As reactions to the disruptive longer range A321neo idea from Airbus percolates, we took a look at the key market for this aircraft. Take a look at the tables below: there are 636 (~65% of all 757s delivered) Boeing 757s in US airline service. In the second table we see how the model breakdown looks.Nearly 70% of the US fleet is the 757-200 model. This is where it appears the new A321neo is being aimed. Now lets see where Airbus sales team will be focusing their attention.
Even as we consider the fleet, it is worth noting the 757 has started to age. American is retiring 19 or 18% of its 757 fleet by year end. United has plans to retire 37, or 28% of its 757s this year. Delta has not shared its 757 retirement plans. But two of the big three are going to retire nearly 14% of the 757 capacity. These 56 aircraft mean a loss of 11,200 seats – nothing to sniff at if you have recently experienced of how full flights are. Assuming three daily turns, this means a loss of nearly 12.1 million seats per year. Throw in some Delta retirements and the numbers rise appreciably.
Now consider there are no 200-seater replacements coming into the US fleet at the same rate as the 757 retirements. Boeing 737-900ERs have 180 seats and the Airbus A321s have 171 seats – these aircraft come close, but may not cover the capacity loss. Considering that the big three are likely to keep retiring 757s as they reach expensive MRO checks, by 2019 there could be a lot fewer in service (perhaps 90?).
American advised us this may not be a problem for them as “We’re taking delivery of dozens of new A319s, A321s and 737s this year. As we’re retiring 757s, a lot of the 757 flying is being picked up by those aircraft.” Incidentally, American has not specified its model breakdown on the 100 MAX ordered. So we can’t be certain that many or any are MAX9. But the airline has converted A319 on order to A321s.
Delta is likely to keep more of these aircraft than either American or United, as they like running an airframe to its end of life. As the chart below illustrates, Delta was a consistent 757 customer long before American and United. We can also Delta took quite a few deliveries near the end of the program.
If retirements stay at 50 per year, there won’t be many left to replace by 2019. But some of that capacity is being picked up by airplanes not as well suited to the routes flown by the 757. A compelling longer range A321neo offering could displace these aircraft by offering an aircraft with both domestic and international capabilities.
Timing of EIS is a crucial factor for the 757 replacement. We wonder why Airbus is building the slow selling A319neo, with only 49 orders, before the A321, which has 749 orders? The good news is that there is time for Airbus to perhaps make the longer range version a new “standard’ for the A321neo. The bad news is that airlines need that replacement ASAP. Moving the A321neo ahead of the A319neo would be helpful.
In our view this market looks like a fertile field for Airbus’ sales team. Of the big three US carriers, one said that they have not seen any details on Airbus’ longer range A321neo yet, but would certainly pay attention. Will a long-range version of the A321neo be a market success? If it can reach the market fast enough to replace aging 757s, it should be successful.