Lease Expiration Offers GOL An Easy Way To Cut Fleet Size

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GOL Linhas Aereas, the Brazilian carrier, could reduce its fleet from 130 Boeing 737 planes to 100. The airline would take this approach to ease the impact it is currently having due to the coronavirus pandemic, Reuters reported. Let’s investigate further.

Avión GOL 4
GOL could reduce its fleet to 100 airplanes. Photo: GOL Linhas Aereas

How would GOL reduce its fleet?

The Brazilian carrier has the opportunity to reduce its fleet by letting leases expire. Currently, GOL is only flying 50 flights a day with a fleet of just 10 aircraft. The expectation right now is that GOL will keep the majority of its fleet on the ground during April and May.

Also, GOL has a grounded fleet of Boeing 737 MAX airplanes. The original idea of the airline was to substitute its older Boeing 737 NG with the newer MAX. But, since Boeing hasn’t been able to recertificate the MAX yet, the Brazilian carrier has had to keep the older airplanes in its fleet.

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Usually, the lease terms for commercial airlines depend on the type of aircraft they will be flying. For example, the lease term for a narrowbody goes from eight to 12 years, and for widebodies is usually up to 12 years.

Currently, GOL has 29 Boeing 737 NG airplanes that were delivered at least 12 years ago, according to Planespotters.com.

Foto avión GOL
Over 25 GOL airplanes have been in the fleet for 12 years or more. Photo: GOL Linhas Aereas.

Does it really work to reduce one’s fleet?

Worldwide, airlines are currently reducing the number of fleets. This is done in several ways. Some will defer the arrival of new airplanes. Others are accelerating the retirement of older units, while there are some that are parking its airplanes with the intention of using them in the future.

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René Armas Maes, a Canadian airline consultor told us recently,

“The economy is getting slower. There are a lot of factors that are currently unknown for the airlines and can’t control them. We don’t know how the demand will behave and if it doesn’t grow, it is better to reduce the size of an airline.”

It is also a good idea to use this smaller fleet to develop the domestic market. The reason being that national markets are more manageable by airlines. We are already seeing something like that happening in GOL. The Brazilian carrier stopped entirely flying internationally but maintained a skeleton operation within its borders, with a lot of help from the government.

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Interjet
Several airlines are planning on reducing their fleets. Photo: Daniel Martínez Garbuno/Simple Flying.

Which other airlines are doing it?

There are several airlines worldwide that are currently reducing their fleets. Let’s take a look at some of them.

Interjet, in Mexico, is currently struggling. For example, according to recent reports, up to ten leasing companies are taking away its Airbus fleet. The Mexican airline says it is happy with these repossessions as the contracts had conditions “outside of the current market”. It also added that it is better for the airline to have fewer airplanes at the moment.

Lufthansa decided yesterday to decommission immediately 32 of its aircraft. This included six A380, seven A340-600, three A340-300s, five 747-400s, and 11 A320s. Eurowings will also lose up to ten A320 family airplanes.

American Airlines will phase out its 757 fleet. United has been reported to follow its rival footsteps.

Do you think airlines will quickly recover the number of aircraft in their fleets? Let us know in the comments.

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