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In the Race to Modernization, Which U.S. Carriers Have the Youngest Fleets & What Role Does Age Play?

In the Race to Modernization, Which U.S. Carriers Have the Youngest Fleets & What Role Does Age Play?
Jeff Edwards

22old

Airlines like to boast about new planes and modern fleets, but which carrier can lay claim to the youngest fleet in the sky? And is a new plane necessarily a better plane?

The remaining legacy carriers in the U.S. retain a few aircraft with throwback liveries as a nod to the heritage that built today’s airline industry, but these carriers are quick to loudly proclaim that the planes themselves are new and improved.

American Airlines tells its flyers: “We’re building a younger, more modern fleet.” Meanwhile, United Airlines is boasting that its new Boeing Dreamliners are “a new kind of aircraft,” one that “is ushering in the next era of flight.” Even non-legacy U.S. carriers boast the modern nature of their fleets, with Southwest Airlines reminding passengers that their combined fleet has an average age of just 11 years.

While the airlines extol the virtues of a new and modern aircraft, many questions are left unanswered. In May 2012, American announced that it was five years away from having the youngest fleet among the major U.S. carriers, but with the competition ordering new aircraft — in some cases just as quickly as American — it isn’t guaranteed that goal is within reach.

The race for bragging rights to the latest planes with the most advanced features has heated up noticeably over the last few years.

Industry expert Richard Aboulafia, Vice President of Analysis at Washington-based Teal Group, told FlyerTalk in an interview that the spending spree fueling the race to update fleets has a lot to do with the easy money available to airlines right now.

“You’ve got investors with a total lack of other places to put their cash, so they’re throwing money at you,” said Aboulafia. “Jets are the hottest asset to finance.”

According to Aboulafia, the current environment has placed airlines in a historically unique position to retire and replace aging aircraft. “Cash is cheap and fuel is expensive,” he explained, noting the climate of easy financing available to airlines is in large part a result of years of mergers in the industry.

“We are left with four legacy hubs and spoke airlines, and they’re not going to fail,” said Aboulafia. “They are all too big to fail now.”

The question of which airline has the youngest fleet is more complicated than judging a fleet by the average age of its aircraft. American, for example, has more new planes than Southwest, but American also has more planes over 15 years in age than Southwest’s entire fleet.

According to the latest data compiled by AirFleets.net, Southwest still has the youngest fleet of the four largest U.S. carriers, boasting an average aircraft age of 11.8 years. American’s aggressive modernization plans have helped the carrier to reach an average fleet age of 13.5 years, just edging past United’s average fleet age of 13.7 years. Averaging 16.9 years, Delta has the oldest fleet of the four largest U.S. airlines.

Aboulafia doesn’t put much stock in an airline’s boasts about the age of its fleet, telling FlyerTalk: “I would urge everyone who follows the industry to ignore those statements.” Aboulafia noted that when an airline makes claims about the age of its fleet, it is more likely trying to impress investors than passengers. “If you’re an airline, you’re not selling your fleet, you’re selling your product,” he explained.

Furthermore, according to Aboulafia, the best product doesn’t necessarily mean the newest aircraft. “The last time I flew Delta long-haul, it was on an ex-Northwest 747, and I didn’t mind because my business class seat was gorgeous,” he said. “It was just a great experience.”

The calculations for low-cost carriers such as Southwest Airlines offer a different dynamic that makes a newer and more fuel-efficient fleet a necessity. Aboulafia noted that for low-cost airlines, “revenue is whatever the web drives you down to,” adding that: “It is all driven by cost, in which it is all driven by fuel burn.”

Aboulafia said he does not see the pace of airlines rapidly retiring and replacing aircraft to continue indefinitely, in part because the industry has been replacing planes so aggressively.

“The number of obvious planes that you want to get rid of and can get rid of and practically make money getting rid of is kind of diminishing,” said Aboulafia. “I mean there’s only 800 or so MD-80s left and then you’re getting in to planes like the 757, and you can’t do that because they’re really good planes and airlines are going to keep them no matter how old they are.”

[Photo: iStock]

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1 Comment

  1. relangford

    December 22, 2014 at 4:12 pm

    Fuel costs, which have been going down, are important, but so are personnel costs, which have been going up. Still, newer aircraft mean fewer takeoffs and landings and fewer flight hours. All-in-all, I’m generally for newer airframes.

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