Hello everyone welcome to a bonus episode
of mini air crash investigation.
This is going to be a very different video
compared to the ones that I usually do.
The ones that I usually do are focused on
air accidents and this one will be more focused
on the general aviation industry.
These days you might have seen a lot of titles
like these, delta, air france , qatar , etihad
are all planning on cutting big planes from
their fleet, delta is planning on removing
the 777 while the others are getting rid of
their A380s, in this video i'm going to be
looking at why they're doing what they're
doing and why its the smartest thing to do
right now even though intuitively throwing
away relatively brand new jets that literally
cost a few hundred million dollars sounds
like a bad idea.
In the economic climate that we are in right
now travel demand is at the lowest it's been
in decades, with demand not projected to go
up one or two years, so taking out excess
capacity is the right thing to do.
Otherwise you'd be flying these massive planes
almost empty, losing money along the way.
But you might think that retiring them is
a bit too harsh.
The A380 is a brand new plane that costs about
half a billion dollars at list price, it seems
wasteful to retire the planes so early, the
same holds true for for delta’s 777s with
an average age of 15 years these planes have
a lot of good years left in them, but they're
being left at the figurative wayside.
Heres reason number one, storage costs money,
now youd think that when a planes on the ground
its making you no money and youd be right,
but when a planes on the ground its not only
not making you money its losing you money,
you see to store a plane you have to pay parking
fees for that plane and thats based on the
weight the heavier the plane the more expensive
its gonna get, moreover when the planes on
the ground, you have to maintain it so that
when you do want to fly it again its actually
airworthy, a figure that i found floating
around on the internet was $58,000 for three
days per plane and thats the lower bound the
actual figure is probably way higher.
But that doesnt explain the early retirements
on its own, look at the 737 max, theyve been
grounded for more than a year racking up fees
but you dont see airlines retiring them just
yet.
They know that when the 737 max does get back
in the air it's going to be profitable.
This is where point two makes an appearance,
the rise of ultra long range flights, im gonna
be using project sunrise as an example as
thats a well known flight.
Project sunrise aims to connect major australian
cities with cities like london and new york
with a direct flight.
This isn't good news for middle eastern carriers
like emirates and qatar.
You see before, when one wanted to travel
between sydney and london you'd probably connect
via doha or dubai but with project sunrise
you could fly direct to london on an a350-1000,
business travelers would opt for the direct
flight and now you’re going to find it very
difficult to fill high volume A380s and to
make it worse you'd be missing out on the
high value business crowd.
The A380 is only profitable if its almost
full, so now you have a plane that you cant
fly in the short term, a plane that you might
have to ground for a very long time and lose
1000s of dollars on every single day and a
plane that will be very hard to run profitably,
you see where i'm going with this dont you.
But you might be asking yourself “wait if
they retire their A380s and 777s right now
how will they cater to demand when travel
finally does pick up in a few years?” and
that brings me to point number three.
All these airlines have new fuel efficient
long range planes inbound Delta has plans
to take on A350s and A330s soon, emirates
has orders for the A350,777x and the 787,
etihad will take on the 777x, 787 and the
A350, qatar plans on taking on the you guessed
it the A350, 777x and the 787.
With the situation right now these carriers
can defer their orders to a degree and time
the entry of these new fuel efficient planes
just as demand picks up again.
And lastly with all these new fuel efficient
twin engined jets, you now have a flexible
fleet, lets go back to that project sunrise
example, lets say project sunrise is a runway
hit, and emirates is barely scraping by on
their sydney dubai route, with planes like
the 787 and the 777x you can now fly sydney
to dubai profitably with fewer passengers,
lets assume the worst case scenario, lets
say demand collapses on the sydney dubai route,
with planes like the 777x, a350 and the 787
you can easily redeploy them on other routes
like maybe to cities in india or nigeria or
any number of other destinations, you just
couldn't do that with the A380 due to the
A380s need for specialized airports,the A380
was relegated to mega hubs but these new generation
of planes aren't, they are way more flexible.
So now it doesnt really make sense to hold
on to planes like the A380 no matter how new
they are, it's a plane that will have a hard
time fitting in in the new aviation world
after all of 
this passes.
