Aircraft Retirement Pace Remains Historically Slow, Analysis Shows
Uncertainty over demand trends and new aircraft delivery schedules are among the factors continuing to suppress aircraft retirements, analysis from consultancy Naveo shows.
Airlines and lessors retired 429 aircraft in 2021, a Naveo analysis of Aviation Week Network’s Fleet Discovery data found. While the figure is likely to climb some as more data comes in confirming out-of-service aircraft as officially removed from the fleet, the figure is the lowest annual total since 2007.
“The retirement tsunami that was expected has, so far, failed to materialize,” Naveo MD Richard Brown wrote in his analysis. “Why? Parking and long-term storage are relatively cheap. Airlines and lessors prefer to wait and see how traffic (and residual values) recovers. There’s no point retiring an aircraft if there’s a chance it could come back into service or selling it for part-out at a later date, when demand for [maintenance] is higher, would yield higher revenue.”
The rapid rebound of some domestic markets has kept affected operators on their toes in terms of short-term fleet planning. Both Airbus and Boeing cut production rates during the downturn. While both are ramping up their narrowbody lines, some operators may be forced to keep flying older models longer than planned to meet demand while they wait for the manufacturers to catch up and hand over more efficient models flagged as replacement aircraft.
Aircraft owners retired 1.5% of the active fleet in 2021, slightly below the recent historical range of 1.7-3.4%. The average is 2.5%, Brown wrote in his analysis.
So far, 2022’s retirements are coming at a similar pace. Naveo calculates that 65 aircraft were officially retired in the first 10 weeks of 2022.
Several factors could help push retirements back to historical norms. Rising fuel prices is chief among them. Jet fuel prices have risen 95-150% in the last 12 months, depending on the world region, IATA’s Jet Fuel Monitor shows. If prices stay high, less efficient aircraft will become less attractive in-service options and could be formally removed from service.
The growing number of aircraft in storage also will prompt some owners to cash out while there is still demand for spare parts from the airframes and engines. More than 5,000 aircraft in storage as of mid-March had been parked for more than 90 days. About a third, or 1,759, were at least 21 years of age. This subset includes about 210 A320ceos and 120 737 Next Generation variants.
Naveo’s analysis shows aircraft retirement age has stayed stable since the pandemic began in early 2020. The average age of the 738 aircraft removed in 2020 was 23.12 years in service, while the average figure for the 429 removed last year was just under that figure, at 23.09 years. The two-year period included several sub-fleet anomalies that pulled the average figure downward, including 16 A380s that retired with an average age of 11 years in service, and 16 Embraer E-Jets that were removed with an average age of just more than 12 years.