July 16, 2012
Credit: Photo: Nigel Howarth
Lee Ann Tegtmeier Seattle
The retirement age of commercial aircraft is decreasing as the global fleet renews, which is causing teardowns at younger ages. Factors contributing to early retirement include higher fuel prices that make older aircraft more expensive to operate, financing that is easier to obtain for new aircraft than used and regulations impacting aging aircraft.
Of the 19,000 commercial aircraft in service, only 5,400 will remain in the global fleet by 2029, predicts Larry Schneider, Boeing vice president for product development, who says the average aircraft is about 25 years old at retirement.
TeamSAI concurs, forecasting that 30% of the 2012 fleet of in-service and stored commercial jets and turboprops will be retired within 10 years. In the last decade, the average age of the passenger jet fleet dropped two years, says David Marcontell, TeamSAI M&E Solutions president. If this trend continues, the average retirement age will drop one year for every five-year period, he says.
Aircraft due for heavy maintenance often are the first candidates for retirement or parking. Marcontell points out that aircraft “last off the [production] line,” especially those succeeded by newer models, are also targets due to their shorter useful economic life. As of March, 1,959 single-aisle aircraft were parked, compared to only 433 twin-aisles. The number of parked twin-aisles has remained relatively steady since 2005, but the number of single-aisles rose to a peak of 2,145 in early 2011 from 1,288 in late 2007, says Fred Klein, president of Aviation Specialists Group..
Not all aircraft reach the desert or dismantling facilities. “Niche aircraft such as the Boeing 757 and 767 are difficult to replace,” says Marcontell. Not having a replacement alternative, coupled with “a purchase or lease price low enough to offset fuel and maintenance costs, can make aircraft still viable on a cost-per-seat-mile basis,” he says. However, falling valuations make financing more difficult for aircraft older than 5-6 years, says Klein.
Will airlines be able to sustain the current level of fleet renewal, given higher aircraft prices or lease rates? Marcontell does not think so, but he believes the trend “is probably solid for the next 5-8 years.”