So for all you commercial types. What is it about old airliners that makes them not viable or profitable for people moving but makes them great for air freight. I ask because every day around LA I see dozens of FedEx and UPS MD11's and 757's and 767 buzzing around, all old airliners, and I'm sure they don't choose them because they loose money. I know the engines are not as efficient, and the electronics are not as modern, so what so freight companies do different to make them profitable that the airlines could not. Thx
Tech, I fly the A300 for FedEx (and fly into LAX frequently) so I'll give it a go. The airplanes you mentioned aren't as old as you might think. FedEx was taking delivery of new A300s until Airbus shut down production of the model in 2007. We will take delivery of new 767s this fall, with an order of 50+ over the next few years. I think Boeing gave us a great deal to keep the line open in preparation for the new Air Force 767 tanker. You do ask a good question regarding profitability of using "old airliners." Most of the freight companies lease these airplanes...they don't own them. The 757s, MD11s, etc., are relatively cheap and plentiful. I'm not sure who pays for freighter conversion but I bet FedEx and our brown competitor don't get the entire bill. There is a market for used airplanes, but not a huge market for "retired" passenger planes. Once the conversion happens, imagine the cost per air mile and cargo footprint of packages vs passengers. Hauling passengers doesn't maximize the lift opportunity of the aircraft like hauling freight. There is more money/profit to be made hauling an airplane full of boxes and overnight letters than an airplane full of people. Almost every inch of the airplane is full of containers or "cans." There is almost no wasted space. The planes are available, cheaper than new, and reliable. A more interesting question is what determines when the people movers decide to eliminate certain aircraft? Obvious answers are greater efficiency, more creature comforts, newer technology etc. Boxes don't complain about seat size, small lavatories, turbulence, etc. Their business is completely different, but I think you get the picture. I'm no MBA and this just scratches the surface. Hopefully, that answers your question. PM me your contact info and I'll touch base with you next time in LA. You can pick my brain about planes and I'll pick yours about Ferraris! Always looking to make new friends in the Ferrari community. Mark
Well, the MD-11 was made until about 12 years ago. The 757 until about 8 years ago. So maybe not that old. But old examples of those two could be 20 years (or more) old. The 767 is still being made as we speak. There are plenty of new freighters (Lou747 flies a brand new 747-8 freighter). Not sure how difficult to convert a pax to freighter... have to cut in new loading door(s), strengthen floors...
Typically the age at which a pax airplane begins to become viable for conversion to freighter is about 15 yrs. One thing to remember is that a significant number of airplanes are leased by airlines. At about this time the airplane is reaching a point where it needs a major inspection (D check) and a new interior. Cost for the two of these can run as much $10M, or more, per airplane. For a leased airplane the leasing company will likely be on the hook for this. They will have also pretty much written the plane off by this point. Further it becomes more difficult to lease an airplane as it gets older. By converting an airplane to a freighter the cost of the D check is decreased as the plane is being competely stripped anyway, and the marginal cost to convert rather than refurbish is not that great. In the past the utility of converted airplanes is only marginally less than production freighters, although that is changing with 3rd generation airplanes (A330/B777). For the price of a used airplane and the conversion you can buy anywhere from 2-4 airplanes for the price of a new production freighter. The operating economics (freight margins can be very very thin) make conversions an attractive alternative. FedEx just bought a bunch of 757's from United with options for more. I think about 40 total. ST Aerospace (Singapore Technologies Aerospace) will convert them to freighter using a licensed kit from Boeing. Cost to convert each airplane is approx $15-18Mil. ST Aerospace is also supposed to be starting engineering for conversion of A330's. We'll see how that goes.
It is really a question of capital costs versus operating costs. There are passenger airlines which use old airplanes profitably-- Allegiant comes to mind, with their fleet of beater MD-80s. Of course, their business model is a bit different from a traditional airline, but still... Competition between Boeing and Airbus for sales, along with improvements in efficiency, have made new airplanes pretty attractive over the last 10-15 years. I would also guess, and please correct me if I'm wrong, that cargo carriers like FedEx fly their airplanes fewer hours per year, on average. This would tend to shift the equation toward lower capital costs, even at a higher hourly cost. For that matter, I would guess that someone like Allegiant probably flies their airplanes fewer hours per year on average than someone like Southwest.
The current paradigm is 'invisible freighters' The next generation of "invisible freighters" is coming - CargoFacts.net
Southwest for years ran their business model on fast turnarounds that keep their planes in the air longer than others. There is a great book about Southwest Airlines and this philosophy called NUTS. I know they are still trying to minimize their time on the ground per plane, but the industry economics are quite dynamic at the moment as this thread indicates.
That's nothing new. They've been doing that for years, some carriers more than others of course. As someone I know once wrote, the most profitable space on an airliner is, in order, the belly, the front of the airplane, and everywhere else. And they are treated accordingly.
I'm not an expert on economics or the deeper points of engineering but I do know that to convert a pax to a freighter requires a lot of structural mods; beef up the floor beams, beef up some of the fuselage frames and skins, and then install the freighter stuff like the ball pallets and locks and guides. That's about it; no more seats, cushions, carpet, entertainment systems, lavs, decorative paneling,etc. Big aluminum tube.
Regarding the original posters question, not every freighter flying is an 'old' (i.e. 25 year old machine that gets converted). As pointed out Fedex up until recently (along with UPS too) were taking delivery of new build A300s. But for the used aircraft market, as the planes get older, or more cycles on them (cycle = 1 take off and 1 landing), they begin to cost more to maintain. They'll begin requiring heavy maintenance the more 'miles' they log (cycles). Heavy maintenance is not cheap, takes the plane out of service for a while, and begins to add up. the trade off is usually at that point, the plane is paid for. Some airlines keep them, some begin to retire them and replace with newer aircraft (even of same build - example, ANA 767s). A lot of freight companies are like small businesses and can't afford new build aircraft. So the trade off is they buy used aircraft that likely need more maintenance, but its a trade off. Cheaper aircraft, likely more maintenance costs. Goes not just with freighter market but also airline market (see Allegiant below) Now, see response below... Look at Delta (what was really Northwest), they're still flying DC-9-50s! Plus they're acquiring a lot of older MD types that are getting up there in age. They've been buying up used MD-90s left and right. And they're now acquiring Boeing 717s (MD-95 - never bought off on the 717 crap) from Southwest (post Air Tran merger). Of course they're the exception, not the rule. Delta even with higher fuel costs and increasing maintenance costs would rather have aircraft that are paid off rather than being indebt to the manufacturers. Hence why they continue to operate an older fleet, and why they're buying more used aircraft these days. Every airline is different.
I never bought off on the 717 crap either. The 717 was the model number of the KC-135 but the marketing and sales people thought that it could be used again with no regard to company history.
Agree, Jim, I flew on a Delta DC-9* a couple months ago that still had ashtrays in the armrests... now that's OLD. They were glued shut.
NWA did a major re-config on their DC-9 fleet back in 1995-96. Probably the interior that you were flying on.
My first flight on AirTran was on one of the DC-9-30s that they had inherited from ValuJet. This seemed like the oldest aircraft I ever flew on. It was a night flight and the cabin lights flickered for the whole flight. The plane creaked and groaned and the ventilation was quite weak. (Good thing it was a night flight!) I vowed never to fly AirTran again unless it was one of their new "717s". Fortunately the DC-9s had almost been phased out by then, and the next time that I flew them, the old 9s were all history. The "717" was really just an up-to-date DC-9-30, but much nicer than the old birds.
