By Guglielmo Mattioli

Passengers flying on a domestic route might find themselves experiencing deja vu because airlines are holding onto their old planes for longer period of time.     

U.S. airlines, which already have among the oldest fleets in the world, are responding to low oil prices by delaying the purchase of new, more efficient planes. Instead, they are buying older, cheaper, gas-guzzling aircraft.

“American carriers tend to operate aircrafts for longer compared to the rest of the world,” said David Tokoph, chief operating officer of Morten Bayer & Agnew,  “and fuel prices are holding off on new fuel-efficient purchases.”

The trend represents a shift in strategy for airlines, which for years pushed Boeing and Airbus to design more fuel-efficient aircraft. Fuel alone amounts to 30% of an airline operating cost, which is even greater than labor. Oil prices peaked in 2008 touching $145 a barrel and pushed the already struggling airliners to merge. In the following eight years fuel prices declined all the way to $33 a barrel last February, making the new generation of expensive but fuel efficient aircrafts less attractive. As a result, companies have decided to postpone the purchase of once desirable fuel-efficient airplanes, and rethought their fleet managing strategy.

 Fuel cost change Net income Fleet’s ageIn 2015, Delta made the headlines of aviation newspapers when the company decided to buy 80 Boeing 717 from AirTran Airways. Boeing stopped producing 717s in 2006 and today’s price range is between, $7 to $10 million.

The five major U.S. airliners, American Airlines, United, Delta, Southwest and JetBlue have fleets that are, on average, 12 years old and which comprise fuel-consuming airplanes out of production such as Boeing 747s and McDonnell Douglas MD-80/90s. Many planes have 20 to 24 years of service under their wings.

 In the first three months of the year Boeing secured 96 orders. United Airlines alone ordered 40 old versions 737-700, not the newer, more efficient 737 MAX. FedEx ordered an old 767, and an unidentified buyer cancelled four orders for the super efficient, wide body 787. On the other side of the Atlantic, Airbus delayed the production of the new A330 Neo and increased production of its older version, the A330.

Last year United announced the lease of 25 Airbus A319 from AerCap that are, on average, 16 years old. “Our flexible fleet plan allows us to opportunistically add used aircraft when the economics are attractive,” the company’s Fleet Vice President Ron Baur said.

For airlines, there are also other advantages to buying older planes. Crews don’t need to be trained again because they are already familiar with the aircraft and regular maintenance is cheaper and easier.

“The advantage of buying an older airplane is that there are plenty of parts available,” said Nick Popovich, president of Sage-Popovich, a repossession airline company. “Especially with an uncertain economy to say the least, this is quite a smart thing to do.”  

But the situation may not last long, said Scott Hamilton, founder of Leeham LLC an aviation consulting company, who expects oil to go up to $65 a barrel in the next 18 months. For the time being, however,  airlines are sticking to their fleet as much as possible.

“Acquisition and purchasing of re engined airplanes have slow down,” Hamilton said, “Low prices took away the pressure off to act.”

Boeing and Airbus are not worried about their long term growth. Both expect the aviation market to expand with developing countries soon to join in the sky race and old time players to gradually switch to fuel-efficient jets. Tokoph said both companies have massive backlog orders for the next generation planes.

Boeing expects that in the next 20 years the world’s airliners fleet will add 38,000 new planes, most of which fuel-efficient.   

George Hobica, founder of said that one unexpected advantage of this revival is that companies use old airplanes to maintain less profitable routes that otherwise would be dismissed and customers can tell how old an airplane is only by the amount of tape in the cabin. Most importantly: “old doesn’t mean unsafe,” he said.     

Fleet’s age

Net income

Fuel cost change