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Delta saves money by rehabbing old jets

16-11-2012

As fuel prices have risen in recent years, many airlines have shed their fleets of aging gas-guzzling planes. But Delta is taking the opposite strategy, buying up many old MD-90s and Boeing 717s for low prices. The company is refurbishing the planes’ interiors and figures that even with higher maintenance and fuel costs, the aircraft will still cost about 10 percent less to operate than new Boeing 737s would. Delta purchased 49 MD-90s that average 20 years old, and it is scooping up 88 of AirTran’s Boeing 717s, which are about 11 years old. Southwest Airlines, which bought AirTran, was so eager to unload the aircraft that it covered $137 million of the cost of updating the planes’ interiors and paint. While Delta will initially lease the AirTran 717s, the company has made a point of owning many of its aircraft outright and reducing its debt burden since it merged with Northwest Airlines in 2008. Owning planes means that Delta can keep them parked when demand declines and not worry about losing money to lease payments.

http://online.wsj.com/article/SB10001424052970203406404578072960852910072.html

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