Aircraft Age – Key Publishing

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By: Craigston_Tom - 26th March 2008 at 00:18

Thankyou both so much for your answers, this has helped me alot 🙂

Tenthije, I will could up with an answer for you as to why a “new fleet is a opportunity when it could just as well be reasoned as a threat.”

Thanks again

Tom

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By: tenthije - 25th March 2008 at 22:24

Old planes:
advantages

Cheap to buy/lease, potentially already paid off.
Spare parts are more likely to be obtained 2nd hand, thus cheaper.
Larger pool of employees to recruite from (pilots, mechanics etc). There are more people with a B733 qualification then there are with a E190.
If not necessary a plane can be parked without it costing too much. Think for instance of KLM that has something like 3 or 4 F50s on the ground all the time.
[5Might be able to take advantage of older regulations. For instance new-build combi planes are no longer allowed. Thus several airlines, KLM included, will fly the B74M due to the additional cargo revenue that can not be had from a younger B773.
Write-downs are gonna be less.
Available immediately.

disadvantages

Maintenance more expensive. In particular if you have to go for your D-check. Most airlines will park an aircraft when it comes up for a C- or D-check. For instance, immediately after 9/11 American Airlines parked several MD80s. They did not do so based on the amount of cycles or the age, but based on which planes needed heavy maintenance first. Thus it was entirely possible that a early MD80 was kept while a late MD80 was retired.
Fuel consumption most of the times higher. There might be exceptions like F100 vs B736 but typically not so.
You won’t have “bragging rights”. Making advertisements like “average age of our fleet is only 20 years” is not gonna look good. Of course that does not matter. Maintain a plane well and the average flyer won’t know the difference. Case in point obviously being NWA’s DC9s.
Due to weight or power restrictions it might not be possbile/economical to put in the latest in in-flight entertainment.
When selling the plane you won’t get as much money as you would with a newer plane.
Lower dispatch reliability, though proper maintenance should negate that.

new planes
advantages

Operating costs (maintenance, fuel) are likely to be lower. See disadvantages for a minor caveat
Write-downs will be more.
Increased bragging rights.
Dispatch reliability is likely to be better.
Better IFE (again bragging rights). Tend to be better prepared for future improvements in IFE in the form of additional electricity supply or ability to increase electricity.
You can sell on the plane for more money. Ryanair is believed to sell their planes on for more money then they bought them. Of course Ryanair is perhaps unique in that they openly acknowledged “having raped boeing through the floorboards”(I think that is the MoL quote). BTW, above number is probably not adjusted for inflation, but still a good achievement. Exact purchase price is not known so we won’t know for sure.
If a new planes type the manufacturer will give discounts to launch customers (at a risk of late delivery, worse performance then anticipated).

disadvantages

More expensive to buy/lease.
If a new type for your fleet you will have a lot of extra investments. Pilots and mechanics will need to be trained. A logistics network set up. Spare parts pool will have to be bought. Tools and equipment etc.
Waiting time for planes to be delivered.
If a new type in your fleet the staff will have to get used to it. This may, initialy, lead to lower dispatch reliability and more expensive maintenance. This will of course only be for a few weeks/months.
If a new completely new type the plane may not work as advertised by the manufacturer. Think for instance of the difficulty the A346 had immediately after entry into service. Airbus did have to pay some penalties.

I would also like you to explain why a new fleet is a opportunity when it could just as well be reasoned it is a threat. A new plane does not equal a bright future.

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By: adamdowley - 25th March 2008 at 19:01

You can find out the actual age of the aircraft in the fleet using GINFO (i.e. year built, provided all the aircraft are UK registered) – http://www.caa.co.uk/application.aspx?catid=60&pagetype=65&appid=1

When would be the right time to renew your fleet? Would it be when maintenance costs become too much, or if the reliability of an aircraft goes very poor.

This depends primarily on the strategy that the airline has. There is no right or wrong strategy as such – having said that though, either an airline chooses a strategy that leads to maintained or increased success, or one that causes problems; whether or not the chosen strategy is the best one can moreorless only be determined using hindsight. There are lots and lots of different strategies that airlines can take for fleet renewal.

Anyhoo, the two possibilities that you give i.e. maintenance costs and reliability are both possible strategies, the latter perhaps being a more risky choice. Also bare in mind that every airline will measure these two factors differently.

An airline may choose a strategy that says aircraft will be sold within just a few years of purchasing them – this keeps the airline fleet ‘young’ and ‘modern’. It also ensures that the aircraft will not have lost so much of its value – making it easier to sell them on – newer aircraft are generally far easier to sell than old aircraft that are on their last legs.

This is a strategy adopted widely in the low cost sector; whilst not so widely in the ‘legacy’ sector, because they prefer to try get as much out of the aircraft as possible and don’t worry so much about selling the aircraft on.

Without wanting to give you too much help :diablo: , you are going to want to make sure you explain WHY the opportunity is an opportunity. Try not to be too generic as well, because you could easily take the same opportunity and apply it to every airline under the sun. The same applies for your S.W.T sections.