US Airline fleet review update

As we approach the end of another month, here's a short review of the current US airline fleet. We monitor two key items: age and segment. We monitor age because this metric provides clues on maintenance costs and fuel burn. Like humans, aircraft don't necessarily age well. Older airplanes consume more fuel as they get heavier and require more health care. The parallels are remarkable, right? We monitor the segment because this guides how airlines see traffic and markets evolve. For example, are airlines upgauging or right-sizing? That choice filters fleet tradeoffs quickly. Aging Fleet [caption id="attachment_88503" align="aligncenter" width="580"] AirInsight[/caption] Older aircraft are not attractive to passenger airlines. Social media provides steady anecdotal evidence of broken airplanes interrupting schedules. Your correspondent has experienced this directly: a Delta 767-300ER departing Amsterdam took a 45-minute pause after pushback because an engine pump needed to be replaced. The chart shows that the US airline fleet is aging, except for single-aisles, which are getting younger. Regional jets are a special case in that there's only one source for new aircraft (Embraer), but the market is shrinking. Twin aisles are aging with an average age of ~16 years. This is somewhat close to 20 when most airlines replace their aircraft. Here's a breakdown for each segment. [caption id="attachment_88504" align="aligncenter" width="580"] AirInsight[/caption] The problem and solution among regional jets are apparent. Readers might find it interesting to know that the CRJ900 line is only half-age. But the 50-seaters are aging out, and there's nothing to replace them with except turboprops, which are far more fuel-efficient and equally practical. Are US passengers ready for this? Turboprops have an unfortunate history in the US, and that's a pity. Many communities might recover air service if this bias disappears. Delta has the three oldest single-aisle models. Hawaiian also has 717s, and United has old 757s. Delta was an early mover on the A321ceo and neo. American has the largest Airbus fleet and is also taking A321neos, and this year has seen United take several deliveries. Southwest was taking a new MAX every four days last year. This rapid fleet renewal among these big airlines is driving down the average fleet age. OEM delivery rates, being what they are, have slowed this trend. We expect the average age curve to continue trending down as MAX deliveries recover and Airbus squeezes more out of its supply chain. The twin-aisle fleet age also clusters around a few models. While Delta has many 767s, it retired its 777s. American retired 767s and A330s. United has aging 767s and 777s. American is focused on the 787 as the solution to their fleet requirements, Delta is focused on A330neo and A350 for its replacements, and United is also moving to 787s. Delta has an advantage because Airbus has delivered at better rates than Boeing. Segment Changes Monitoring segment changes is subtle. On the lower end, we have this peculiar market barrier called the Scope Clause. It has frozen development in the regional jet space, and there are downstream impacts as communities lose air service. Delta added nearly 50 A220-100s to cherry-pick markets and get around the Scope aberration. American has not moved into the crossover segment. United and Delta are also experimenting with the CRJ550. The next important segment is one of our favorite subjects - MoM, which is in the middle of the market. This used to be the playground of the 757. While the 757 demonstrated superb performance and continues to do sterling work, Boeing has not managed to get the MAX to cover for it. Airbus' A321, on the other hand, has been tweaked into several variants and now has the single-aisle part of MoM almost to itself. Take a look at this chart. [caption id="attachment_88506" align="aligncenter" width="580"] AirInsight[/caption] Airbus may be winning the MoM segment, but Boeing has also seen success. Alaska is now a predominantly MoM airline. Others, like Frontier and Spirit, are also entering the segment. The overall trend is clear: MoM is a happening market. Here's more proof from the DoT's T2 dataset. [caption id="attachment_88509" align="aligncenter" width="580"] US DoT T2; AirInsight[/caption] Although the MoM fleet accounts for ~ only 25% of the single-aisle fleet, it generates ~35% of the ASMs. Moreover, this segment has grown since the pandemic. Finally, at the top end, we have American and United with 777-300ERs. Delta is now entering this segment with its forthcoming A350-1000s. United has an infamous A350 order, and all bets are off where that goes. American appears to have no plans to add the 777-9, though that is the outcome when its -300ERs age out.

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