Premium #184 – Does Delta’s old aircraft strategy make sense?

In the US, Delta is famous for its decision to keep old aircraft flying, and has purchased second hand aircraft into its fleet. The most prominent of recent purchases include the 717 and the MD-90. We, like others, have thought that this strategy may have economic limitations. After all, older aircraft are less fuel-efficient and incur higher maintenance costs. The key is where those trade-offs break even, and how rapidly costs grow.

IndiGo just confirmed an order for 250 new Airbus aircraft, which they keep for only six years using sale and leaseback programs to always have a young fleet. This is the opposite of Delta, which saves substantially on capital expenditures by keeping older aircraft but incurs higher fuel and MRO costs. The recent massive decline in fuel prices has made Delta look very smart, as the savings in capital expenditures can compensate for a large amount of fuel at lower prices. But how have older aircraft impacted maintenance costs?