The coronavirus has devastated
the airline industry. U.S. air travel has dropped 95 %
compared to last year, and the number of flights scheduled globally
is down by 63 %. The insides of airports are empty,
but outside is another story. While some airlines have started
transporting cargo on passenger planes, more than two-thirds of
the world's commercial aircraft are grounded. It's somewhere between 14
and 15,000 aircraft that are parked, or almost 60
% of the fleet. Never before in history have airlines had
to ground so many planes so quickly. Customers have come to us
and said, look, we're parking literally hundreds of
aircraft per day. And logistically, it's
very, very complex. This is a particular difficult time
and we've created a particular app that literally allows them to
virtually park the aircraft with no demand for flights. Delta and
United reported their first quarterly losses in more than five years. American Airlines told CNBC its revenue is
down 90 % from a year ago. Parking hundreds of aircraft is
also adding to their losses. These planes can't just sit idle. They need routine maintenance and
a place to be stored. And when you suddenly have thousands of
planes with nowhere to go, it becomes a logistical nightmare. Before the coronavirus hit, airplanes were
where they were meant to be in the air. At certain times of the
year, there could be as many as 20,000 planes in flight at the
same time around the world. At the end of 2019, the global
air fleet was nearly 24,000 and now more than 16,000 of those massive
machines need a place to park. And that number can continue to go
up as airlines cut their networks. Aircraft storage facilities have been around
for decades, but never in history has the aviation industry had to
park so many planes at once. Airlines are having to get creative
about finding space for planes. A recent flyover of a
storage facility in Victorville, California, shows planes fit together like
puzzle pieces on unused runways. Victorville is well known as one
of the world's biggest airplane boneyards, a storage location for out
of service or old planes. It was already storing Southwest's fleet
of Boeing 737 max eight, but it's now storing hundreds of other aircraft
due to the lack of demand and air travel. Victorville, along
with boneyards in Roswell, New Mexico, and Tucson, Arizona, are
currently the top three locations for parked aircraft. They've collectively
stored 800 so far. Routine parking happens from
time to time. Very, very small
volumes of aircraft. But this is completely unprecedented,
so widespread that aircraft are being parked at airports, all over
major airports now have many parked aircraft on the ground and they're
gonna be there for a while? As you can see here, American
Airlines is using Tulsa International Airport as a parking lot
for many of its jets. There's currently over 50
grounded airplanes here. Nothing this big has ever
landed in the Alice. More than a dozen planes are now
sitting in a storage facility at the Outback Airport. Aircraft range in size. For scale, a standard football
field is 160 ft. wide. A narrow body jet like Boeing
737 has a wingspan of 117 ft. But wide body airliners
can be twice that. The world's largest plane, Airbus's A380,
has a wingspan of 261 ft. Even aircraft manufacturer Airbus is
being asked to help out. Customers have come to us and
said, look, we're talking literally hundreds of aircraft per day and we
have a huge amount of maintenance work to do with that. And
we've created that particular app. And that's an app that helps our
customers to work out exactly how much maintenance is needed and
even logistically where the aircraft are. And that enables them to very
quickly optimize how to block the aircraft, which park them and also to
prepare them when they come out of service when this is through. Airbus, along with Boeing, dominate
the commercial aircraft industry and together make up 91%
of the market share. Airbus has over 11,000
planes in operation. Skywise is a digital platform
the manufacturer offers its customers to keep up the
health of an aircraft. It collects data from systems
and sensors to help predict maintenance, as well as help
with logistics of daily operations. Airbus has added a new feature
to help airlines find parking. Parking an airplane isn't as easy
as just finding a spot. Factors like how long the plane will
be out of service and what type of maintenance needs to be done, play
a role in finding a location. A decision is made as to
whether it's basically storage or whether it's actual parking. Now, parking is typically
relatively short term. It's a bit like putting something
in the fridge compared to longer term storage, which would be where
you put it in the freezer. So certain pieces of maintenance must be
done before you can pick up an aircraft, even if it's just
for a couple of days. These aircraft cost hundreds of
millions of dollars and maintaining them is not cheap. Even when parked,
they need to run the engines, cycle fluids and move the tires,
among many other checklist items. This is why some airlines are flying
with just a few passengers aboard just to keep them running. When airlines know the plane is going
to sit for months at a time, they're sent to the desert because
the dry climate helps prevent corrosion. If it sits on the ground
for one or two months and has been operated that whole time, it
requires a lot more maintenance to bring it back in the service than,
let's say, if it has been started up every 10 days or so. I was just speaking with the
head of maintenance for significant U.S. airline. And what this person told me
is that right now they have need for X number of aircraft,
but they're actually keeping 2X. In other words, twice as many active
and they're rotating them in and out. So that way for those other
aircraft, they won't have to worry about the more extensive maintenance
bringing them back in the service. At the moment, w e have about
80% of the fleet in the park ing mode. Eithad Airways, for example,
returned over 100 planes to its main base in Abu Dhabi, where
it sealed up engines and sensors to prevent things like sand from
getting into critical areas. They're a very intricate,
complex piece of machinery. It's not a lot parking a car. The outlook for coronavirus
is still unclear. Boeing told its shareholders that air
travel could take two to three years to return to normal. Airlines have had to consolidate fleets
to cut back on costs. International travel has been hurt the
most and with good reason. And it's very difficult now
to travel between countries. This means that long haul aircraft,
which are generally what we call twin aisles, or wide bodies are
going to suffer more than single aisles like the 737 and 320. The A380, the big double decker
that Airbus launched a little bit over a decade ago, every one
of those is on the ground. A hundred percent of the
A380s are grounded today. The larger it is and the older
it is, the more it suffers. So when you're down gauge, you're
going to go to the smaller aircraft, the most
economical aircraft. Airlines before co ronavirus
were doing great. They had the highest employment levels
in the United States, at least in 17 years. They were hiring like crazy,
Pilots, flight attendants, expecting this big rush in
travel to continue. And we've seen it over the
last decade, the decade of profitability. And now they're going to be
posting the first losses in years. Airlines have seen
incredible losses. And analysts don't expect that
to stop anytime soon. Like many businesses, large and small,
they're in survival mode and looking for ways to conserve cash. Lack of demand could lead to
canceling or deferring future orders from manufacturers. Airbus and Boeing have already
cut back on production. And both companies are
planning to slash jobs. As for the thousands of aircraft
parked around the world, retirement could come much
earlier than expected. The thing to understand is that
before this crisis hit, airlines couldn't get these planes fast enough
with one of their biggest complaints was that
aircraft were delayed. So the market for
aircraft was very high. Airbus and Boeing, which dominate
aircraft production, have been sold out of some of their best sellers
through pretty much the middle of the decade. So it was even
hard to get a slot. And we're going to see
that kind of reverse. And you'll see some cancellations. You'll see deferrals. We'll see that
market sort of loosen up. But some airlines, because fuel is such
a big cost, they do want the more fuel efficient
aircraft going forward. But the timing of when they get
those planes, that's going to change. It will all depend on
when demand comes back. 6,000 of these are
15 years or older. 4000 of these are 20 years or more. And so they're already
approaching retirement age. And we're in a situation now
where we have thousands of excess aircraft. So if you're an airline
and you're deciding what aircraft you're going to keep around, you
don't want to spend millions of dollars on maintenance to keep your
older aircraft around for them to fly into next year. So the impact here is dramatic. There is no timeline for when the
world will return back to normal. So for now, much of these aircraft
will sit waiting for the return to normalcy like the rest of us.
