Alaska Air Benefits from a Young and Streamlined Fleet
All Bets on Delta: Comparative Analysis of US Legacy Carriers
Delta owns the oldest fleet
Delta Air Lines (DAL) has a vast and varied fleet of about 817 planes in current use and 23 in line with an average age of 17.1 years. A majority of Delta’s fleet comes from Boeing, with 143 Boeing 757s, 128 Boeing 737s and 78 Boeing 717s to top the list, followed by Airbus and a few McDonnell Douglas MD-80s and MD-90s. The airline follows the strategy of acquiring a mix of used and new jets.
While the strategy works wonders for the company and gives it higher aircraft-procurement savings and a reliable fleet, it could backfire if we see a steep rise in oil prices in future. This would make running an older fleet more expensive and a liability for the company.
United sticks to a smaller fleet
United Continental (UAL) has a relatively young fleet at 13.5 years. UAL uses a smaller variety of aircraft for its operations. The airline only operates Boeing and Airbus aircraft, with the latest Boeing 737 forming almost half of its total fleet. The company plans to receive 11 jets starting in 2016 and has options for 14 additional aircraft.
American Airlines operates the largest fleet
American Airlines (AAL) operates the largest fleet among the major carriers in the United States. The airline has a fleet of 968 aircraft with an average fleet age of 13 years. It tends to buy the latest aircraft and arguably had the largest order book for the year. A majority of its aircraft came from two major manufacturers, namely Airbus and Boeing, with some coming from McDonnell Douglas, Bombardier, and Embraer. The Boeing 737-800 forms about 40% of the airline’s domestic fleet that continues to grow.
The airline is in the midst of a major fleet restructuring. This could work well for the company as it could boost its fuel efficiency and protect it from any bounces in the price of oil in the future.
Alaska Air Group benefits from a streamlined fleet
Alaska Air Group (ALK) benefits from having a very streamlined fleet that helps it save on maintenance and training costs and provides greater efficiency. The airline has an operational fleet of 144 Boeing 737 aircraft, with an average age of 9.3 years. The company expects to take this count up to 153 by the end of 2017. On the other hand, Horizon Air maintains an operational fleet of 52 Bombardier Q400 aircraft with an average age of 8.3 years. It plans to bring its fleet to 54 by 2017.
The Dynamic Leisure & Entertainment ETF (PEJ) holds 5% each of AAL, DAL, and UAL.
Browse this series on Market Realist:
