Coping with
a Glut of Aircraft December 2020

At the end of November nearly a third of the world’s fleet of some 30,000 jet aircraft were parked or in storage: this is equivalent to the total number of aircraft that had been in commercial service in 1990; in one year wiping out more than a decade of growth.

In any normal year there is a small proportion of aircraft that are temporarily parked or mothballed — pending return to service, conversion or scrappage (see chart). Over the past three decades this has averaged 3% of the total world fleet (slightly more than the natural retirement rate), but has tended to fluctuate depending on the state of the economic and aviation cycles. The ratio shows peaks of 5% after the 1990 downturn and 5.0-5.5% between 2002 and 2004 in the aftermath of the September 11th calamity. In the past decade it has averaged 2%.

But aircraft are meant to be flown, and parking an aircraft for any length of time is not a simple matter of locking the doors and putting the key on a shelf. Finding somewhere to park is the first problem: airport parking charges do not come cheap (and in a normal year account for about 2% of global airport fees).

To put an aircraft for a short period of time in an “active parked state” (meaning that it could be brought back into service at any time) requires continuous monitoring. Its interior is first checked thoroughly, water drained, catering equipment removed, pitot tubes, engines and any other access points sealed to stop the ingress of unwanted visitors.

It then enters a short term storage programme with set maintenance tasks required to be performed every ten days: running the engines and the APU; rotating the tyres; checking the air conditioning, hydraulics and either keeping the batteries charged or disconnecting them completely.

This is all in addition to the aircraft’s regular maintenance programme.

To put an aircraft into longer term storage, it’s best to find a nice dry desert location — aircraft “boneyards” — not only to minimise corrosion, but also to keep the cabin free of humidity and avoid moulds and rank smells. In addition to the steps taken for short term storage, preparation involves fixing window coverings to protect the cabin and cockpit from the effects of the sun; fixing desiccant bags and humidity indicators in the engines in inlets and exhausts; oils are drained and replaced with antioxidant inhibition fluid; batteries disconnected; controls locked; and landing gear covered to prevent birds nesting.

Reactivation into service can take 40-100 man hours, essentially reversing the storage process: coverings removed; water systems restored and purified; fuel tanks checked and lines cleared of algae; and finish outstanding checks on the aircraft’s maintenance calendar.

The charts show an analysis of the distribution of the fleet in service and in storage in November by a choice of different criteria. These highlight:

• By operator/ownership: Overall 28% of airline operated passenger jets were parked or stored at the end of November, but only 6% of the very much smaller Cargo fleet. Lessors had been left with around 737 aircraft unproductively on the ground.
• By region: In Europe and North America 30% of the total airline fleet was parked, while in the smaller regions of Africa, Middle East and Latin America the proportion was closer to 40%. Excluding China, the Asia Pacific region also appears to have 30% of the fleet on the ground: but in China, where the huge domestic market has recovered to exceed pre-Covid levels, the proportion is only 7%.
• By type: Narrowbodies and regional jets account for 80% of the world’s fleet, and slightly more of the RJs were parked compared with the short haul workhorses of the 737 and A320 family aircraft. Although the entire 737MAX fleet was still grounded only 18% of the 737NG aircraft were parked compared with 30% of the A320 Classics.

Among widebody passenger aircraft some 30% in total were parked, but a significantly higher proportion of older and higher capacity equipment while only 20% of the 787s and A350s were in storage. Over 90% of the world’s fleet of A380s were parked, the only operators still flying the equipment being Emirates, China Southern, Korean and HiFly Malta (a Portuguese charter carrier, the only airline to have acquired a second-hand A380, and which since the date of this analysis has put it into storage).

There should be no surprise that substantially all of the relatively small fleet of all-freight aircraft were in service: the grounding of long-haul widebody flights has removed a substantial portion of available cargo space.

• By age range: it makes economic sense to park older equipment, and a higher proportion — over 40% — of the aircraft more than 15 years-old (in turn accounting for 40% of the world fleet) were in storage. (The median age of the aircraft in storage in November was 14.4 years compared with 8.9 years for those still in service.) It is possible that a large proportion of these could be permanently retired from passenger service, and airlines have chosen to accelerate retirement plans for their older and larger capacity equipment.

One of the trickier aspects of looking at future aircraft market balance is projecting the rate of permanent retirement from service. Boeing in its 2020 Commercial Market Outlook upped its estimates of retirement rates, particularly over the next decade, suggesting that 56% of aircraft deliveries up to 2030 would be for replacement compared with the 44% figure it had in its 2019 CMO (for a twenty year period to 2029). Ed Greenslet’s June 2020 forecast in Airline Monitor (on which the chart is based) expects retirement rates to run at 4-5% of the opening fleet in each of the next three years — more than twice the average rate seen in the past decade. His (optimistic?) forecast suggests that the world jet fleet in service could get back to the pre-covid levels by the end of 2023.

What will be intriguing will be to see quite where these aircraft return to service. So many of the large established carriers are likely to emerge from the Coronavirus crisis with badly damaged balance sheets, and are making plans for substantially smaller operations. Others, currently on critical life support, may still not survive. But for the first time in 40 years there will be a large number of cheap, second-hand equipment available for new start-ups. Monitoring the development of the parked fleet will be important: this is one of the key factors that will influence the future shape of the industry.