Airline Fleets will “bounce back” in 2021, but not as they were

The operational time of an aircraft can be summed up simply in the well worn phrase “It’s only making money when it’s flying”

Some of the latest data released today shows how that simply isn’t the case right now, with, for example A330 and A350fleets operating just 40% of their available hours in September 2020 compared to January 2020. That is of course those that are actually still flying.

A typical 737-800 flies 8.4 hours per day in normal times, but they average use in September was just 5.4 hours.

This morning, Pfizer announced that its first stage Covid Vaccine trials had a 90% effective rate; if that’s proven true it will be a game changer by late 2021, with enough doses made available to cover all of the US population and then some. Other vaccines are said to be close to similar success rates on similar time frames. If they can work quickly and be effective, then 2022 will be a very different year.

These include aircraft that are parked up but NOT considered long term stored
The numbers of stored aircraft are staggering

The question is what aircraft will airlines fly in 2021and what will they have in 2022 if things really do start to look like they’re a lot more normal?

What is clear is that giant jets with 4 engines were already on the way out of favour back in 2018/19. The 748i and the A380 were already clearly doomed, and the end of the A380 happened before Covid. The demise of the 748 was mostly timing for freighter deliveries.

Airlines like Emirates, who have based their fleet on massive aircraft with no real demand to operate them on the scale they were until maybe 2024-25, are starting to worry they may have to change direction far faster than they ever intended.

Other airlines clearly already saw the writing on the wall. From Qatar to Lufthansa, the big four engined aircraft have made a hasty, almost indecent exit, with only a few hanging on and likely not for long.

Why did Lufthansa, Korean keep the 748i?

I’ve been asked that question a few times and it’s relatively simple. The operating cost of the 748i was about the same as the A380. That, overall is not a good thing on the face of it, and its one of the reasons the airline never took all 25 of its order.

However, the A380 takes another 100 seats to sell to fill it, and if they aren’t at east 85% occupied, then the profitability of the aircraft plunges and the ‘yield’ per seat drops alarmingly, making them less profitable to operate than the 748i on a similar route. That’s why the lower capacity 748i’s have come into their own and it’s saved them for now, from the chop.

The pandemic has killed off so many aircraft types

Another advantage of the 748i is its actually better suited to belly cargo operations than the A380. Nobody I’ve ever spoken to about belly cargo on A380’s has a good word to say about it. It’s physically difficult to fill and not as big as you’d think it would be, bearing in mind crew numbers and rest areas are all in the belly section, along with a very large luggage space for all those passengers.

Will the A380 ever come back to service?

Lufthansa say they will only ever bring back a handful of A380’s if demand surges so dramatically that it makes them viable. That seems reote even at the best possible recovery projections. Air France says they’ll never come back, Etihad is unlikely to return theirs to service. Qatar says the same as Lufthansa, but has already declared their demise by 2024 in any event.

Qantas parked up theirs but at present says they may be back in service by 2023-4. It’s possible, but will they? Really?

Thai say they want to bring their back, but again, until demand on key routes like Frankfurt and London picks up they’ll sit and wait it out. It’s uncertain what Malaysia will do with theirs, the company is in almost permanent turmoil at present. Korean and Asiana are waiting out what happens, but China Southern is planning on full utilisation.

They say they plan to use them…one day

British Airways is scheduled to start using some on trans-Atlantic one a day services and South African routes but that’s very much subject to real demand. In any event they say the aircraft will be useful in the future. Heathrow is a unique airport and in terms of capacity and demand when things come back.

ANA have yet to take delivery of their third A380, not now to enter service until late 2021. All three of them are designed for and planned to operate on, the Tokyo-Honolulu vacation route.

That leaves Singapore and Emirates. Singapore as we know, have now decided to permanently retire the 7 oldest aircraft, bringing their fleet down to 12 from 19. They don’t have plans to retire the rest, the last five of which are almost brand new having replaced the first five that are now scrap (other than Hi-Fly’s which is now also likely to end up that way too).

Which of course leaves Emirates. I honestly think they will seriously re-evaluate their relationship with the aircraft, and they’ll be looking to replace them with newer, smaller types far sooner than they want to admit right now. If 70% of their A380’s return to service by 2025 I’d be surprised.

What of the 777?

And here lies the million dollar question. The old 773 and 772 versions are now being seen as something of a liability because of efficiency, maintenance costs and age. Many are finding their way out of service, and quite a few analysts have been a little shocked at how many and how fast. ANA, Thai, JAL, Delta and several others have sent many of these older versions off to the breakers.

777-300’s are now ageing and proving less economical

For now the 773ER seems to be holding its own. Yet its notably few and far between in operators preferred aircraft types right now. Emirates have no choice, it’s their only alternative to the A380. But if you’ve got 787’s or A350’s? They’re the aircraft that most airlines are keen to keep airborne more often than not. They strike the right balance in terms of seats, economy and running costs.

The real question is what happens to the 777-9? Almost everyone has deferred their deliveries, but Boeing are trapped in industrial programming that requires them to build them anyway. There’s even been a suggestion that actually, the 777-8 would probably now make a better fit for many airlines, but its very much on the back burner and unlikely to see the light of day.

And the A330?

You would think the A330 was probably a good fit right now but in fact its not been as active you might think. Mid-haul routes are not much in demand, and longer haul travel just hasn’t got the demand to fill an A330; and the older pre-neos are actually not economic enough to justify use. There’s even been talk that the whole pandemic has rendered the A330neo programme pointless, and that its long term viability is minimal. Time will tell.

Whats in use isn’t being used as much

Despite the fact more aircraft are coming back to service and more are intended to come back next year, they’re not being used as much – on average barely 40% of their normal levels. Plans for more aircraft being utilised are because its seen as no more expensive to under-use them than it is to pay for them to sit in storage and require maintenance.

That policy can only go so far. Sooner or later decisions on permanent retirements or long term deep storage must be made.