We have regular (ish) threads on aircraft values:viewtopic.php?t=1399391
The issue is PIPs reduce the cost of flying more for the larger types in a family than the smaller. Going from memory, the CFM-56-5 used to flying only about 14,000 cycles between overhauls on the A321 while on the A319 it was 20,000 (1st overhaul). Now it is 18,000 for the a321, and 20,000 for A320 and A319. The same is true on fuel burn.
It isn't size, it is the fact the size is reduced by cost isn't. Again, going from memory, it used to be a cost per flight of 7% to 8% savings flying an A319 vs. A320 or a 73G vs. 738. But after wingtip treatments ("Sharklets/Winglets")and engine PIPs, it is closer to 3.5% to 4%. Before there was enough of cost savings per flight to justify buying the shrink.
Yes, they are heading the way of the A318/736. Sad, but economic reality. Once production of the A220 and E2-195 ramp up, there will be airframes in the size that are economical. The A220 has done about as well as the A319 (now that Airbus is selling, assuming JetBlue and "Moxie" firm their orders).
Airbus expects to sell 3,000 A220 over the next few decades:https://leehamnews.com/2018/07/11/what- ... rbus-a220/
I personally expect more, but only after Airbus gives the production process a good scrubbing to cut costs and improve details (PIP).
The A220 has better CASM/CASK, from https://airinsight.com/cseries-beats-ne ... ile-costs/
Per that study, an A320NEO will cost $9.40 per mile to fly
A319NEO at $8.45 (much more cost savings than I estimate, but we'll take the numbers).
A220-300 at $7.62
A220-100 at $7.00
Compareto A320CEO at $10.20, A319CEO at $9.08, 738 at $10.16
Notice the A320NEO saved $0.80 per mile vs the A320CEO
But the A319NEO only saves about $0.50 per mile. So this shifts the business case for the A320 family to the larger family member as has been true of all PIPs. (PIPs always benefit the heavier members of the family more than the lighter unless there is a weight savings PIP exclusively for the lighter family aircraft.)
So compare to those new aircraft and the used (10+ years) A319/737-700 (aka 73G) have a poor resale value in use compared to their part resale value. It appears WN has slowed their 73G purchases which kills 73G resale value (they are taking a flood of -8 MAXes, so this was to be expected).
With high fuel prices (anything over $35/bbl for airlines is high) and new generation aircraft having *much* better predictive maintenance (saves money in the long run), I predicted in threads years ago that the retirement age of aircraft will drop.
But this will stabilize. Eventually used part prices will drop until the resale price drops to attract low utilization airlines to go out and buy more used aircraft. (e.g., Allegiant. Delta also flies a sub-fleet low utilization, hence the MD-80s/90s, as does AA and UA. So there is a market, for the right price.) In fact, the 737NGs and A320CEOs will have a long life in that role (not just at US airlines, they are just easier to analyze due to our quarterly report requirements).
In no way should either Boeing or Airbus discount new build -7 MAXes or A319 NEOs; their backlogs are too healthy to throw away profits at this time. However, the A220 and E2-195 will claw into that role. Look at that above chart. I believe Airbus will get the production in order such that the A220-300 will indeed provide CASM/CASK at the same level as the A320NEO. At that point it will sell very well. Poor Airbus will just have to build a greater fraction of A321NEOs.
Oh wait, I've been predicting that for years!
Boeing has already shifted to -8/-9 and soon -10 production, so it will be an easier transition for them (no size specific production lines).
The best analogy is the MD-80. For years they were being scrapped. So many the parts support became uneconomical and was shut down! Yet, we only see their final fading away due to an incredibly expensive avionics requirement that would be foolish to invest in. The same will be true of the A319CEO/NEO. They will drop in resale (but above the $300,000 the MD-80 bottomed out at) and find the same sort of niche (high RASK peak flying which is low utilization) as those old narrowbodies. Oh wait, there are already many examples in that role that just aged naturally to those operations.
Allegiant being the extreme example (they used to have zero flights on Tuesday IIRC), but I can identify subfleets at other airlines flying other roles. Look at how many fewer flights DL typically has on Tuesday and Wednesday versus the rest of the week as those days, excluding holiday weeks, have poor yield and so high variable cost aircraft get rest time those days.