Delta Air Lines surprised us all yesterday by announcing it would retire its Boeing 777 fleet by the end of 2020. Why would Delta retire this iconic long-range aircraft that it only recently retrofitted with new seats?
I’ve outlined five reasons, some stated, some conjecture on my part, to explain this unexpected move.
#1: International Travel Will Return Slowly
This one is obvious enough. With international travel predicted to rebound more slowly than domestic travel, the need for a large fleet of longhaul jets diminishes. In a note to employees, Ed Bastian confirmed:
With international travel expected to return slowly, we’ve also made the difficult decision to permanently retire our Boeing 777 fleet – 18 aircraft – by the end of the year.
With only 18 aircraft in the fleet and a larger capacity, it was easier to retire than Delta’s older 767-300s.
#2: More Fuel Efficient Aircraft Now Have Similar Ranges
Gil West, Delta’s Chief Operating Officer, praised the 777:
“The 777 has been a reliable part of Delta’s success since it joined the fleet in 1999 and because of its unique operating characteristics, opened new non-stop, ultra-long-haul markets that only it could fly at that time.”
“The 777 has played an important role with Delta since 1999, allowing us to open new long-haul markets and grow our international network as we transformed into a global airline. I’ve flown on that plane often and I love the customer experience it has delivered over the years.”
But note the language. The 777 “allowed” Delta to transform (past tense). It opened new markets that “only it could fly at that time“. But we are now in 2020 and new aircraft like the A330neo and A350 have extended ranges that make the 777 no longer necessary on most routes. These aircraft are also much more fuel efficient (the A350 is 21% more fuel efficient than the 777 according to Delta).
There is one potential exception. Even the A350-900 cannot quite match the 777-200, so there is question over whether the Atlanta – Johannesburg flight will remain (8,439 miles).
#3: With More Airbus A350s Coming, Delta Doesn’t Need 777s
As part of Delta’s new alliance with LATAM, it took over an order for 10 A350-900s. It already has 13 in its fleet with an order for 16 more. So with 26 additional A350s coming, the need for 777s lessened.
> Read More: Delta’s Investment In LATAM Is Pure Genius
#4: A Way To Force Out Senior Pilots Gracefully?
“Retiring a fleet as iconic as the 777 is not an easy decision – I know it has a direct impact on many of you who fly, crew and service these jets.”
Indeed it does. In fact, this hits senior pilots particularly hard. Could this have been part of the plan? Of course pilots could retrain. But perhaps Delta figured that with retirement approaching for many of these senior staff members, the retirement of the 777 would hasten that goal and free up payroll revenue?
#5: A Way To Write Down Earnings Once Profit Returns?
Who knows when Delta will be profitable again, but what boggles my mind is that Delta just spend millions of dollars retrofitting these aircraft. They now include the latest Delta One (business class) suite, the latest technology, and still maintained 3-3-3 seating in economy class (while most airlines squeeze 10 across).
Could this be a way for Delta to carry forward loss to an even greater extent so that it can report a higher loss (less depreciation) and use these write-offs to offset profits when (if…?) those days return.
Obviously, the fourth and fifth reasons are just speculation on my part, but I don’t think they are totally unreasonable conclusions. Certainly, the incoming A350s and reduced demand made retiring the 777 much more palatable. That said, this aircraft will be missed.