There is a variety of ways that low-cost airlines are reducing spending on new planes. Amid the global pandemic, many airlines have been forced to make significant changes, including cutting back on expenditures in numerous areas. Here’s a rundown of some of the ways airlines are cutting back on new planes:
1. Deferred deliveries: Some airlines are opting to defer the delivery of new aircraft. This helps to reduce the immediate financial burden of paying for these aircraft.
2. Renegotiating Purchase Agreements: Many airlines are negotiating with aircraft manufacturers to reduce prices, delay delivery dates, or swap orders for newer, more efficient models.
3. Fleet simplification: Airlines are also simplifying their fleets to reduce costs. This means that instead of operating multiple types of aircraft, they may operate just one or two. This can lead to significant savings in training and maintenance costs.
4. Older Aircraft Usage: Instead of purchasing new planes, some airlines may choose to continue using older aircraft. While these planes may be less efficient, the cost savings from not purchasing new aircraft can offset this.
5. Leasing instead of buying: Leasing provides a way for airlines to access newer aircraft without the high upfront costs of purchasing. This allows airlines more flexibility in managing their fleet capacity.
6. Reducing fleet size: Some airlines are even reducing the total number of aircraft they operate, grounding some planes permanently to decrease overhead and maintenance costs.
7. Selling and leasing back: Airlines are selling their owned aircraft and then leasing them
