Jumpseatnews.com - United Airlines flight attendant resources

Home > News > U.S. Airlines Put Off Buying New Planes

U.S. Airlines Put Off Buying New Planes

print
Source: Media Article

Date: Oct 29, 2007

Source: NY Times
Author: Jeff Bailey

plane taxiing to a gateIt's not just flights that are being delayed. United States airlines are also putting off purchases of new planes, meaning the nation"s fleet of aircraft, on average, is aging right along with the passengers.

Northwest Airlines, for example, flies 109 of the oldest jetliners in the country, DC-9s, with an average age of 35 years. Northwest has yet to decide how to replace the DC-9s, which could remain in service another five years or more.

American Airlines operates a fleet of 300 older MD-80s, a model that guzzles fuel and lacks the latest in passenger comforts. And American has only a handful of replacement planes coming in the next couple of years.

The fleet of big jets operated by nine major domestic airlines has aged steadily since 2002, according to Airline Monitor, an aviation research firm. The average age was 10.6 years at the end of 2002, and it has risen each year, hitting 12.2 years at the end of 2006. Domestic airlines largely stopped ordering new planes after Sept. 11, 2001, shrinking their fleets to adjust to a drop in demand. Travel has rebounded strongly, but airlines are, for the most part, years away from taking delivery on large numbers of new planes. A big reason is that Boeing and Airbus have committed most of their airliner production capacity in coming years to carriers outside the United States.

Indeed, only 43 of the 710 Boeing 787s on order have been identified as going to domestic airlines; 25 to Continental Airlines and 18 to Northwest. And none of the 165 giant Airbus A380s on order are destined for United States carriers. In essence a new generation of jetliners — bigger, more comfortable, more fuel efficient — is largely bypassing domestic airlines and their customers.

"The fleet is aging almost one-for-one with the calendar,” said Roger E. King, an analyst at CreditSights, who predicts that the trend will continue for about five years.

Scott Carr, a technology executive in Tulsa, Okla., said that when he flies on one of Northwest’s DC-9s, “I feel like I’m in a tuna can.”

“I’ve grown to know enough about the various kinds of airplanes,” Mr. Carr said. “I try to avoid Northwest now whenever possible. If I’m flying Southwest, they’re flying newer planes and I can tell the difference.”

Warren D. Miller, co-founder of Beckmill Research, a Lexington, Va., firm that appraises private businesses, said he braces himself for an old plane except when flying JetBlue Airways, which operates newer Airbus A320s. On other airlines, “the planes are just dirty; the upholstery is just not very comfy,” Mr. Miller said.

He wishes regulators would allow foreign airlines into the United States to fly domestic routes, which would increase competition and bring some new planes into the market.

Airplane cleaning became something of a lost art during the industry’s deep post-Sept. 11 swoon. Airlines are increasing the frequency of cleaning again, but still have some catching up to do. And the oldest planes often have the most grime.

Carl Zwisler, a Bethesda, Md., lawyer, said he did not think about the age of the US Airways 757 he was flying this month until visiting the lavatory.

“The bathroom looked old: dingy, dusty, not inviting,” Mr. Zwisler said.

Airlines could afford to buy more planes. United States carriers collectively socked away about $28 billion in cash, as of June 30. But they are using it to pay down debt or as a financial cushion after lean years when much of the industry took a tour through bankruptcy court.

Older planes are safe, experts said, largely because of nearly 20 years of government and industry research after a 1988 incident in which the fuselage of an Aloha Airlines 737 was torn open 24,000 feet over Hawaii, killing one flight attendant. It prompted the Federal Aviation Administration to form the National Aging Aircraft Research Program, studying metal fatigue and other problems in older planes and subjecting them to increased inspection and maintenance procedures.

Even so, the industry’s aging jets contribute to the general unpleasantness of air travel these days. They are often noisier and less comfortable than newer models.

They are delayed by mechanical problems more frequently than new planes and often have built-up grime in passenger spaces.

Moreover, airlines are using these planes on longer routes than in previous years, and onboard delays have grown more frequent, meaning a lengthier stay in less-than-ideal quarters. Planes will also grow even more crowded, as rising demand for travel bumps up against a shortage of planes.

Newer planes are generally roomier and some offer conveniences like seat-back television screens and outlets to recharge a laptop computer. But airlines configure them differently (SeatGuru.com provides comparison information on seat width, legroom and other features in its “comparison charts” section).

Airlines routinely announce refurbishment programs to install new seats, seat-back televisions, laptop outlets and other features. But those efforts can take two to three years to complete throughout the fleet, because they are typically done when planes are brought in for periodic heavy maintenance.

“Gadgets are very important,” said Linda Hirneise, who heads the travel practice at J. D. Power & Associates, the market research firm. “In coach, where most people fly, the airlines have taken away more and more.”

Mr. King, the analyst, estimates the industry needs to spend about $280 billion over the next 20 years to replace aging fleets. Even if they had the financial wherewithal, planes are getting hard to come by.

Asian airlines have big orders. Lion Air of Indonesia has 95 Boeing 737s on order. Qantas Airways of Australia has signed up for 65 Boeing 787s.

Discount airlines in Europe are also buying lots of new planes. Wizz Air, a Hungarian carrier, ordered 50 Airbus A320s this month. And Air Berlin has about 85 of the 737s on order.

With the exception of Southwest Airlines, the major domestic carriers have all either been through bankruptcy or narrowly avoided it in recent years. They were back in the black in 2006 and this year, but profit margins are still anemic — “amongst the worst industries in the country,” said Scott Kirby, president of US Airways. “The whole industry is hardly the poster child for strong credit.”

Thus, airline executives are cautious. Even with $3 billion now on hand, “anything we’d do with cash would be related to strengthening the balance sheet — paying down debt,” Mr. Kirby said. The airline recently placed a huge order for jets, but most of the deliveries are years off.

Philip A. Baggaley, a credit analyst at Standard & Poor’s, said that keeping a large cash reserve is, for some airlines, the best safeguard against another bankruptcy in the event of a recession or labor dispute.

But there are other demands on those cash hoards. Airline workers, who made wage and pension concessions during the last six years, want raises and better benefits. The airlines carry big debt loads, and investors would like to see some money go to stock buybacks. Frank Boroch, an analyst at Bear Stearns, prodded United Airlines management as early as last spring about “returning some of that excess cash flow to shareholders.”

< Return to Latest News


Quick Find

Travel and Safety

And now a word from...

Printed from www.jumpseatnews.com. Have a nice day!