PSU.DTW.SCE
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Re: Delta looking into accelerating MD-90 retirement

Fri Apr 12, 2019 10:39 pm

The front of the cabin of the MDs is actually very loud during cruise due to the wind/ slipstream.
 
wjcandee
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Re: Delta looking into accelerating MD-90 retirement

Sat Apr 13, 2019 12:08 am

Dalmd88 wrote:
compensateme wrote:
The internal rumor was what to do about the MD90 and the MD11 fleets? Either dump them or go buy every last one. With the down turn of the economy the MD90 fleet decision was put on the back burner while the MD11 exited the property.


Interestingly, of course, the MD11 didn't actually exit the property -- at least as far as DL paying the capital costs of them went. While the ones that DL owned were I think sold to folks who wanted to convert them to freighters, at a substantial capital loss, the significant number that were leased were just parked and mothballed and DL planned to make the monthly lease payments on them until the leases expired. Why? Because the owners were no dummies. They were corporations like Disney and Northwestern Mutual who used the a/c ownership and leases as diversification for their balance sheets. They wisely included in the leases the requirement that the aircraft be returned in a condition that would make them immediately re-leasable as passenger aircraft. Obviously, therefore, they couldn't be converted to freighters without the express agreement of the owners, and there wasn't the slightest chance in Hades that the owners would allow that. Why? Because the market price of the aircraft, either as a purchase or a lease, was so significantly-below what McD had been paid for them new that the best financial deal for the owners was to continue to get from DL that monthly lease check, which was for a price far in excess of any alternative. By refusing to allow them to be converted, the owners effectively stuck DL with them and required DL to keep paying the monthly payment -- a nice, solvent lessee paying an above-market rate. DL parked several at Mirabel and several somewhere else, where they sat all buttoned-up awaiting the end of the leases. There was no real opportunity to sublease them to anyone to defer some of the capital obligation that DL had, because nobody wanted them. Then, World Airways, which was blowing and going with military flights, needed 3 or 4 (IIRC) more MD11 passenger birds, and, being headed by a former DL president, Hollis Harris, cut a deal to pay DL a market lease rate for the use of the aircraft as pax aircraft. That was way less than DL way paying Northwestern and Disney, but it was $$ nonetheless.

So a few came out of retirement to fly for World. This arrangement continued until DL declared bankruptcy. On the very first day, the very first leases that DL rejected in bankruptcy were all the MD11 leases. The rejection of the main lease stuck the lessors with aircraft they didn't want and they did the financially-expedient thing and immediately sold them to UPS and FedEx. World's subleases were terminated by virtue of the rejection of the overleases, but UPS cut a deal with World to let them continue to fly the aircraft in pax configuration in return for a market-rate lease payment until slots for conversion became available. Ultimately, World turned them over to UPS and they were converted.

The point of this tale is that DL disliked the economics (and other aspects) of the MD11s so much that they were willing to continue to make capital lease and insurance payments on them in order to not suffer the expense and hassle of operating them.
 
n7371f
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Re: Delta looking into accelerating MD-90 retirement

Sat Apr 13, 2019 4:00 am

Actually I clean Richard's glasses...

compensateme wrote:
n7371f wrote:
So what's your point?

compensateme wrote:

DL first discussed acquiring second hand aircraft in 2006, well before it entered merger talks with NW. and they definitely based their projections on a ~20 year lifespan, even going as far to say that they were projecting a $1B savings-less if R&M was higher than projected (it was) and lifespan shorter than projected (it was).


Responding to the incorrect narrative you replied to me with. Of course, you can always discuss it at the golf course with Richard Anderson and Ed Bastian :).
 
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seabosdca
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Re: Delta looking into accelerating MD-90 retirement

Sat Apr 13, 2019 4:07 am

wjcandee wrote:
The point of this tale is that DL disliked the economics (and other aspects) of the MD11s so much that they were willing to continue to make capital lease and insurance payments on them in order to not suffer the expense and hassle of operating them.


What a great post.

Not only were they willing to park them, they were willing to incur the further expense of bringing brand-new 772ERs onto property at a time when every long-haul airline in the world wanted to buy them.

I'm verrrrry curious whether the decision was all about economics (I'm sure they were the major driver) or whether there was also any degree of safety fear involved.
 
MSPNWA
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Re: Delta looking into accelerating MD-90 retirement

Sat Apr 13, 2019 4:44 am

MIflyer12 wrote:
I'll take the over on your 717 retirement estimate of 2020 or 2021. DL is spending too much to replace MD-88s, MD-90s and 767s, and will be spending too much to replace the oldest 320s and oldest 757s (and funding some modest seat growth) to be retiring 717s in any significant quantity before 2024.


What do you mean by "spending too much"? I think the difference lies in what you think is going first. I'm confident the 717 is right there with the oldest A320s and 752s as next to go. The economics of the 717 are subpar, and the unique engine and near orphan status cause me to believe it will be going sooner than most think. It's also the least capable performance-wise and is a separate pilot type. The A320s and 752s don't suffer from that combination.

Alias1024 wrote:
I wouldn't say that the strategy used by RA was a mistake at all. It kept CapEx down while Delta fortified their balance sheet and operations. Now they're in a far better position to acquire new aircraft either at more favorable financing terms or using cash flow from operations.


I'm not sure we can say that it kept the CapEx down since DL spent a lot of money up front to acquire and refurbish the fleet. It was supposed to be a good long-term play, and that part didn't work.
 
PSU.DTW.SCE
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Re: Delta looking into accelerating MD-90 retirement

Sat Apr 13, 2019 12:01 pm

Yes but look at many of the routes the 717 is now flying.
Stuff like DTW-BUF, ALB, ORD, TVC, MSN.

ATL-CHA, MEM, etc.

None of that stuff commands the “superior economics” because of the extremely short stage lengths.
 
ltbewr
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Re: Delta looking into accelerating MD-90 retirement

Sat Apr 13, 2019 12:59 pm

If DL was to buy a significant number of 737MAX's in a few years, would Boeing make a great 'trade in' offer for the 717's ?
 
MIflyer12
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Re: Delta looking into accelerating MD-90 retirement

Sat Apr 13, 2019 1:16 pm

ltbewr wrote:
If DL was to buy a significant number of 737MAX's in a few years, would Boeing make a great 'trade in' offer for the 717's ?


Doubt it. There's no demand for 91 717s worldwide. That was the brilliance of getting DL to take: a decent-sized fleet in one transaction. Hawaiian inter-island blah blah. They don't need anywhere near 50, let alone an added 91.

Boeing is going to need to give great offers to sell MAXs for a while, anyway. It's just speculation, but I'm guessing DL will announce an order for MAXs within weeks of the software fix and the worldwide fleet returning to the air.
 
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lightsaber
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Re: Delta looking into accelerating MD-90 retirement

Sat Apr 13, 2019 2:06 pm

MIflyer12 wrote:
ltbewr wrote:
If DL was to buy a significant number of 737MAX's in a few years, would Boeing make a great 'trade in' offer for the 717's ?


Doubt it. There's no demand for 91 717s worldwide. That was the brilliance of getting DL to take: a decent-sized fleet in one transaction. Hawaiian inter-island blah blah. They don't need anywhere near 50, let alone an added 91.

Boeing is going to need to give great offers to sell MAXs for a while, anyway. It's just speculation, but I'm guessing DL will announce an order for MAXs within weeks of the software fix and the worldwide fleet returning to the air.

Actually, the best way for Boeing to ensure good long term economics is to buy back 717s above market. Sell DL MAXs and E2s, on the books at a small profit. Take the loss on returning 717s. This way, anyone demanding the same offer as DL could get it, a profit for Boeing as no one else has 717s to return in quantity.

Same with E2s.

Yes, bookkeeping shenanigans, but it keeps the forward losses low.

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MIflyer12
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Re: Delta looking into accelerating MD-90 retirement

Sat Apr 13, 2019 2:24 pm

lightsaber wrote:
Actually, the best way for Boeing to ensure good long term economics is to buy back 717s above market. Sell DL MAXs and E2s, on the books at a small profit. Take the loss on returning 717s. This way, anyone demanding the same offer as DL could get it, a profit for Boeing as no one else has 717s to return in quantity.


That's booking an even bigger loss now (on the 717s - obviously impaired because even the most creative auditor can't plausibly argue there's a home) for profits when MAXs are delivered. Boeing's earnings are going to take a hit this year because of customer reimbursements and smaller MAX deliveries. I don't think execs will want an even bigger short-term hit.
 
VictorKilo
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Re: Delta looking into accelerating MD-90 retirement

Sat Apr 13, 2019 2:54 pm

Another way that DL could speed the replacement of the MD90's would be to take some used MAX frames. The WFU/NTU examples from Jet Airways could be the seed, supplemented by additional orders.
 
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Re: Delta looking into accelerating MD-90 retirement

Sat Apr 13, 2019 4:11 pm

MIflyer12 wrote:
lightsaber wrote:
Actually, the best way for Boeing to ensure good long term economics is to buy back 717s above market. Sell DL MAXs and E2s, on the books at a small profit. Take the loss on returning 717s. This way, anyone demanding the same offer as DL could get it, a profit for Boeing as no one else has 717s to return in quantity.


That's booking an even bigger loss now (on the 717s - obviously impaired because even the most creative auditor can't plausibly argue there's a home) for profits when MAXs are delivered. Boeing's earnings are going to take a hit this year because of customer reimbursements and smaller MAX deliveries. I don't think execs will want an even bigger short-term hit.

Yes, but as Boeing's profitable are good, it preserves future E2 and MAX sales pricing. Boeing has to take a short term hit on both to jump start them. Best if the future orders are profitable.
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MSPNWA
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Re: Delta looking into accelerating MD-90 retirement

Sat Apr 13, 2019 4:21 pm

PSU.DTW.SCE wrote:
Yes but look at many of the routes the 717 is now flying.
Stuff like DTW-BUF, ALB, ORD, TVC, MSN.

ATL-CHA, MEM, etc.

None of that stuff commands the “superior economics” because of the extremely short stage lengths.


That's what the CR9, E75, A220, A319, A320, 738, etc. are for.

DL isn't going to ground a new A220 or A321 just so a 717 can fly DTW-BUF once a day. Fleet age/replacement timeline is the defining reason why the 717's days are likely short. It's already playing out with the MD-88/90. The least economical planes will go first. The 717 is low on the efficiency list.
 
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Re: Delta looking into accelerating MD-90 retirement

Sat Apr 13, 2019 6:42 pm

MSPNWA wrote:
MIflyer12 wrote:
I'll take the over on your 717 retirement estimate of 2020 or 2021. DL is spending too much to replace MD-88s, MD-90s and 767s, and will be spending too much to replace the oldest 320s and oldest 757s (and funding some modest seat growth) to be retiring 717s in any significant quantity before 2024.


What do you mean by "spending too much"? I think the difference lies in what you think is going first. I'm confident the 717 is right there with the oldest A320s and 752s as next to go. The economics of the 717 are subpar, and the unique engine and near orphan status cause me to believe it will be going sooner than most think. It's also the least capable performance-wise and is a separate pilot type. The A320s and 752s don't suffer from that combination.

Alias1024 wrote:
I wouldn't say that the strategy used by RA was a mistake at all. It kept CapEx down while Delta fortified their balance sheet and operations. Now they're in a far better position to acquire new aircraft either at more favorable financing terms or using cash flow from operations.


I'm not sure we can say that it kept the CapEx down since DL spent a lot of money up front to acquire and refurbish the fleet. It was supposed to be a good long-term play, and that part didn't work.


DL learned their lesson with the D5 motors, and that's why the 715 was brought in house. The deal with RR was to support the 715 through 2030, so there is life left in that engine. The shop is just now getting going.

WN actually paid to have the DL interiors installed per the lease agreements, and they are still, to this day, subsidizing the lease payments on all of the subleased 717s. They were that desperate to get rid of them that they went to great lengths to get them off the property. It was pennies to acquire them.
 
wjcandee
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Re: Delta looking into accelerating MD-90 retirement

Sat Apr 13, 2019 7:56 pm

MSPNWA wrote:
I'm not sure we can say that it kept the CapEx down since DL spent a lot of money up front to acquire and refurbish the fleet. It was supposed to be a good long-term play, and that part didn't work.


True. However, the decision matrix going forward is the result of decisions made in the years since RA left. And almost all of that is driven by the metrics that DL chooses to show to Wall Street.

That is, most other airlines like shiny new aircraft, so they trade higher capex for lower operating cost (maint and fuel). And all the 20-year-old analysts dutifully focus on the Industry Standard levels of capex and operating cost and total debt. Most airlines roll up huge levels of debt, then go bust when they can't service it in the inevitable downturn. Then Greater Fools provide new capital and the process starts over.

Anderson worked hard to get DL's debt levels down to normal investment-grade opportunities, and part of that was not to blow capital expense on aircraft that only marginally improved operating cost. Pay people and such rather than pay debt service on ballooning debt.

His successors really undid that model, much more than they admit. Had RA still been there, the otherwise-well-performing MD90s would be hanging engines that were being serviced in-house, and the forward economics would look different, as they will with the BR715 and the 717. Had RA still been there, either the IS&S or the Pegasus FMS product might have been installed, the Super 98 package might have continued to be installed (it was working as advertised), and the long-term utility of the MD88 aircraft might have been improved.

Plainly, at some point the new management's focus came off of Debt Load and Cap Ex, and they started chanting the mantra of all airline exec's everywhere to the effect that they are keeping operating costs low by buying shiny new aircraft. When John Tague was at ATA, he spent like a drunken sailor on new gold-plated 737-800s with every bell and whistle imaginable, and that was going to attract business travelers and explosively-grow the airline. He ended up burying it instead. Stupidest thing George Mikelsons ever did was to give control to Tague. Had he brought in an Anderson disciple instead, his airline would probably still be around. Instead, I saw an ex-ATA Tague 737-800 being converted to an Amazon freighter this week.

The past and present result in the opening of certain paths and the elimination of others, all of which affects the future.
 
jagraham
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Re: Delta looking into accelerating MD-90 retirement

Sat Apr 13, 2019 9:14 pm

md83ftw wrote:
lightsaber wrote:

What interests me is how quietly DL went from 65 MD-90 to 40. The engine MRO costs on the V2500D5 are certainly driving the decision.


I wasn't even aware they were winding down the fleet, such a shame to see these beautiful arrows go. I'm genuinely surprised, only a few years ago Delta's MD90 costs were comparable to their A320 fleet and lower than the 738s, see this (brilliant) US airline operating costs post from LAXintl in 2014:

LAXintl wrote:
For reference, the reported total block hour cost includes things like - aircraft ownership(lease/mortgage/financing), crew, insurance, taxes, direct maintenance, and long term maintenance accrual burdens(eg power by hour contracts).

LAXintl wrote:
Legend = Total block Hour Cost USD / Burn per hour gallons / Average stage length / CASM

- A320: DL - $4692 / 757 / 893 / 8.6

- 737-800: DL - $4879 / 794 / 1301 / 7.6

- MD-90: DL - $4690 / 778 / 771 / 8.3


Granted, the 90s were flying shorter stage lengths, but were nevertheless highly competitive it seems!


Are there similar numbers for the 739s and A321s?
 
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Re: Delta looking into accelerating MD-90 retirement

Sat Apr 13, 2019 9:59 pm

md83ftw wrote:
lightsaber wrote:

What interests me is how quietly DL went from 65 MD-90 to 40. The engine MRO costs on the V2500D5 are certainly driving the decision.


I wasn't even aware they were winding down the fleet, such a shame to see these beautiful arrows go. I'm genuinely surprised, only a few years ago Delta's MD90 costs were comparable to their A320 fleet and lower than the 738s, see this (brilliant) US airline operating costs post from LAXintl in 2014:

LAXintl wrote:
For reference, the reported total block hour cost includes things like - aircraft ownership(lease/mortgage/financing), crew, insurance, taxes, direct maintenance, and long term maintenance accrual burdens(eg power by hour contracts).

LAXintl wrote:
Legend = Total block Hour Cost USD / Burn per hour gallons / Average stage length / CASM

- A320: DL - $4692 / 757 / 893 / 8.6

- 737-800: DL - $4879 / 794 / 1301 / 7.6

- MD-90: DL - $4690 / 778 / 771 / 8.3


Granted, the 90s were flying shorter stage lengths, but were nevertheless highly competitive it seems!

1. DL aquired MD-90s so cheap it reduced costs.
2. A320 and 738 had higher purchase costs
3. Both A320 and 738 have received PIPs to reduce fuel burn and maintenance costs (engine PIPs and Sharklets).
4. Shared parts with MD-88 reduced maintenance costs a little in 2013.
5. V2500D5 rebuild costs have almost doubled while CFM-56-5/7 and V2500Ax costs have dropped (a tiny amount).

All of this conspires to add about $450/hr to MD-90 flying costs and reduce A320/738 costs about $50/hr. Or the MD-90 went from $2/hr cheaper to about $498 more per hour than the A320.

Now, the lease/finance costs of a NEO will add, but subtract from fuel. About $200 less per flight hour than a CEO. Note: only buy new for high utilization.
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w3gar
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Re: Delta looking into accelerating MD-90 retirement

Sat Apr 13, 2019 10:13 pm

lavalampluva wrote:
w3gar wrote:
I flew on N945DN from ATL to ORD back in 2014. According to Flightaware, it seems like it is out of service. https://flightaware.com/live/flight/N945DN
Crazy the fact that these MD90s will soon be fully retired once Delta gets rid of them.

Looks like the last flight was 2/14/2019 and has been at BYH since. Is that a scrapping facility?

Could possibly be. Apparently it is stored for now. https://www.airfleets.net/ficheapp/plane-md80-53559.htm
 
ukoverlander
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Re: Delta looking into accelerating MD-90 retirement

Sat Apr 13, 2019 10:22 pm

HaulSudson wrote:
Well, it's 2019 after all.

Seems this belongs to a place and an era where people were still using paper cheques.

:duck:


I hear somebody is working on a new 'Paper Cheque Max' that will come with a spiral bound checklist advising folks what to do in the event of problems. The companies marketing department claim it is the "best thing since before sliced bread", given that when these were first produced sliced bread had yet to be invented. :duck: :duck: :duck: :duck:
 
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compensateme
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Re: Delta looking into accelerating MD-90 retirement

Sat Apr 13, 2019 10:42 pm

ltbewr wrote:
If DL was to buy a significant number of 737MAX's in a few years, would Boeing make a great 'trade in' offer for the 717's ?


Boeing owns nearly all of DL’s 717. FL had leased them; per their latest 10K, leases expired 2017-2022, with options to purchase (at market value since these are classified as operating leases) or extend the leases up to four additional years. DL obviously opted to extend the leases an additional four years, and not purchase the aircraft...
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compensateme
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Re: Delta looking into accelerating MD-90 retirement

Sat Apr 13, 2019 10:44 pm

777Mech wrote:
MSPNWA wrote:
MIflyer12 wrote:
I'll take the over on your 717 retirement estimate of 2020 or 2021. DL is spending too much to replace MD-88s, MD-90s and 767s, and will be spending too much to replace the oldest 320s and oldest 757s (and funding some modest seat growth) to be retiring 717s in any significant quantity before 2024.


What do you mean by "spending too much"? I think the difference lies in what you think is going first. I'm confident the 717 is right there with the oldest A320s and 752s as next to go. The economics of the 717 are subpar, and the unique engine and near orphan status cause me to believe it will be going sooner than most think. It's also the least capable performance-wise and is a separate pilot type. The A320s and 752s don't suffer from that combination.

Alias1024 wrote:
I wouldn't say that the strategy used by RA was a mistake at all. It kept CapEx down while Delta fortified their balance sheet and operations. Now they're in a far better position to acquire new aircraft either at more favorable financing terms or using cash flow from operations.


I'm not sure we can say that it kept the CapEx down since DL spent a lot of money up front to acquire and refurbish the fleet. It was supposed to be a good long-term play, and that part didn't work.


DL learned their lesson with the D5 motors, and that's why the 715 was brought in house. The deal with RR was to support the 715 through 2030, so there is life left in that engine. The shop is just now getting going.

WN actually paid to have the DL interiors installed per the lease agreements, and they are still, to this day, subsidizing the lease payments on all of the subleased 717s. They were that desperate to get rid of them that they went to great lengths to get them off the property. It was pennies to acquire them.


WN paid for DL’s start-up costs, but denied it paid (or is paying) to subsidize the leases. Even if they did, the initial lease terms are now expiring (and will be through 2022), and if DL’s exercising the four year renewal option, no doubt WN isn’t paying a penny.
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Re: Delta looking into accelerating MD-90 retirement

Sun Apr 14, 2019 1:50 am

compensateme wrote:
ltbewr wrote:
If DL was to buy a significant number of 737MAX's in a few years, would Boeing make a great 'trade in' offer for the 717's ?


Boeing owns nearly all of DL’s 717. FL had leased them; per their latest 10K, leases expired 2017-2022, with options to purchase (at market value since these are classified as operating leases) or extend the leases up to four additional years. DL obviously opted to extend the leases an additional four years, and not purchase the aircraft...

Interesting.

That means this year a decision is required if the first leave in 2021. Did they extend all leases? I do not know DL's terms, but typically 2 years notice either way is required. So I would expect DL to remain flexible on mid-2021 and later expiring leases. Note:. I assume leases are in traunches and not for the entirety.

Boeing will be very realistic on market values. There is money to be saved on E2-195s or A220s. Since DL would buy enough, I won't rule either out. In fact, the short range of the 717 is bested by either option.

:scratchchin:.

It is an incredibly good year to buy at Paris. I have trouble imagining better future terms For the E2-195, A220, or MAX. Airbus will negotiate on the A320 too. To win would take selling for less than others would buy A320s for though.

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Re: Delta looking into accelerating MD-90 retirement

Sun Apr 14, 2019 1:54 am

compensateme wrote:
777Mech wrote:
MSPNWA wrote:

What do you mean by "spending too much"? I think the difference lies in what you think is going first. I'm confident the 717 is right there with the oldest A320s and 752s as next to go. The economics of the 717 are subpar, and the unique engine and near orphan status cause me to believe it will be going sooner than most think. It's also the least capable performance-wise and is a separate pilot type. The A320s and 752s don't suffer from that combination.



I'm not sure we can say that it kept the CapEx down since DL spent a lot of money up front to acquire and refurbish the fleet. It was supposed to be a good long-term play, and that part didn't work.


DL learned their lesson with the D5 motors, and that's why the 715 was brought in house. The deal with RR was to support the 715 through 2030, so there is life left in that engine. The shop is just now getting going.

WN actually paid to have the DL interiors installed per the lease agreements, and they are still, to this day, subsidizing the lease payments on all of the subleased 717s. They were that desperate to get rid of them that they went to great lengths to get them off the property. It was pennies to acquire them.


WN paid for DL’s start-up costs, but denied it paid (or is paying) to subsidize the leases. Even if they did, the initial lease terms are now expiring (and will be through 2022), and if DL’s exercising the four year renewal option, no doubt WN isn’t paying a penny.

It was a sublease that transitioned to a direct lease old PR:
.News Release Issued: May 22, 2012 12:17 PM ET

Southwest Airlines, Delta Air Lines, And Boeing Capital Reach A Tentative Agreement To Sublease AirTran Boeing 717 Fleet

717s Would Depart the Southwest Fleet Beginning Mid-2013

DALLAS, May 22, 2012 /PRNewswire/ – Southwest Airlines (NYSE: LUV) confirmed today that the airline, together
with its subsidiary, AirTran Airways, Inc., has reached a tentative agreement with Delta Air Lines, Inc., and Boeing Capital Corp., to sublease all 88 of its Boeing 717 aircraft to Delta. A final agreement is subject to Delta and Southwest reaching certain agreements with all parties related to the aircraft leases. The tentative agreement between Southwest and Delta would transition the 717s over three years starting in the second half of 2013 with completion in 2015.

“This is a very complex transaction that requires time and close coordination with multiple parties. While we do have a tentative agreement with Delta, final details must be completed with all parties before a binding agreement between Delta and Southwest can be completed,” said Mike Van de Ven, Southwest Airlines’ Executive Vice President and Chief Operating Officer.

A transition of the 717s was an option that the airline acknowledged when it executed its fleet agreement with the Boeing Co. The plan calls for the transition of approximately three 717 aircraft per month beginning in mid-2013. Southwest is not releasing any additional details about the tentative agreement at this time. The Company currently plans to keep the total fleet count relatively flat as the 717s transition to Delta.


Sublease meant WN paid Boeing, DL paid WN less.
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Super80Fan
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Re: Delta looking into accelerating MD-90 retirement

Sun Apr 14, 2019 3:43 am

I am very confused by this discussion, Delta announced they are accelerating the retirement of the MD88/MD90. Did I miss where they said they are retiring the 717's? As far as I know, they have a few years left in them at the least and Delta isn't planning on getting rid of them over the next few years.
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william
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Re: Delta looking into accelerating MD-90 retirement

Sun Apr 14, 2019 4:50 am

88With all of the A321/A220 orders, was it enough to cover the MD88 fleet? Or are more orders expected?
 
ehaase
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Re: Delta looking into accelerating MD-90 retirement

Sun Apr 14, 2019 1:12 pm

Delta still has 7 739's, 100 321neos, and 51 321ceo's coming, not including the A220's and the 100 321neo options. I think Delta already has enough orders to replace the 79 MD88 and 37 MD90's in service, as well as the older 757's and 320's.
 
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Re: Delta looking into accelerating MD-90 retirement

Sun Apr 14, 2019 1:32 pm

Super80Fan wrote:
I am very confused by this discussion, Delta announced they are accelerating the retirement of the MD88/MD90. Did I miss where they said they are retiring the 717's? As far as I know, they have a few years left in them at the least and Delta isn't planning on getting rid of them over the next few years.

Everything in this thread is speculation, even the MD90 retirement discussion. While there was a comment from DL about a possible MD90 retirement date announcement soon there is nothing public yet. As for the 717 many of us feel the fleet's days are numbered once the MD88 and MD90's are gone. But again it is just speculation.
 
MIflyer12
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Re: Delta looking into accelerating MD-90 retirement

Sun Apr 14, 2019 1:39 pm

ehaase wrote:
Delta still has 7 739's, 100 321neos, and 51 321ceo's coming, not including the A220's and the 100 321neo options. I think Delta already has enough orders to replace the 79 MD88 and 37 MD90's in service, as well as the older 757's and 320's.


Do that math again, and add 2-3% annual seat growth in narrowbodies, which will still leave Delta losing share to WN, Spirit, and United. Delta does not have enough aircraft on order to replace everything a.netters want to be replaced within five years.

When I say 'spending too much' I mean inflating CapEx above trend, and above announced plan. It just keeps growing and growing. So far, free cash flow is still positive - but they've got a lot of old planes to replace in the coming decade. Again, look at individual frame age within fleet types and do the math. Lots of 320s and 757s will get parked within the next five years, not just MD-88s.
 
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Re: Delta looking into accelerating MD-90 retirement

Sun Apr 14, 2019 6:59 pm

MIflyer12 wrote:
ehaase wrote:
Delta still has 7 739's, 100 321neos, and 51 321ceo's coming, not including the A220's and the 100 321neo options. I think Delta already has enough orders to replace the 79 MD88 and 37 MD90's in service, as well as the older 757's and 320's.


Do that math again, and add 2-3% annual seat growth in narrowbodies, which will still leave Delta losing share to WN, Spirit, and United. Delta does not have enough aircraft on order to replace everything a.netters want to be replaced within five years.

When I say 'spending too much' I mean inflating CapEx above trend, and above announced plan. It just keeps growing and growing. So far, free cash flow is still positive - but they've got a lot of old planes to replace in the coming decade. Again, look at individual frame age within fleet types and do the math. Lots of 320s and 757s will get parked within the next five years, not just MD-88s.

MIflyer12,
Cash flow is important. So is opportunity. Now I've already noted my original time frame was too fast. Add one to four years.

MD-88s are retired next year. Due to not one airline paying support fees, DL was the last, parts and support are becoming more dear.

DL negotiated too low a price for prior V2500-D5 work. Because of that, most shops stopped supporting the engine. This spiked DL's engine maintenance costs on the MD-90. This adds about $175 to $200 per takeoff to the cost of opperating the MD-90. No speculation needed, DL has already retired 25 of 65 (only 40 opperating). They are noting reality I n there will be a planned retirement. MRO shops must be informed c-check work will end before it ends to plan the wind down of service.

Now there are common parts between all three. With 2 of 3 retiring, vendors are less likely to discount on parts. Suddenly certain parts cannot achieve minimum batch sizing for rebuilds (usually 25 parts or a fleet of 125 to 250 in active service) to do even one batch per year.

If there are enough used parts, no one cares. A rebuild that used to cost $2,400 for parts on the MD-80 is now $9,500. Since a rebuild is good for about 20,000 takeoffs, that is chump change. Until you realize how many parts now fit in this category.

DL retiring their fleets will take the Douglas seals out of production. This will add alone $50 per takeoff to costs on the 717. Tires and brakes will stay in production (whew, they are a killer when custom ordered). But this will add up increasing the cost per 717 takeoff by $150 to $300. Not bad, but why I speculate DL will retire.

The other is the new buy opportunity. Boeing must get a large MAX order at Paris. Boeing/Embraer must announce a large order at Paris. Airbus/Bombardier would do well with a large order at Paris and would discount to avoid the bad PR of DL ordering the E2-195.
This year makes or hurts 3 airframes:
If the A220 wins a large top off order from DL and LH, selling it will be far easier. Selling less than a hundred in 2019 destroys the sales momentum the built up last year.
If Embraer sells less than 150, they remain in sales purgatory.
If Boeing sells less than 300 MAX by end of Paris, they get to know a new level of sales purgatory.


So because of the opportunities, I speculate DL will place a large order at Paris. Funding is available. New aircraft will be cash flow positive day one. This is a business opportunity.

I rarely see opportunities as good as this for an airline. DL's ability to operate a new fleet type for less allows amazing negotiating power.

In prior years I advised DL would wait to order. This is the year they have been waiting for. Same for LH, UA, and others in the cash position to wait for a better offer. Ghad... I wish I could watch the leasing company suites at Paris this year.

So yes, I speculate the end of the 717.

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Re: Delta looking into accelerating MD-90 retirement

Sun Apr 14, 2019 10:38 pm

They're actually down to 37 MD-90s which is pretty shocking (if Planespotters.net is accurate). Of all the narrow body aircraft in the DL fleet, the MD-90 seems to be the smallest in quantity. Only aircraft smaller are the 777, A350, and A220. They are now down to 79 MD-88 as well.

I believe the MD-90s had unseen reliability issues after the 2nd hand purchases. They were also slated to get AVOD but couldn't pass FAA certifications, no idea why. I believe the engine type has been the biggest issue to maintain.
 
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compensateme
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Re: Delta looking into accelerating MD-90 retirement

Sun Apr 14, 2019 11:04 pm

MIflyer12 wrote:
ehaase wrote:
Delta still has 7 739's, 100 321neos, and 51 321ceo's coming, not including the A220's and the 100 321neo options. I think Delta already has enough orders to replace the 79 MD88 and 37 MD90's in service, as well as the older 757's and 320's.


Do that math again, and add 2-3% annual seat growth in narrowbodies, which will still leave Delta losing share to WN, Spirit, and United. Delta does not have enough aircraft on order to replace everything a.netters want to be replaced within five years.

When I say 'spending too much' I mean inflating CapEx above trend, and above announced plan. It just keeps growing and growing. So far, free cash flow is still positive - but they've got a lot of old planes to replace in the coming decade. Again, look at individual frame age within fleet types and do the math. Lots of 320s and 757s will get parked within the next five years, not just MD-88s.


Using a quick and dirty method (domestic narrowbodies only)... the difference between known orders and known retirements equates into a net equivalent of over 60 B757 joining the fleet within 4.5 years. In practice, the number will be much higher since utilization of the new frames will exceed those of the retired ones.

Obviously, DL isn’t growing that fast. The 50+ A320 and B757 that will be over 30yo are the most logical candidates for retirement, but I wouldn’t be surprised if DL exercised its 100 A321NEO options (perhaps as a mixture of 320/321 NEO), ordered additional A220 and/or added second-hand, late model 320/738 to the fleet and began returning the 717 to Boeing.

Remember... DL has about a 10-year gap where it (including NW) took delivery of few new domestic aircraft.
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Re: Delta looking into accelerating MD-90 retirement

Sun Apr 14, 2019 11:15 pm

lightsaber wrote:
compensateme wrote:
777Mech wrote:

DL learned their lesson with the D5 motors, and that's why the 715 was brought in house. The deal with RR was to support the 715 through 2030, so there is life left in that engine. The shop is just now getting going.

WN actually paid to have the DL interiors installed per the lease agreements, and they are still, to this day, subsidizing the lease payments on all of the subleased 717s. They were that desperate to get rid of them that they went to great lengths to get them off the property. It was pennies to acquire them.


WN paid for DL’s start-up costs, but denied it paid (or is paying) to subsidize the leases. Even if they did, the initial lease terms are now expiring (and will be through 2022), and if DL’s exercising the four year renewal option, no doubt WN isn’t paying a penny.

It was a sublease that transitioned to a direct lease old PR:
.News Release Issued: May 22, 2012 12:17 PM ET

Southwest Airlines, Delta Air Lines, And Boeing Capital Reach A Tentative Agreement To Sublease AirTran Boeing 717 Fleet

717s Would Depart the Southwest Fleet Beginning Mid-2013

DALLAS, May 22, 2012 /PRNewswire/ – Southwest Airlines (NYSE: LUV) confirmed today that the airline, together
with its subsidiary, AirTran Airways, Inc., has reached a tentative agreement with Delta Air Lines, Inc., and Boeing Capital Corp., to sublease all 88 of its Boeing 717 aircraft to Delta. A final agreement is subject to Delta and Southwest reaching certain agreements with all parties related to the aircraft leases. The tentative agreement between Southwest and Delta would transition the 717s over three years starting in the second half of 2013 with completion in 2015.

“This is a very complex transaction that requires time and close coordination with multiple parties. While we do have a tentative agreement with Delta, final details must be completed with all parties before a binding agreement between Delta and Southwest can be completed,” said Mike Van de Ven, Southwest Airlines’ Executive Vice President and Chief Operating Officer.

A transition of the 717s was an option that the airline acknowledged when it executed its fleet agreement with the Boeing Co. The plan calls for the transition of approximately three 717 aircraft per month beginning in mid-2013. Southwest is not releasing any additional details about the tentative agreement at this time. The Company currently plans to keep the total fleet count relatively flat as the 717s transition to Delta.


Sublease meant WN paid Boeing, DL paid WN less.


Unfortunately, DL didn’t release many details of the lease renewal, although I would suspect that they re-upped on the entire fleet and won’t began drawing them down until 2023.

Subleasing doesn’t mean that DL paid WN less than what WN was paying Boeing. In WN’s case, they spent a large amount of money up front to get DL to take the 717. Given that, their comments that DL is paying the same rate as they are seem reasonable.

In theory, when you sublease, you can pay the sublessor more, less or the same. In practice, it’s generally less, but that’s not always the case. For example, in Southern California, many leasees of commerical property have long-term agreements that were signed years ago and are well below market rate. It’s common for them to sublease for a profit or large upfront cash payment. For example, Walmart is subleasing - at a premium - a pair of former Sears Great Indoors.
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Re: Delta looking into accelerating MD-90 retirement

Mon Apr 15, 2019 12:11 am

There is only one shop in the entire world that overhauls the MD90 engine, it’s in Christchurch, NZ. DL has parked some 90s as they have limited resources at the shop to turn the engines fast.
 
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seabosdca
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Re: Delta looking into accelerating MD-90 retirement

Mon Apr 15, 2019 5:49 am

lightsaber wrote:
The other is the new buy opportunity. Boeing must get a large MAX order at Paris. Boeing/Embraer must announce a large order at Paris. Airbus/Bombardier would do well with a large order at Paris and would discount to avoid the bad PR of DL ordering the E2-195.
This year makes or hurts 3 airframes:
If the A220 wins a large top off order from DL and LH, selling it will be far easier. Selling less than a hundred in 2019 destroys the sales momentum the built up last year.
If Embraer sells less than 150, they remain in sales purgatory.
If Boeing sells less than 300 MAX by end of Paris, they get to know a new level of sales purgatory.


So because of the opportunities, I speculate DL will place a large order at Paris. Funding is available. New aircraft will be cash flow positive day one. This is a business opportunity.

I rarely see opportunities as good as this for an airline. DL's ability to operate a new fleet type for less allows amazing negotiating power.


I think an A220 follow-up at Paris is reasonably likely.

I don't think either Boeing or the airlines will want to finalize or announce major/newsworthy MAX orders until the MAX is flying again. (A small top-up would be different.) So I agree this is a good opportunity for DL to order 737 MAX 8 as direct replacements for early A320s and MD-90s. But I doubt it will become public at Paris.
 
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Re: Delta looking into accelerating MD-90 retirement

Mon Apr 15, 2019 1:46 pm

Don’t know how reliable this source is since no real dates are given but here is something:

https://airlinerwatch.com/delta-air-lin ... las-fleet/
 
PSU.DTW.SCE
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Re: Delta looking into accelerating MD-90 retirement

Mon Apr 15, 2019 2:06 pm

That article is based on the exact one line statement from the earnings call that led to this ongoing three page thread. There is zero of anything else contained in the link or any further insight provided.
 
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Re: Delta looking into accelerating MD-90 retirement

Mon Apr 15, 2019 2:55 pm

Boof02671 wrote:
There is only one shop in the entire world that overhauls the MD90 engine, it’s in Christchurch, NZ. DL has parked some 90s as they have limited resources at the shop to turn the engines fast.


Let me ask a clarifying question... is it the only shop in the world that services the V2500, or the MD-90 subset (V2525/2528-D5)?

I'm no engineer, but with hundreds of examples of V2500 flying around on A32X series, you'd think maintenance would be a little more economical (unless the MD-90 subset is so specific?).
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Boof02671
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Re: Delta looking into accelerating MD-90 retirement

Mon Apr 15, 2019 3:00 pm

Only the subset for the for the MD90
 
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compensateme
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Re: Delta looking into accelerating MD-90 retirement

Tue Apr 16, 2019 1:44 am

seabosdca wrote:
lightsaber wrote:
The other is the new buy opportunity. Boeing must get a large MAX order at Paris. Boeing/Embraer must announce a large order at Paris. Airbus/Bombardier would do well with a large order at Paris and would discount to avoid the bad PR of DL ordering the E2-195.
This year makes or hurts 3 airframes:
If the A220 wins a large top off order from DL and LH, selling it will be far easier. Selling less than a hundred in 2019 destroys the sales momentum the built up last year.
If Embraer sells less than 150, they remain in sales purgatory.
If Boeing sells less than 300 MAX by end of Paris, they get to know a new level of sales purgatory.


So because of the opportunities, I speculate DL will place a large order at Paris. Funding is available. New aircraft will be cash flow positive day one. This is a business opportunity.

I rarely see opportunities as good as this for an airline. DL's ability to operate a new fleet type for less allows amazing negotiating power.


I think an A220 follow-up at Paris is reasonably likely.

I don't think either Boeing or the airlines will want to finalize or announce major/newsworthy MAX orders until the MAX is flying again. (A small top-up would be different.) So I agree this is a good opportunity for DL to order 737 MAX 8 as direct replacements for early A320s and MD-90s. But I doubt it will become public at Paris.


DL already ordered 15 A220-300, and converted 35 A220-100 to -300; these will likely serve as the de facto M90/early build 320 replacements. Credible sources indicate that will convert its remaining 35 A220-300 options and is working with Airbus on delivery dates. Alas, I wouldn’t look for a Max order anytime soon...
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Re: Delta looking into accelerating MD-90 retirement

Tue Apr 16, 2019 3:34 am

I am not an expert on aircraft leases but I am sure Delta has written into any lease extensions on the 717s language that allows Delta to reject or modify any lease extensions as Delta sees fit. This includes outright cancelation, transferring any 717s to Hawaiian and Qantas-link at a then current market rate which is all that Boeing would receive. Others could be bought by Delta for as little as one dollar and become parts or donor aircraft which Delta would use to continue operating on short routes as spare aircraft to replace other out of service aircraft. The 717 has little or no market value and Boeing is stuck with taking a write down if Delta no longer has any need for them. Delta did NOT make a mistake in leasing the 717s from Southwest and ultimately Boeing. Boeing mad a mistake in leasing the 717s to AirTrans and now the consequences are going to come home to Boeing to roost.
Hawaiian is the only airline currently dependent on the 717 as they operate their aircraft on short routes with quick turn arounds. It is now really the only jet aircraft that at can operate the quick turn arounds. Hawaiian is going to need to operate the 717s until their is an aircraft available to operate under these conditions or they will need to acquire more 717s so that the aircraft can be spread out more between flights and reduce the the hours and cycles on them. Hawaiian has two other options which include obtaining jet aircraft in a number that they can sit on the ground longer to cool down and have another jet to replace the freshly landed aircraft. Their other option is to obtain turboprop aircraft that can fly under these conditions. :old:
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Re: Delta looking into accelerating MD-90 retirement

Tue Apr 16, 2019 4:03 am

MSPNWA wrote:
PSU.DTW.SCE wrote:
Yes but look at many of the routes the 717 is now flying.
Stuff like DTW-BUF, ALB, ORD, TVC, MSN.

ATL-CHA, MEM, etc.

None of that stuff commands the “superior economics” because of the extremely short stage lengths.


That's what the CR9, E75, A220, A319, A320, 738, etc. are for.

DL isn't going to ground a new A220 or A321 just so a 717 can fly DTW-BUF once a day. Fleet age/replacement timeline is the defining reason why the 717's days are likely short. It's already playing out with the MD-88/90. The least economical planes will go first. The 717 is low on the efficiency list.


I agree with PSU.DTW.SCE, and think that there is a false equivalence in this thread between the 717 and the MD-90. Delta makes a killing on very short haul domestic, and the 717 is optimized for that type of flying. The sheer number of very short routes opens up a space for a rugged airplane to fill the niche - which the 717 is doing. The MD-90 was doing generic medium haul that any other type could do. Although the 717 has done some longer stage length flying (LGA-Florida in the shoulder seasons, or the western operation out of the LAX pilot base), the fleet is being re-focused on the short haul niche. With the BR715 overhauls coming in house, I think the 717 is going to last quite a bit longer.
 
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Re: Delta looking into accelerating MD-90 retirement

Tue Apr 16, 2019 4:09 am

compensateme wrote:
seabosdca wrote:
lightsaber wrote:
The other is the new buy opportunity. Boeing must get a large MAX order at Paris. Boeing/Embraer must announce a large order at Paris. Airbus/Bombardier would do well with a large order at Paris and would discount to avoid the bad PR of DL ordering the E2-195.
This year makes or hurts 3 airframes:
If the A220 wins a large top off order from DL and LH, selling it will be far easier. Selling less than a hundred in 2019 destroys the sales momentum the built up last year.
If Embraer sells less than 150, they remain in sales purgatory.
If Boeing sells less than 300 MAX by end of Paris, they get to know a new level of sales purgatory.


So because of the opportunities, I speculate DL will place a large order at Paris. Funding is available. New aircraft will be cash flow positive day one. This is a business opportunity.

I rarely see opportunities as good as this for an airline. DL's ability to operate a new fleet type for less allows amazing negotiating power.


I think an A220 follow-up at Paris is reasonably likely.

I don't think either Boeing or the airlines will want to finalize or announce major/newsworthy MAX orders until the MAX is flying again. (A small top-up would be different.) So I agree this is a good opportunity for DL to order 737 MAX 8 as direct replacements for early A320s and MD-90s. But I doubt it will become public at Paris.


DL already ordered 15 A220-300, and converted 35 A220-100 to -300; these will likely serve as the de facto M90/early build 320 replacements. Credible sources indicate that will convert its remaining 35 A220-300 options and is working with Airbus on delivery dates. Alas, I wouldn’t look for a Max order anytime soon...


Those previously announced +15 A223s are new orders, not exercised options. There's still 50 A221 options on the books.
 
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Re: Delta looking into accelerating MD-90 retirement

Tue Apr 16, 2019 4:15 am

FWIW, here's a day in the life of the 717 I flew on earlier today N935AT

SYR-DTW
DTW-MSP
MSP-DTW
DTW-CLT
CLT-MSP
MSP-YYC
 
Boof02671
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Re: Delta looking into accelerating MD-90 retirement

Tue Apr 16, 2019 5:37 am

NWAROOSTER wrote:
I am not an expert on aircraft leases but I am sure Delta has written into any lease extensions on the 717s language that allows Delta to reject or modify any lease extensions as Delta sees fit. This includes outright cancelation, transferring any 717s to Hawaiian and Qantas-link at a then current market rate which is all that Boeing would receive. Others could be bought by Delta for as little as one dollar and become parts or donor aircraft which Delta would use to continue operating on short routes as spare aircraft to replace other out of service aircraft. The 717 has little or no market value and Boeing is stuck with taking a write down if Delta no longer has any need for them. Delta did NOT make a mistake in leasing the 717s from Southwest and ultimately Boeing. Boeing mad a mistake in leasing the 717s to AirTrans and now the consequences are going to come home to Boeing to roost.
Hawaiian is the only airline currently dependent on the 717 as they operate their aircraft on short routes with quick turn arounds. It is now really the only jet aircraft that at can operate the quick turn arounds. Hawaiian is going to need to operate the 717s until their is an aircraft available to operate under these conditions or they will need to acquire more 717s so that the aircraft can be spread out more between flights and reduce the the hours and cycles on them. Hawaiian has two other options which include obtaining jet aircraft in a number that they can sit on the ground longer to cool down and have another jet to replace the freshly landed aircraft. Their other option is to obtain turboprop aircraft that can fly under these conditions. :old:

I seriously doubt any aircraft lease lets Delta do as they please. Boeing would be stupid to do that.
 
md83ftw
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Re: Delta looking into accelerating MD-90 retirement

Tue Apr 16, 2019 7:35 am

jagraham wrote:
md83ftw wrote:
lightsaber wrote:

What interests me is how quietly DL went from 65 MD-90 to 40. The engine MRO costs on the V2500D5 are certainly driving the decision.


I wasn't even aware they were winding down the fleet, such a shame to see these beautiful arrows go. I'm genuinely surprised, only a few years ago Delta's MD90 costs were comparable to their A320 fleet and lower than the 738s, see this (brilliant) US airline operating costs post from LAXintl in 2014:

LAXintl wrote:
For reference, the reported total block hour cost includes things like - aircraft ownership(lease/mortgage/financing), crew, insurance, taxes, direct maintenance, and long term maintenance accrual burdens(eg power by hour contracts).

LAXintl wrote:
Legend = Total block Hour Cost USD / Burn per hour gallons / Average stage length / CASM

- A320: DL - $4692 / 757 / 893 / 8.6

- 737-800: DL - $4879 / 794 / 1301 / 7.6

- MD-90: DL - $4690 / 778 / 771 / 8.3


Granted, the 90s were flying shorter stage lengths, but were nevertheless highly competitive it seems!


Are there similar numbers for the 739s and A321s?


Unfortunately the DL 739 fleet had only just started operations when this post was created and there was no oeprational data available, likewise they were yet to recieve an A321. I've copied across the details from the thread mentioned above, in order of CASM:

Legend = Total block Hour Cost USD / Burn per hour gallons / Average stage length / CASM
DL A319 - $5292 / 683 / 755 / 12.2 (VIP fleet probably skews this)
DL 73G - $4356 / 646 / 1003 / 9.4
DL A320 - $4692 / 757 / 893 / 8.6
DL MD90 - $4690 / 778 / 771 / 8.3
DL 752 - $5478 / 1003 / 1236 / 7.7
DL 738 - $4879 / 794 / 1301 / 7.6
DL 753 - $5891 / 1131 / 1301 / 6.5

Its not hard to fathom a DL A321/B739 being considerably more efficient than the MD90 fleet when compared by CASM. Alaska and United, for whom there is data at the time, both had the lowest narrowbody CASM on their B739 fleets, United by some margin. The only A321 operator where data is available for at the time, US Airways, likewise found the lowest CASM on this fleet type:

LAXintl wrote:
Alaska
B739 - 6.1
B738 - 6.2
B73G - 9.4
B734 - 10.7

American
B738 - 7.9
B752 - 7.9
B763 - 8.1
MD80 - 9.1
B772 - 9.2
B762 - 9.8

Delta
A333 - 6.3
B753 - 6.5
A332 - 7.4
B764 - 7.4
B744 - 7.5
B738 - 7.6
B752 - 7.7
B763 - 7.8
MD90 - 8.3
B772 - 8.3
A320 - 8.6
B73G - 9.4
MD80 - 10.0
A319 - 12.2
DC95 - 14.0

JetBlue
A320 - 7.0
E190 - 12.0

Southwest
B738 - 6.7
B73G - 7.9
B733 - 9.1
B735 - 12.3

US Airways
A321 - 6.1
A332 - 6.7
B752 - 7.5
A320 - 8.0
B762 - 8.7
B734 - 9.4
A319 - 10.4
E190 - 12.7
A333 - data missing

United
B739 - 6.5
B753 - 6.9
B764 - 7.0
B738 - 7.4
B772 - 8.0
B744 - 8.2
B752 - 8.5
A320 - 8.8
B763 - 9.0
B73G - 9.1
A319 - data missing
 
bennett123
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Re: Delta looking into accelerating MD-90 retirement

Tue Apr 16, 2019 8:23 am

LAX

What date are those figures.

735 at WN
DC95 at DL

As for US Airlines which ended in 2015, and I believe the 734 at about the same time.
 
jagraham
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Re: Delta looking into accelerating MD-90 retirement

Tue Apr 16, 2019 2:56 pm

md83ftw wrote:
jagraham wrote:
md83ftw wrote:

I wasn't even aware they were winding down the fleet, such a shame to see these beautiful arrows go. I'm genuinely surprised, only a few years ago Delta's MD90 costs were comparable to their A320 fleet and lower than the 738s, see this (brilliant) US airline operating costs post from LAXintl in 2014:




Granted, the 90s were flying shorter stage lengths, but were nevertheless highly competitive it seems!


Are there similar numbers for the 739s and A321s?


Unfortunately the DL 739 fleet had only just started operations when this post was created and there was no oeprational data available, likewise they were yet to recieve an A321. I've copied across the details from the thread mentioned above, in order of CASM:

Legend = Total block Hour Cost USD / Burn per hour gallons / Average stage length / CASM
DL A319 - $5292 / 683 / 755 / 12.2 (VIP fleet probably skews this)
DL 73G - $4356 / 646 / 1003 / 9.4
DL A320 - $4692 / 757 / 893 / 8.6
DL MD90 - $4690 / 778 / 771 / 8.3
DL 752 - $5478 / 1003 / 1236 / 7.7
DL 738 - $4879 / 794 / 1301 / 7.6
DL 753 - $5891 / 1131 / 1301 / 6.5

Its not hard to fathom a DL A321/B739 being considerably more efficient than the MD90 fleet when compared by CASM. Alaska and United, for whom there is data at the time, both had the lowest narrowbody CASM on their B739 fleets, United by some margin. The only A321 operator where data is available for at the time, US Airways, likewise found the lowest CASM on this fleet type:

LAXintl wrote:
Alaska
B739 - 6.1
B738 - 6.2
B73G - 9.4
B734 - 10.7

American
B738 - 7.9
B752 - 7.9
B763 - 8.1
MD80 - 9.1
B772 - 9.2
B762 - 9.8

Delta
A333 - 6.3
B753 - 6.5
A332 - 7.4
B764 - 7.4
B744 - 7.5
B738 - 7.6
B752 - 7.7
B763 - 7.8
MD90 - 8.3
B772 - 8.3
A320 - 8.6
B73G - 9.4
MD80 - 10.0
A319 - 12.2
DC95 - 14.0

JetBlue
A320 - 7.0
E190 - 12.0

Southwest
B738 - 6.7
B73G - 7.9
B733 - 9.1
B735 - 12.3

US Airways
A321 - 6.1
A332 - 6.7
B752 - 7.5
A320 - 8.0
B762 - 8.7
B734 - 9.4
A319 - 10.4
E190 - 12.7
A333 - data missing

United
B739 - 6.5
B753 - 6.9
B764 - 7.0
B738 - 7.4
B772 - 8.0
B744 - 8.2
B752 - 8.5
A320 - 8.8
B763 - 9.0
B73G - 9.1
A319 - data missing


In general the newer planes are more cost effective over the long run. But there are exceptions. Delta had figured out that the MD90 and even MD80 were quite close to newer Boeing and Airbus planes on stages less than 2 hours - apparently the fuel efficiency improvement in cruise does not translate to takeoff, and so little fuel is used on approach that it does not matter. So stage length is important and a good planning department can use MD80s and MD90s without a significant cost penalty.

The other exception is the number of seats - more seats has a significant effect on CASM. Your data for United lumps the 772s together, but in fact the 772As with 365 seats (and lower thrust engines) is the next to lowest CASM plane at 4.7 cents (lowest CASM is 77W domestic at 4.3, but 77W on Pac routes is 5.1) viewtopic.php?f=3&t=1382491&start=1400#p20570747

So how far the plane flies and how many seats are crammed in are big factors for CASM. Of course there is RASM, the corporate contracts, and what is necessary to entice high yield fliers . .
 
User avatar
NWAROOSTER
Posts: 1223
Joined: Mon Feb 14, 2005 2:29 pm

Re: Delta looking into accelerating MD-90 retirement

Tue Apr 16, 2019 5:34 pm

Boof02671 wrote:
NWAROOSTER wrote:
I am not an expert on aircraft leases but I am sure Delta has written into any lease extensions on the 717s language that allows Delta to reject or modify any lease extensions as Delta sees fit. This includes outright cancelation, transferring any 717s to Hawaiian and Qantas-link at a then current market rate which is all that Boeing would receive. Others could be bought by Delta for as little as one dollar and become parts or donor aircraft which Delta would use to continue operating on short routes as spare aircraft to replace other out of service aircraft. The 717 has little or no market value and Boeing is stuck with taking a write down if Delta no longer has any need for them. Delta did NOT make a mistake in leasing the 717s from Southwest and ultimately Boeing. Boeing mad a mistake in leasing the 717s to AirTrans and now the consequences are going to come home to Boeing to roost.
Hawaiian is the only airline currently dependent on the 717 as they operate their aircraft on short routes with quick turn arounds. It is now really the only jet aircraft that at can operate the quick turn arounds. Hawaiian is going to need to operate the 717s until their is an aircraft available to operate under these conditions or they will need to acquire more 717s so that the aircraft can be spread out more between flights and reduce the the hours and cycles on them. Hawaiian has two other options which include obtaining jet aircraft in a number that they can sit on the ground longer to cool down and have another jet to replace the freshly landed aircraft. Their other option is to obtain turboprop aircraft that can fly under these conditions. :old:

I seriously doubt any aircraft lease lets Delta do as they please. Boeing would be stupid to do that.

Airlines are NOT beating Boeing's doors down wanting 717s. Thus Delta may have great leverage in continuing leasing 717s from Boeing in any new leases. :old:
Procrastination Is The Theft Of Time.......
 
Boof02671
Posts: 1626
Joined: Sun Jul 10, 2016 12:15 am

Re: Delta looking into accelerating MD-90 retirement

Tue Apr 16, 2019 5:39 pm

NWAROOSTER wrote:
Boof02671 wrote:
NWAROOSTER wrote:
I am not an expert on aircraft leases but I am sure Delta has written into any lease extensions on the 717s language that allows Delta to reject or modify any lease extensions as Delta sees fit. This includes outright cancelation, transferring any 717s to Hawaiian and Qantas-link at a then current market rate which is all that Boeing would receive. Others could be bought by Delta for as little as one dollar and become parts or donor aircraft which Delta would use to continue operating on short routes as spare aircraft to replace other out of service aircraft. The 717 has little or no market value and Boeing is stuck with taking a write down if Delta no longer has any need for them. Delta did NOT make a mistake in leasing the 717s from Southwest and ultimately Boeing. Boeing mad a mistake in leasing the 717s to AirTrans and now the consequences are going to come home to Boeing to roost.
Hawaiian is the only airline currently dependent on the 717 as they operate their aircraft on short routes with quick turn arounds. It is now really the only jet aircraft that at can operate the quick turn arounds. Hawaiian is going to need to operate the 717s until their is an aircraft available to operate under these conditions or they will need to acquire more 717s so that the aircraft can be spread out more between flights and reduce the the hours and cycles on them. Hawaiian has two other options which include obtaining jet aircraft in a number that they can sit on the ground longer to cool down and have another jet to replace the freshly landed aircraft. Their other option is to obtain turboprop aircraft that can fly under these conditions. :old:

I seriously doubt any aircraft lease lets Delta do as they please. Boeing would be stupid to do that.

Airlines are NOT beating Boeing's doors down wanting 717s. Thus Delta may have great leverage in continuing leasing 717s from Boeing in any new leases. :old:

Ever think that’s because they’ve been out of production for years? Lol

Also Boeing Capital Corp was under no obligation to agree to the sublease as WN was on the hook for the leases.
 
jbs2886
Posts: 2125
Joined: Wed Apr 01, 2015 9:07 pm

Re: Delta looking into accelerating MD-90 retirement

Tue Apr 16, 2019 5:51 pm

NWAROOSTER wrote:
Boof02671 wrote:
NWAROOSTER wrote:
I am not an expert on aircraft leases but I am sure Delta has written into any lease extensions on the 717s language that allows Delta to reject or modify any lease extensions as Delta sees fit. This includes outright cancelation, transferring any 717s to Hawaiian and Qantas-link at a then current market rate which is all that Boeing would receive. Others could be bought by Delta for as little as one dollar and become parts or donor aircraft which Delta would use to continue operating on short routes as spare aircraft to replace other out of service aircraft. The 717 has little or no market value and Boeing is stuck with taking a write down if Delta no longer has any need for them. Delta did NOT make a mistake in leasing the 717s from Southwest and ultimately Boeing. Boeing mad a mistake in leasing the 717s to AirTrans and now the consequences are going to come home to Boeing to roost.
Hawaiian is the only airline currently dependent on the 717 as they operate their aircraft on short routes with quick turn arounds. It is now really the only jet aircraft that at can operate the quick turn arounds. Hawaiian is going to need to operate the 717s until their is an aircraft available to operate under these conditions or they will need to acquire more 717s so that the aircraft can be spread out more between flights and reduce the the hours and cycles on them. Hawaiian has two other options which include obtaining jet aircraft in a number that they can sit on the ground longer to cool down and have another jet to replace the freshly landed aircraft. Their other option is to obtain turboprop aircraft that can fly under these conditions. :old:

I seriously doubt any aircraft lease lets Delta do as they please. Boeing would be stupid to do that.

Airlines are NOT beating Boeing's doors down wanting 717s. Thus Delta may have great leverage in continuing leasing 717s from Boeing in any new leases. :old:


Yes, but your comment is to what is best business-wise for Boeing. Boof's comment was to the contractual agreement. Very different.

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