Alongside its second-quarter earnings results, Delta Air Lines announced that it would be pursuing the retirement of some aircraft. This comes as the airline posted a massive loss and continues to chart a path forward. Unfortunately, however, it will lead to the airline becoming smaller by about 100 aircraft compared to pre-crisis levels and potentially lead to significant cuts in the airline’s route network.
The aircraft retirements
Delta Air Lines is retiring aircraft. Already, the MD-88 and MD-90s have exited the carrier’s fleet. Coming up will be the Boeing 777s and 737-700s– a new addition to the list. In addition, a few smaller numbers of Boeing 767-300ERS and Airbus A320 aircraft will also be retired this year. Not the entire fleets, just portions of those fleets.
The MDs were aging and fuel inefficient. From a passenger perspective, the experience was not great since those planes lacked modern amenities like seatback entertainment and power outlets. Those planes were already on Delta’s radar to retire. The retirements were just accelerated due to the downturn in travel.
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Delta only has 18 Boeing 777s. With the final flights slated this fall, this will streamline Delta’s long-haul widebody fleet and remove a small but significant inefficiency in the carrier’s network. Although, the $100 million retrofits of those aircraft is now money down the drain.
The Boeing 737-700s
The 737-700s are also interesting. Delta has ten 737-700s in its fleet– all of them owned. These planes were outfitted with 12 seats in first class, 18 in Comfort+, and 94 in standard economy. All seats have access to seatback entertainment and USB power. Only first class passengers receive AC power outlets.
This plane is comparable to the Airbus A319s– although those aircraft are a little larger in terms of passenger capacity. It also sits between the smaller A220s and 717s and larger 737s and A320s. The 737-700s were big on some transborder flights to Mexico. Other than that, it was pretty rare to find a 737-700 flying for Delta. These planes are an average of just over 11 years old.
Looking ahead, Delta will be taking on over 60 A220s and 120 A321ceos and A321neos. Those planes could easily take over that lost capacity– especially the A220-300s. The first of those A220-300s has already made its maiden flight in Alabama.
Replacing those aircraft will not be a challenging endeavor and should not materially impact Delta’s route network. However, it will allow the carrier to streamline its fleet operationally.
Delta has 56 767-300ERS. These planes are an average of just under 24 years old– meaning they’re getting ready to head for retirement as they are some of the oldest in operation. The carrier stated that it is expecting international travel demand to lag domestic in terms of a rebound, which means Delta will not need as many 767s as it currently has. Down the line, incoming Airbus A330-900neos could take over some of those routes as demand starts to grow.
Onboard, the 767s offer a dated product, but an excellent experience in coach thanks to the comfortable 2-3-2 layout– meaning fewer middle seats. The airline has loved all of its 767s and placed them on a large number of services, including long-haul international to destinations like Amsterdam and Buenos Aires to domestic transcontinental between New York-JFK and Los Angeles to hops down to South America such as between Atlanta and Bogota.
Given how slowly international travel demand is returning, owing in large part due to closed borders and limited appetite for long-haul travel, early retirement of the 767s would not materially impact Delta’s route network for now. Essentially, where Delta currently does not want to fly because of reduced demand is where the 767s are flying.
The Airbus A320s
Delta inherited the A320s from its merger with Northwest Airlines. The A320s are an average of over 24 years old– making them the oldest remaining fleet type in Delta’s fleet. Some of those aircraft are among the oldest A320s in passenger service.
Those planes would easily be retired and help the carrier reduce operating costs. Replacing those jets would be some A220s and A321s.
While these retirements would not materially impact Delta’s domestic mainline route network, the regional system is a different story. After the airline emerges smaller, the mainline, to comply with scope clauses, will have to reduce some of its regional network as it rebuilds. This is because agreements with pilots limit Delta’s ability to contract out small flying.
For regional destinations that Delta has already suspended service to, this could mean a considerable reduction in flying on Delta’s part.
As for when the route network will come back, Delta has historically been cautious about opening new routes. With Ed Bastian stating on the second-quarter earnings call that the airline is “taking the industry’s most conservative approach to capacity,” it is highly unlikely that Delta rebuilds its route network until 2023.
Of course, much of this will become more evident in the next year. It will depend on market recovery. But, given the current trajectory, it is looking like a rough road for the airline’s regional network.
Do you think Delta will reduce its regional network? Are you going to be sad to see some of these aircraft go? Let us know in the comments!