Monday Update – November 26, 2018

Keeping Up With Airline Fleet Trends

With the capture of the Bombardier CSeries platform by Airbus, it brings to a close over 50 years of consolidation in the global airliner business.

With only a few niche exceptions, from this point on airlines won’t have the bother of trying to figure out who to buy planes from. They will have two options – Airbus and Boeing.

In that light, it might be of interest to see what’s on the fleet horizon for the coming year

Airbus Looking At A-320 Follow-On. Airbus has reported the start of long-term research to develop a clean-sheet new narrow-body airliner platform to be a follow-on to the A-319/320 series.

Missed in these reports is that they just acquired such a project – the Bombardier CSeries, a platform that actually is a next-generation narrow-body – one with substantial stretch potential.

Message: Folks in Mobile may need to keep a close watch on the A-220 program, in regard to future production, which is planned in that city. It may not be as long-term as some may expect.

MD-90s… Delta is continuing to reduce its fleet of MD-90s, a portion of which were acquired over the last ten years from other carriers, based on the aircraft’s favorable price v performance ratio.

Now, with new 737s and A-320/321s coming on line, it’s off to Dr. Hacksaw’s sunny desert resort for the MD-90s. There are no airlines left on the globe looking for MD-90s. Actually, that’s where Delta got a lot of their current fleet – from other operators. A great airplane, but an orphan.

B-717s…Another McDonnell-Douglas market-timing misfire, the MD-95, nee the B-717, is also seeing the start of retirement.

The fleet of ex-AirTran B-717s that Delta acquired from Southwest are apparently facing a shorter half-life than might have been expected, as the carrier has started to pull them from service.

Because of the unique engine on the -717 and the relatively low number of operators, it’s likely the next role of the airplane will be in a Bud Light commercial.

A-319s… American & United have been adding A-319s from various sources. United from several carriers, and AA gaining units coming off lease at Frontier. Acquisition costs are very favorable to the point that when these units come up for a heavy C-check, a keep-or-retire decision can be made.

A-380s… Air France is reportedly ready to retire half of its fleet of 10 of these super-jumbos. We would point out that Boyd Group International was the only forecast/consulting firm that from the git-go of this project forecasted that the A-380 would be fortunate to sell 400 units. The current deliveries and orders combined are at 352. The rest of the consulting industry swooned over the plane, without doing a shred of research beyond repeating what “everybody knows.” One major financial periodical confidently reported that “all major airlines are ordering the A-380.”

DHC-8-400s… Write this down: there will be a growing demand for turboprops in the 30-70-seat category… it just won’t be in North America.. Alaska/Horizon has pulled another four Q-400s out of its fleet in the last few months.

The US airline industry has less than zero interest in bringing anything back that has a propeller. Not so in other regions of the world.

The Russian A-320-ski, The MC-21. A new Russian competitor for the A-320/B-737, they managed to get the second prototype out of the factory this spring– a full year after the first one. Not exactly an accelerated program.

But it’s a big seller among Russian financial institutions that otherwise will have no earthly place to put these machines, assuming the production line ever gets rolling.

Aside from some orders from Aeroflot (likely due to a bit of government shin-kicking) the only real interest outside of Mother Russia’s sphere of influence has been an airline in Peru that’s not even operating.

50-70 Seat Jets… The Fuel Gods Are Smiling. For Now. Ten years ago, $100+ oil prices had this segment heading into history. For the time being, however, oil in the under $80 range will slow the retirement of this segment.

But if we see prices much over $80 again, it will be a different story. A lot of newly-added feed markets in the AA/DL/UA systems will be dropped should it appear that the increases in jet-A are more than a temporary spike.