The Curbing Cars Newsletter, 5/10/2020

The future of transportation and its intersection with the environment.

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The Future Of Fleets: Why Your Favorite Plane May Never Fly Again

The steep drop in flights and passengers due to COVID-19 has prompted airlines to park their unneeded planes. I found these Spirit jets at Willow Run Airport outside Ypsilanti, Mich., known to avgeeks as YIP.

Willow Run has special meaning for me because my father worked there for several years, before American Airlines opened its operations at Detroit Metropolitan Airport, or DTW.

It remains one of the country’s busiest cargo airports, although things have been much quieter there lately, as I discovered when I made a loop of the air field last week.

This group of 10 Spirit planes is just a fraction of the number that are in storage all over the country. And, as it turns out, some of those aircraft may not come back into service.

Our friend Marc Stewart, the business journalist and contributor to ABC News, took a look at the unexpected opportunity that COVID-19 is presenting to the airlines. Here’s his report.

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By Marc Stewart

While the thought of hopping on a jet seems far-fetched for most of us, airlines around the globe are making swift decisions that will dictate their fiscal fate in this new pandemic world.

As airlines ponder layoffs and discontinuing routes, executives are reviewing the effectiveness of the aircraft in their fleets.

Just like an automobile, airplanes vary on fuel efficiency. Newer models such as the Boeing 787, 737 Max and new versions of the Airbus A320 and A321 require less fuel.

For instance, JetBlue Airways, which has begun flying the A320neo (neo stands for “new engine option”) says the plane achieves 20 percent better fuel economy than the previous A320.

Meanwhile, Spirit just took delivery of six Airbus A320neo in the first quarter.

Fuel demand in a steep descent

For the moment, airlines are benefiting from record low fuel prices. The problem is that they can’t really leverage them. Demand has plummeted from the recent highs in December 2017. Still, fuel-efficient planes themselves are important in running a cost-effective operation.

“Ownership costs of newer models will be higher, but operational costs should be lower due to better reliability (less shop visits) and the maintenance expense holiday typical in the first ~five years,” says Savanthi Syth, an analyst at Raymond James and Associates.  “As fuel prices rise, the fuel efficiency benefits should help as well.”

Retirements of many workhouse planes have now been accelerated, as companies try to maximize every dollar spent and establish a fleet for the future.

“There are many important factors in the equation including the airline's fleet mix, size, business model, region of service, percentage of lease/own, average aircraft age, cash, etc,” said Ahmed Abdelghany, a professor at Embry-Riddle Aeronautical University.

Waving buh-bye to some familiar aircraft

Among some of the most notable moves:

Virgin Atlantic is retiring its aging fleet of seven Boeing 747-400 aircraft. Often called The Queen of The Skies, the iconic jet utilizes four engines, compared with newer long-haul aircraft which can operate trans-oceanic routes using just two engines, typically at a lower cost.

American Airlines has removed the Embraer E190 (flying domestic routes) and the Boeing 767 (typically flying international) from its fleet. It’s also speeding up the retirement of the Boeing 757 and the Airbus a330-300. PSA Airlines, a regional carrier, is retiring CRJ-200 regional jets.

Delta Air Lines has taken the MD-88 and MD-90 from the its flight schedules.  “Delta continues to evaluate its broader fleet plan and will consider additional aircraft retirements to focus on a modern, more simplified fleet going forward,” according to a company statement.

Lufthansa announced on April 16 that it’s grounding its fleet of Airbus A340-600 jets.  The fate of the four-engine aircraft will be determined later, the company noted.

Even though many of these aircraft were slated for retirement anyways, the pandemic has sped up that process.

Narrow bodies are in fashion once more

While the fate of many future orders remains in limbo, single-aisle, twin-engine jets appear to be symbol of the future, even on some longer routes.

“With domestic travel likely to recovery faster than international, narrowbody aircraft like the MAX and A321 are likely going to continue to have a greater appeal,” said Syth.

“Moreover, the benefits of up-gauging is likely to be still intact longer term, although in the very near term lower trip costs might be an advantage while load factors are low.”

Some stories worth your time

Amtrak’s Acela will return. Amtrak plans a June 1 return for its Acela high-speed trains, or should we say, supposedly high-speed trains (if you’ve ever ridden them, you know the chances vary of arriving on schedule). It’s been suspended since March 23. There will be three Acela round-trips per day from Washington to New York City, while two trains will go on to Boston. The Acela has primarily been a train for business travelers, and demand fell by as much as 99 percent as stay home orders took effect on the East Coast.

The uncertain fate of the BQX. New York City has been talking about a streetcar named the BQX that would run between Brooklyn and Queens. It had just begun an environmental review for the route. But the plan may now be on hold, due to budget constraints in the wake of COVID-19. The streetcar is supposed to stretch for 11 miles along the western ends of the two boroughs, but the city needs the federal government to pay half the cost of the $2.7 billion project.

Toronto heeds calls for open streets. Torontonians who’ve been calling for more open streets are getting their wish. Mayor John Tory is implementing a two-part plan. The first calls for more quiet streets, allowing for only local car traffic, cyclists and pedestrians. The second calls for streets adjacent to major parks and trails to be closed to cars. Toronto also plans to quickly implement bike lanes that have already been approved by city council.

Frontier ditches its social distancing charge. Frontier Airlines had the bright idea to charge passengers $39 to reserve an empty middle seat next to them. It was supposed to provide “peace of mind” to passengers who were trying to practice social distances. But when prominent members of Congress objected, including former Democratic presidential candidate Amy Klobochar, the airline decided to roll back the program. “We recognize the concerns raised that we are profiting from safety and this was never our intent. We simply wanted to provide our customers with an option for more space,” CEO Barry Biffle wrote to lawmakers.

Auto production restarts on the horizon. Michigan Gov. Gretchen Whitmer announced Thursday that manufacturing plants could begin reopening on Monday. Production by Detroit auto companies is expected to start a week later, on May 18. At first, plants can only operate at 25 percent capacity and there will be strict safety and sanitary guidelines in place. Meanwhile, it’s likely that Mexico will wait longer to restart production because COVID-19 is still spreading.

On this week’s podcast: the robot that brings your groceries

Many places are practicing contactless delivery, but how about skipping humans all together? Hear what that’s like when I visit the Produce Station in Ann Arbor, Michigan in the latest episode of the Curbing Cars podcast.

Find our podcast on Anchor and everywhere else you get your favorite podcasts. You can see some video and additional photos on the new @curbingcars Instagram page. Be sure to follow us.

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