While United may have announced the largest displacement bid in the industry, we simply don’t know what the future holds or if that will be accurate in the long run. What is interesting is they’ve announced the largest displacement bid but have provided the least clarity on longterm fleet plans compared to other Legacy carriers. As a bell-weather for when clarity will be coming, SouthWest may be planning to run scheduled checkpoints to evaluate the return of demand and determine needed staffing for the next year. This plan makes the end of August a very important checkpoint when it comes to forecasting demand needs. Airlines will need to be more committed by then. It is worth noting SouthWest has only one fleet, making retraining in a large bid virtually non-existent allowing them to wait, whereas United has more fleet types and therefore will need further notice to restaff active fleets.
United has one of the older fleets in the business at an average of 15.9 years, making this a prime opportunity to make fleet changes.
In this model, we assume the following things (which will be incorrect).
- The 757/767 fleet is retired over the next year. The ages on those aircraft are (757-200 = 23.7 years, 767-300 = 24.4 years, 757-300 = 17.8 years, 767-400 = 18.7 years). Making them prime candidates to be retired. Once a fleet drops below 20-40 aircraft retirement pressure increases as airlines lose economies of scale, especially if the aircraft is older.
- The Airbus A320 fleet is the next oldest at 21.8 years, Boeing 777-200 at 21.0 years, and the B737-700 fleet 20.6 years. The model assumes as simply “a guess” that half of the A320 fleet, 50 of the 777-200, and 20 of the 737-700 are retired. It is very possible, that this will be inaccurate. It is more likely that the airline will reduce block hours across the fleet, and then recover those hours as demand returns.
What should be noted is even with the assumptions of drastic fleet cuts made by this model, the model’s pilot demand forecast is much less severe than what United had advertised. The good news is their fleet plan and displacement plan will have to start to solidify in the next couple of months, giving more clarity to those watching. Hopefully, demand continues to return.
United Pilot Demand Projection