I hope many 15year old planes will be retired in the coming months, so new production has to be cut less.
The existing fleet and bow wave of MAX deliveries are an issue.
Ironically, MAX airlines are better off not having the MAX.
But in a low fuel price environment, asking for mid age aircraft to be retired is wishful thinking. Spot price of is fuel $.44 today.https://www.airlines.org/argus-us-jet-fuel-index/
Normal us $1.25 to $2.25 and it has gone higher. last week it was $.71. In fiscal 2019, JetBlue used 885 million gallons at $2.09/gallon or $1.85 billion USD. https://www.statista.com/statistics/528 ... e-airways/
Wikipedia says JetBlue has 264 aircraft or avwrage $7 million in fuel/year. A NEO saves about 20% or then $1.4 million a year for a high utilization airline per Aircraft.
At $0.44, each aircraft, if flown the same, burns $1.5 million (rounded up). A NEO will only save $300k a year, at best.
Resale on that 15 year old aircraft has plummeted (supply/demand). Looking at pre-Covid19 lease rates, A320NEO $295,000 to $350,000 per month. An A320 is $65,000 to $320,000 (new). Or I would estimate a 15 year old A320 leases for $1.8 million less a year, probably has a million more in maintenance and $300,000 or less more in fuel or now costs about a half million less per year. viewtopic.php?f=3&t=1440991
With 30% of the fleet to be parked, I expect lease returns to be brutal.
If 15 year old aircraft are to be offered at scrap, I expect A320/A321 to become freighters or held for future sale. The already at scrap value A319s are doomed and will drive down scrap values (Obviously Easyjet will stop extending leases).
A flood of good mid age aircraft is going to unravel the leasing marketplace. That will hurt new aircraft sales quite a bit.
The reality is new aircraft demand is stalled. The loans on mid age aircraft cannot be unwound down to next month's scrap value quickly.
To change back the math, fuel must get above $1.25/gallon for break even on the NEO vs. a 15+ year old CEO. The surplus of aircraft must be dried up too (I estimate in 2023.)
I didn't estimate reduced CEO maintenance costs due to the upcoming scrapping, but that will happen. So maybe fuel must raise above $1.50... Unfortunately, the trend isn't the friend of new build demand.
I say this as someone working aerospace R&D. My services won't be in demand for commercial aircraft.
Winter is coming.