to make those decisions yet.”
That does not mean United will not remove jets due to the crisis. Cowen estimates that the carrier could permanently park 192 mainline planes, or nearly a quarter of its fleet at the end of 2019.
United has provided some hints as to what could go. Its 757-200s in a premium transcontinental layout and 767-400ERs are in long-term storage pending a decision. In addition, Kirby has said that it could retire more 757s and 767s, and then some A320s if pushed.
What about regional jets?
The numbers for Alaska, American, Delta, JetBlue, Southwest and United do not include potential regional jet retirements in offing. Many 50-seat regional jets are expected to exit fleets, and other small planes may join them.
Additional aircraft retirements are expected at other U.S. carriers, as well. These include 15 planes at Allegiant Air, 13 at Hawaiian Airlines and 11 at Spirit Airlines, according to Cowen.
And we cannot forget all of the airline jobs that will lost as airlines shrink. Cowen estimates the industry could need as many as 13,000 fewer pilots once the crisis abates.
“October 1, 2020 is likely a day many within the US airline industry dread,” they wrote, indicating the day after job protections under the federal government’s coronavirus aid package, or CARES Act, expire.
Featured image by Alberto Riva/The Points Guy.
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