Fleet retirements will increase over the next decade due to several converging trends, says Kevin Michaels, leader of ICF SH&E's aerospace and MRO practice at the MRO Americas conference in Atlanta today.
These factors include rising fuel prices, lower interest rates, new technology and a vast amount of aircraft that will be retired regardless of fuel cost or cost of capital. "These forces are actually shaping the decision in favour of buying new aircraft and retiring mid-range or mid-life aircraft," says Michaels.
The consultancy forecasts that the worldwide commercial aircraft fleet totals about 26,156 aircraft now, with about 13,700 deliveries expected during the forecast timeframe of 2013 to 2022. Of these deliveries, about 7,200 will be used for new growth in airlines' fleets, while the rest will offset retirements.
ICF SH&E forecasts that about 6,560 aircraft will be retired between 2013 and 2022, or about 47% of the deliveries forecasted during the period. Historically, these retirements have driven 20% of deliveries.
About 600 to 700 retirements are expected per year between 2013 and 2022, which is an "unprecedented" number, says Michaels. These retirements will make up about 2% of the total fleet, which is about average. But the magnitude of retirements is significant, he explains.
If the average retirement age of aircraft decreases by three years, that number would increase to 8,600 over the forecast period. A typical regional jet retires at 21 or 22 years of age, while single aisle aircraft see an average age of about 28 years.
Retirement ages for aircraft overall are increasing, but narrowbodies have seen retirement ages decrease three to four years since 2010, he says. This decrease is expected to continue. This is especially true for the Airbus A320-200, he says, which is on a track to retire at a median age of less than 25 years.
"We've had to go back to the playbook and revise our retirement assumptions," says Michaels.