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Is It Cheaper To Run Written Down MD's?  
User currently offlineBeaucaire From Syria, joined Sep 2003, 5252 posts, RR: 25
Posted (6 years 8 months 1 week 2 days 2 hours ago) and read 4182 times:

In the case of airlines like SAS or Alitalia who still operate a fleet of MD's ,is it financially better to keep them flying ,considering they are written off and have no direct finance-costs other than insurance and maintenance?
While the use of modern and fuel-ecomomic aircraft like Embraer's or new generation 737's /A320's seem logic ,the purchase of them presents a financial burden.
So how do airlines calculate the break point from where it is not any longer justified to run old aircraft,even if they are written off ?

[Edited 2008-03-25 03:09:21]


Please respect animals - don't eat them...
20 replies: All unread, jump to last
 
User currently offlineCHRISBA777ER From UK - England, joined Mar 2001, 5964 posts, RR: 62
Reply 1, posted (6 years 8 months 1 week 2 days 2 hours ago) and read 4134 times:

I think you mean "written down" - "written off" means something totally different!  Smile

In answer to your question, in many cases yes.

Remember the MDs are simple and easy to maintain, built like tanks, and incredibly reliable. The crews like them, and they are popular with passengers too. Fuel economy isnt the only factor in how economical an aircraft type is, as you know. Its the main one, but it isnt the be all and end all.



What do you mean you dont have any bourbon? Do you know how far it is to Houston? What kind of airline is this???
User currently offlineTheSonntag From Germany, joined Jun 2005, 3691 posts, RR: 29
Reply 2, posted (6 years 8 months 1 week 2 days 1 hour ago) and read 4040 times:

The stopper will come when noise regulations will require to re-engine the MD-80s in order to meet Chapter 4 standards. Until this happens, I think SAS will continue to use the MD80s. SAS is known to fly airplanes very long, and since there won't be a buyer for those planes who would pay a good price anyway, I see no reason not to fly them for years to come.

User currently offlineIADCA From United States of America, joined Feb 2007, 1346 posts, RR: 8
Reply 3, posted (6 years 8 months 1 week 1 day 21 hours ago) and read 3783 times:



Quoting Beaucaire (Thread starter):
While the use of modern and fuel-ecomomic aircraft like Embraer's or new generation 737's /A320's seem logic ,the purchase of them presents a financial burden.
So how do airlines calculate the break point from where it is not any longer justified to run old aircraft,even if they are written off ?

The classic case of this is NW with DC-9s. The death knell right now seems to be fuel costs, not airframe fatigue, MX checks, or noise restrictions. So, the answer is that, yes, it's often easier to keep old frames. But, it's pretty simple. Take two quantities:

Q1: fuel + MX + insurance, etc on old aircraft
Q2: fuel + MX + insurance, etc on old aircraft plus acquisition cost, crew retraining, whatever other incidental expenses are incurred in the switch.

Whichever one is lower is the one that gets chosen. But note there's also a degree of guesswork, in that the difference in costs a few years down the line (and expected future alternatives for DC9/MD replacement) also figures in. That is, if the airlines think they'll save more flying MDs for 8 more years and then getting a vastly superior replacement to 320s or 737s, they'll do that. It's not as simple as most people would have you believe, and there are many other factors as well (public perceptions of new planes, old planes, etc).


User currently offlineEBGARN From Sweden, joined Jan 2008, 226 posts, RR: 0
Reply 4, posted (6 years 8 months 1 week 1 day 21 hours ago) and read 3721 times:



Quoting IADCA (Reply 3):
Q1: fuel + MX + insurance, etc on old aircraft
Q2: fuel + MX + insurance, etc on old aircraft plus acquisition cost, crew retraining, whatever other incidental expenses are incurred in the switch.

SAS recently stated that "Q1" is the most financially viable option as long as the oil price stays below $200, compared with the alternative options available today. They plan on replacing them with the next generation 737/A320, and by that time I guess they could replace their 736 fleet as well. This opens up an opportunity for a fleet commonality never seen before in SAS Smile



A306,A319/20/21,A332/3,A343/6,A380,B717,B727,B737,B744,B752/3,B763,B772/3/W,C-130,AN26,CRJ900,Il62,DC-8/9/10,MD80's,BaeR
User currently offlineLAXintl From United States of America, joined May 2000, 26026 posts, RR: 50
Reply 5, posted (6 years 8 months 1 week 1 day 20 hours ago) and read 3598 times:

Check out this recent post. Per SAS its indeed cheaper to keep operating the MD-80s even with a run up of fuel versus investing in new planes for the immediate future
FG:SAS's MD80 Economical EvenIf Fuel Price Doubles (by Jdevora Mar 4 2008 in Civil Aviation)

Here in the US the classic example is NWA which keeps its DC-9s flying some of which have approached 40 years in age. Having no ownership cost offsets the high direct operating cost of the older models versus getting en efficient new model with lower operating cost, but having to deal with its ownership cost.



From the desert to the sea, to all of Southern California
User currently offlineEXAAUADL From , joined Dec 1969, posts, RR:
Reply 6, posted (6 years 8 months 1 week 1 day 20 hours ago) and read 3586 times:

I think the MD-80 is still a good plane if you have 150+ seats on it and can sell those seats. AA and DL are having some problems cuz they have 140 seats but Allegiant is up at like 160 with 90% LF, so they are still forecasted to make money even with $100 oil

User currently offlineATCRick From United States of America, joined Jun 2004, 772 posts, RR: 12
Reply 7, posted (6 years 8 months 1 week 1 day 20 hours ago) and read 3491 times:



Quoting EXAAUADL (Reply 6):
but Allegiant is up at like 160 with 90% LF

All except the MD87's have 150 seats. None have 160.



natch!!
User currently offlineBAC111 From United States of America, joined Feb 2007, 114 posts, RR: 0
Reply 8, posted (6 years 8 months 1 week 1 day 20 hours ago) and read 3441 times:



Quoting TheSonntag (Reply 2):
The stopper will come when noise regulations will require to re-engine the MD-80s in order to meet Chapter 4 standards.

What is the timetable for adoption of Stage 4 regs?


User currently offlineFATFlyer From United States of America, joined May 2001, 5843 posts, RR: 28
Reply 9, posted (6 years 8 months 1 week 1 day 19 hours ago) and read 3432 times:



Quoting EXAAUADL (Reply 6):
but Allegiant is up at like 160 with 90% LF, so they are still forecasted to make money even with $100 oil

Actually in today's USAToday there is a chart showing Allegiant still profitable even if oil goes to $110. Southwest is the only other airline estimated to be profitable at that level.
http://www.usatoday.com/money/indust...8-03-24-jet-fuel-costs_N.htm#chart

And as Rick said, Allegiant's aircraft seat 150 pax except for the -87s.



"Travel is fatal to prejudice, bigotry, and narrow-mindedness." - Mark Twain
User currently offlineSacamojus From United States of America, joined Dec 2006, 228 posts, RR: 1
Reply 10, posted (6 years 8 months 1 week 1 day 19 hours ago) and read 3388 times:

you take the incremental cash revenues(the savings on fuel or interest expense) minus the incrementa costs over projected life of the aircraft and discount those cashflows back to the current date. This is of course the simple equation and finding cost and potential cost savings is very hard to do and requires lots of data and a crystal ball.

User currently offlineG4LASRamper From United States of America, joined Dec 2006, 170 posts, RR: 0
Reply 11, posted (6 years 8 months 1 week 1 day 19 hours ago) and read 3307 times:

I don't know where that 160 number keeps coming from, but to repeat the correct numbers again and again in the hopes that they will stick:  Big grin

G4 MD-82, 83, 88 LOPA - 150 seats
G4 MD-87 LOPA - 130 seats

I'm in my last week as a Maintenance Planner at G4 so I won't have much current info about them anymore. We just put the third 88 on the line last week and the forth 88 is coming next month from Mexico. This fall I think there are five ex-Finnair 83s coming. So it looks like G4 plans to continue with these old work horses, er, MadDogs for the foreseeable future.

Implementing the upcoming Stage 4 requirements will be interesting to watch. All of our engines are -219s with a couple of -217Cs thrown in. When I started at G4 in June 06 they were actively looking at doing the winglets thing for the whole fleet. But I haven't heard anything about that recently - probably not cost-effective yet.



"A pig that doesn't fly is just a pig." - Porco Rosso
User currently offlinePrebennorholm From Denmark, joined Mar 2000, 6517 posts, RR: 54
Reply 12, posted (6 years 8 months 1 week 1 day 17 hours ago) and read 3173 times:

SAS has almost every airliner type in the world. The MD-80 is likely to be the most popular type among pax. For two reasons:

1. 2x3 seating. A lot of pax, both business and leisure, travel two together. They like the two seats on the left hand side.

2. The MD-80 is the most quiet plane inside the cabin. Up front. Only the rare MD-90 beats it.

The fuselage barrel is of course narrower than 737 and 320 planes. But it still has ample roof height for XXL size Scandinavians and also ample baggage bin space. While for instance on a 2x2 ERJ-170/-190 you really feel the cramped space.

Also the large and closely spaced windows add to the comfort of the MD-80. The ERJ on the other hand has small and widely spaced windows placed so low that only kids can actually see anything outside.

So whatever new toys SAS some day finds as replacement, then there will be pax thinking that it is a step backwards. And some might think that when they can "only" have a 737 or 320, then they can just as well fly on LH, KL, AF, BA or one of the other frequent visitors on SAS home turf.

The MD-80 does burn a little more fuel per seat/mile than the newest competitors, but not all that much more. On the rather short routes, on which the MD-80s fly, the fuel cost is not unimportant, but not all that significant.

I expect the SAS MD-80s to soldier on for many years to come. Both A and B have have their order books virtually filled until the middle of next decade, still there is not even a rumor about SAS MD-80 replacement.

During these days, with the lack of 24 Q400s, those MD-80s are busier than ever before.



Always keep your number of landings equal to your number of take-offs, Preben Norholm
User currently offlineEgmcman From United Kingdom, joined Jun 2005, 898 posts, RR: 8
Reply 13, posted (6 years 8 months 1 week 1 day 17 hours ago) and read 3089 times:



Quoting Prebennorholm (Reply 12):
Only the rare MD-90 beats it.

They are on longer in SK's fleet.


User currently offlinePrebennorholm From Denmark, joined Mar 2000, 6517 posts, RR: 54
Reply 14, posted (6 years 8 months 1 week 1 day 16 hours ago) and read 3073 times:



Quoting Egmcman (Reply 13):
Quoting Prebennorholm (Reply 12):
Only the rare MD-90 beats it.

They are on longer in SK's fleet.

Right. But they are still around in the sky. Iceland Express comes into mind.



Always keep your number of landings equal to your number of take-offs, Preben Norholm
User currently offlineN1120A From United States of America, joined Dec 2003, 26718 posts, RR: 75
Reply 15, posted (6 years 8 months 1 week 1 day 16 hours ago) and read 3062 times:



Quoting IADCA (Reply 3):

The classic case of this is NW with DC-9s. The death knell right now seems to be fuel costs, not airframe fatigue

The MD80, because of its size and low weight, is still very competitive on fuel consumption on routes within its range band.

Quoting Prebennorholm (Reply 12):


2. The MD-80 is the most quiet plane inside the cabin. Up front. Only the rare MD-90 beats it.

Ever fly on the 717?



Mangeons les French fries, mais surtout pratiquons avec fierte le French kiss
User currently offlineTWAL1011727 From United States of America, joined Mar 2006, 633 posts, RR: 0
Reply 16, posted (6 years 8 months 1 week 1 day 13 hours ago) and read 2862 times:



Quoting EXAAUADL (Reply 6):
AA and DL are having some problems cuz they have 140 seats

Interesting how Delta still has 117 left and the main reason they got rid of 3 was high lease cost.
American has/had near 250 of them. They both have 142 seats (excluding DL shuttle 134seats)
so if they were having problems with them, I think they would be grounding them enmass.

KD


User currently offlinePrebennorholm From Denmark, joined Mar 2000, 6517 posts, RR: 54
Reply 17, posted (6 years 8 months 1 week 1 day 13 hours ago) and read 2837 times:



Quoting N1120A (Reply 15):
Quoting Prebennorholm (Reply 12):


2. The MD-80 is the most quiet plane inside the cabin. Up front. Only the rare MD-90 beats it.

Ever fly on the 717?

No, I haven't. Sorry, forgot that one. They are not very common here. In fact I have never seen one.



Always keep your number of landings equal to your number of take-offs, Preben Norholm
User currently offline727forever From United States of America, joined Jan 2006, 794 posts, RR: 5
Reply 18, posted (6 years 8 months 1 week 1 day 6 hours ago) and read 2649 times:



Quoting N1120A (Reply 15):
Ever fly on the 717?

Are you suggesting that the 717 is quieter than the MD-8x or MD-90? They are all the same nose section so the wind noise is the same. The 717 is shorter than the MD-8x and MD-90 so the engine noise, though quieter, can be heard through more of the airplane. My source: I've flown all three for different airlines. All about the same forward of the wing. JT-8s are still loud in the back though.

Simple answer to the above question as many have said, yes if you own them or have low lease rates. I have noticed the MD-88 has fuel burns at Cost Index of 15 at mid weights around 130k of approx 6,000 lbs/hr, heavy weights of 145k of approx 6,500 lbs/hr, and at lighter weights of say 120k of approx 5,500 lbs/hr. These are rough numbers based on flying CI 15 in the 32,000 - 33,000' range at around Mach .75 +/- .01 Mach. What does all of this mean? She drinks it fast climbing but she gets there quickly and isn't so bad in cruise. The trick is to keep her high and on cost profile.

727forever



727forever
User currently offlineUAL727NE From United States of America, joined Dec 2007, 205 posts, RR: 0
Reply 19, posted (6 years 8 months 1 week 1 day 4 hours ago) and read 2590 times:



Quoting TWAL1011727 (Reply 16):
Interesting how Delta still has 117 left and the main reason they got rid of 3 was high lease cost.
American has/had near 250 of them. They both have 142 seats (excluding DL shuttle 134seats)
so if they were having problems with them, I think they would be grounding them enmass.

From what airlinepilotcentral.com says AA has 327 Maddogs! You can start a whole nother airline with those when they retire them.



Gotta love 3 holers!!! MD11,DC10,L-1011,B727 for life!!!!
User currently offlineBardoman From , joined Dec 1969, posts, RR:
Reply 20, posted (6 years 8 months 1 week 1 day 2 hours ago) and read 2449 times:



Quoting EBGARN (Reply 4):
SAS recently stated that "Q1" is the most financially viable option as long as the oil price stays below $200, compared with the alternative options available today.

Think of the profit margins on those planes when oil was below $20, in the late 90s!


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