An overview of Europe’s in-service Airbus A320s and Boeing 737s shows that much of the region’s narrowbody fleet is not available for third-party maintenance, repair and overhaul providers, with the majority of large airlines conducting airframe MRO in-house.
The 20 largest narrowbody operators hold around two thirds of Europe’s approximately 3,230-strong 737 and A320 fleet by the end of the third quarter 2013, Flightglobal’s Ascend Online database shows. This group ranges from Ryanair with just over 300 737-800s at the top of the list to UK carrier Jet2 which has 38 legacy and current-generation 737s.
The figures illustrate how far Ryanair and EasyJet have left the former flag carriers behind in the wider European short-haul market. Ryanair is by a wide margin the largest European narrowbody operator with 9.3% of the continent’s 737/A320 fleet. The Irish budget carrier has nearly 40% more aircraft than its nearest rival, EasyJet, and twice as many as Europe’s fourth largest narrowbody operator Turkish Airlines. Nevertheless, with its 217 A320s, EasyJet has still more aircraft than the combined single-aisle fleets of Air France and KLM.
But despite the rise of the low-cost carriers, there does not seem to be much change in third-party airframe maintenance terms – at least at the top of the table. All but one of the six largest narrowbody operators conduct base maintenance in-house. Ryanair has three hangars – in Prestwick, UK, at Hahn airport in Germany, and Kaunas in Lithuania – where it carries out C-checks. Air France, British Airways, Lufthansa and Turkish Airlines look after their own and subsidiary aircraft through in-house technical departments.
Only EasyJet tenders its maintenance on the open market. Heavy maintenance has been contracted to SR Technics in a long-term agreement until 2020, while everything else including C-checks have been packaged under the airline’s equalised maintenance regime into similarly sized overnight checks that are completed by a number of partners. These include SR Technics, Lufthansa Technik and Virgin Atlantic’s engineering base in London Gatwick, as well as EasyJet’s own hangar at its London Luton base.
Two thirds of the aircraft used by Europe’s 20 largest narrowbody operators are maintained by MRO providers that are either part of the airlines or their parent groups. For example, Vueling’s A320s are serviced by Iberia Maintenance. The remainder are available to third-party MRO specialists, but also this segment includes a number of long-term arrangements. Alitalia, for instance, has contracted its former, Naples-based technical division Atitech – which today is an independent company – to support the carrier’s A320 fleet until 2020.
More business potential for third-party MRO providers has been created among small and medium-sized airlines, which do not have sufficient economies of scale to make in-house technical operations cost-effective. Finnair is a prime example for this development, as the Nordic carrier gradually shut down its airframe, component and engine overhaul departments over the past three years. Much of that work being outsourced to SR Technics.
Meanwhile, low-cost carriers such as Norwegian, central European operator Wizz Air and Pegasus Airlines in Turkey grew their networks by concentrating on operations, whilst maintenance was contracted to third-party MRO providers.
The average age of Europe’s 737/A320 fleet is just over nine years. Low-cost operators that have rapidly expanded over the last two decades and airlines in growth markets, such as Russia and Turkey, have much younger fleets than their network carrier rivals. New aircraft not only require less MRO than older equipment, but, crucially, their maintenance can be more reliably planned. Mature aircraft are more likely to generate surprise issues during airframe checks – for example corrosion in infrequently inspected areas that are difficult to access – than their younger siblings. Maintenance costs and downtime are thus much harder to plan, which, in turn, makes it difficult to follow tight schedules, such as an equalised maintenance regime where aircraft undergo daily overnight checks to avoid lengthy C-checks.
Despite their enormous fleets, EasyJet and Ryanair both have an average aircraft age of 4.8 years. The latter’s oldest aircraft is 11 years old, while the former’s fleet leader is a year younger. The next largest operator, Lufthansa and its low-cost arm Germanwings – both have been combined in this analysis as Germanwings took over Lufthansa’s European network outside the Frankfurt and Munich hubs – shows an more than twice as high average at nearly 12 years.
That result is skewed due to the German carrier’s 23 legacy 737-300s and -500s, which are between 22 and 24 years old. However, Lufthansa’s oldest A320s are not any younger either. Despite on-going aircraft deliveries, the airline’s A320 fleet has an average age of 13.5 years, with the sister A319 and A321 fleets being around nine years old. The narrowbody fleet will be gradually replaced with around 40 pending deliveries and an additional order – placed earlier this year – for 100 A320s, including 70 re-engined A320neos. Deliveries for the latter order are scheduled from 2015 until 2025.
Russia’s Transaero Airlines has a largely mature narrowbody fleet with an average age of just over 15 years. This is driven by 23 737 Classics built between 1987 and 1998. But some of these aircraft will be replaced by additional 12 737-800s and eight firmly ordered A320neos between 2015 and 2019.
A similar situation exists at Siberian carrier UTair, which has a fleet with an average age of 14.2 years. The airline operates 40 737-500s and -400s – which were manufactured between 1993 and 2000 – but it is introducing new 737-800s and -900ERs and, since 2013, also A321s as replacement.
The picture looks very different at Turkish Airlines, however. The Istanbul-based mainline carrier’s 150-strong, mixed 737 and A320 fleet is one of the youngest narrowbody fleets in Europe with an average age of 5.7 years. While the equipment has plenty of service life left, Turkish has nevertheless the third-largest order backlog in the region with 167 firm orders and an additional 60 options. This should give the airline the opportunity to either keep the fleet age low or significantly expand its network.
At an average age of just over 10 years, Air France’s A320-family fleet is not very old. About a quarter of the 135 aircraft were manufacturer before 2000, with the fleet leader being delivered in 1989. Yet, the French flag carrier – and its Dutch sibling KLM - stand out as one of the region’s mainline groups which does not yet have a significant narrowbody order in place.
BA and sister operator Iberia are conspicuously absent from the top of the firm order and options table. However, their parent IAG signed a letter of intent for 100 A320neos in August 2013. This requires board approval and could cover aircraft for both airlines.
The deal also included 62 firm orders and 58 options for current and re-engined A320s for Spanish low-cost arm Vueling.
Alitalia and Portuguese flag carrier TAP, too, stand out for the lack of fleet orders. But any fleet plans will probably depend on the former’s successful reorganisation – potentially within Air France-KLM – and the latter’s planned privatisation.