It is no secret that United Airlines is going to be retiring many of their 757-200 aircraft. The planes from the legacy United fleet are mostly older, at 20+ years now, and the airline is looking to replace them with newer 737 planes. The newer aircraft are more fuel efficient for most of the trips the planes operate in the domestic market. And while United had previously indicated some retirements of the planes, including a sale of 30 to FedEx, the most recent quarterly earnings call included the announcement that all of the domestic config planes will be retired by the end of 2015.
The planes are set to be replaced by new 737-900ERs but the numbers don’t quite add up. More than 70 planes are to be retired while only 48 new deliveries are scheduled in the same time period. There are other deliveries expected in that window – more 787s and 70 passenger regional jets – but the lack of parity in the 737/757 swap does raise some interesting questions. The company is opening up 737 pilot positions in the coming months which will help offset the pilot shift issues but there will still potentially be a shortage of seats for the pilots to work out of as the shift happens.
The other challenge will be for passengers. With fewer planes and fewer larger domestic planes the end result would seem to be a capacity drop effected via fewer routes, frequencies or both in mainline service. And while the 70-seat regional jets can handle some of those routes, allowing the 737s currently on them to cover for the 757s being retired that doesn’t necessarily present the most efficient solution, especially at airports like Newark where there are limits on the number of operations the airline can fly daily.
At the same time, the numbers don’t lie (too often) and the change is all about saving money. At least one bit of research puts the operating costs of the 737-900 at $1300/hour less than the 757-200. Figure an average of 12 hours flying daily on those planes (just a guess, but it should be pretty close based on the averages compiled here) and the potential savings are a bit crazy. Take 70 planes and multiply by 12 hours a day and $1300/hour and the potential savings is more than a million dollars a day, nearly $400 million annually. Another number suggested was $2mm per plane annually which is “only” $100mm per year by the time the full swap happens. Either way, that’s a lot of cash saved.
There are still some markets United has the 757-200s on which cannot be served by 737s, mostly in transatlantic operations. Those planes are not being retired any time soon. But for the rest of the 757s it is a quick move to stand down and replace the planes.
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United is not interested in carrying more passengers. They can easily sell more expensive tickets on less seats to get same income.
As a United economy passenger I would rather see transatlantic 757 retired and replaced with 767/787. 737 is not good enough even for EWR-LAX leg so 757 retirement will make me Virgin customer instead.
I wonder how much of this can be covered by an increase of block time on the 737s…
The utilization numbers on the 73s are already pretty high, I think. I’m sure they can be stretched a bit more, especially if crew integration happens, but that’s still going to be challenging.
I agree with Nikolay. I mostly fly Delta but have flown the Bos-SFO route on United on a 737, and it was not a comfortable flight. My wife has to take the same flight about once a quarter and she is just miserable when she gets off the plane. At least the 757 has some good seats in economy, that if you can pick them, make for a more reasonalbe cross country flight, in terms of comfort. Just my two cents.
Thanks
What happens with PS flights, replaced by standard config 737-900? How many intl config 757-200’s are there?
The p.s. flights are not affected by this move; only the regular domestic config planes are. My recollection is that United already cycled a couple of the oldest p.s. planes out of that part of the fleet and put “regular” 752s in as part of the retrofit process, making those the newest of the planes which are being kept from the sUA side of the operation.
Sorry to see them go. 24 F seats, mid-cabin lav, door 2 boarding were all nice features. But unless UA is ramping up deliveries, or redeploying some of the TATL 752’s, it does imply further domestic capacity reductions
Very sad. The 757-200 is my favorite domestic aircraft.
There was a good article couple years ago that shows struggle behind 737 vs 757 vs 320 choices: http://leehamnews.wordpress.com/2011/05/05/making-a-silk-purse-out-of-a-sows-ear-the-737-900er/
That is a good article, Nikolay. I actually linked to it in my original post (“one bit of research”). 🙂
I don’t really get UA’s logic with replacing many mainline aircraft with regionals… Keep in mind UA has stated they are going to start retiring the older Airbuses in the near future, so we are looking at a massive reduction in capacity [IMO a few percentage points is massive]. Delta is replacing regionals with mainline birds [MD 90s and 717s], what is DL seeing that UA is not seeing?
I will say, if UA thinks instead of having 180 seats with 70% of the customers on deeply discounted fares [S fare and below] with 30% higher yield customers and yielding a profit margin of XX for a given flight. Let’s put a 70 seater on that route and the % of cheap-o fare customers will shrink to 30% while sustaining roughly the same number of higher yielding customers, therefore we will see a much healither profit margin for that same flight. If that is their train of thought, I just want to say, it is not linear. Business travelers who are not price sensitive do, and will, book away from UA based on equipment [sub-standard service, prone to cancellations, lower level of comfort, etc.].
I used to enjoy regionals, but when I have found myself on those birds on longer trips, the stark contrast in the traveling experience is an eye-opener for me. Too many 3+ hour flights on RJs this year.
Totally agree with you…did 160 PQS this past year out of EWR…90 percent of my time is spent in the A concourse on those darn RJ’s…i’ve heard from my next door neighbor is that UA is trying to run them into the ground as they are accruing a TON of time on them. I guess its good that they’re trying to get rid of them; however, you and I both know you “rock in roll” in those with sub standard service. Routes like Newark to TUL, OKC, MSY, and JAX should never be on an RJ. I commute weekly out of CLT, we used to have a 737 500 on the route with a full first meal…obviously that went away, replaced by a 145..while US Air up’d their fleet to EWR with A321’s and A320’s….not saying US air is smart, but UA route and fleet management are really messing up.
Already seeing 739s making a lot of the west coast-Hawaii runs, especially KOA. It really is odd for me. When I grew up it was only wide-bodies to Hawaii (minimum a DC10) as there was no such thing as ETOPS at that time.
Sure, Mark, there were DC10s then. Also, airfares were much, much higher and fuel was much less expensive. Less competition on many routes, too. It was easier to operate less efficient planes in that environment.
FWIW, differences in savings likely due to ownership costs… I’m guessing these brand new 739ER birds command just a bit larger lease payments
I totally agree with Golfingboy that UA is deluded if they think they are going to pick up much of the high yield traffic on routes where they operate RJs and the competition operates mainline.
It’s not that I think the 70 and 76 seat RJs are uncomfortable. The newer e-Jets are comfortable, and even the UA configuration of the CR7 is OK (I dislike the AS version)… But the operational reliabilty sucks. And the customer treatment sucks (posted as ontime when the planned aircraft isn’t even expected to touch down by departure time, awful gate areas, etc.)
So other than people pushing to make their elite level, only a few are going to choose a UA RJ if VX or AS or WN or B6 or DL are offering mainline on the same route, and only UA’s elites might be captive. But the math that says there are only 30 high fare customers and we can put them on an RJ doesn’t work if those 30 high fare customers go elsewhere. With the poor operational reliability, who wants to take an inbound RJ to connect to an international flight? Esp. if you must get there.
The RJs need to be primarily on routes where there is only RJ service
The real question is whether the 70 seat plane – equipped with a first class cabin (such as it is on domestic F) – flying 2ish hour routes is going to be enough to influence passenger behavior versus a 717/MD80 or E90. I actually don’t think it will. If there are operational issues that’s a different story, but the planes themselves are actually quite comfortable to fly on. I’ll go out of my way to find the E90s where it is feasible.
Bringing 70 seaters in and retiring the 752s will likely force UA to put the 737s back on longer routes and take them away from trips like EWR-BOS and EWR/LGA-ORD. I don’t necessarily think that’s a bad thing. DL competes on ORD-LGA with similar eJets. AA may keep the 737s on the route or they may go E75s there. With the decent sized F cabin (meaning more upgrades) I can see plenty of UA elites happy to be flying on the E70s versus the A319s. Pending operational reliability, of course.
What will they eventually replace the TATL 752s with?
There is no good replacement for the 752 in the TATL market. That may well be where the best, youngest 752’s remain. Otherwise, you need to use a widebody aircraft
Are these just the legacy United 757-200s being retired, or are the legacy Continental 757-200s that are used domestically being retired too? Or are the legacy CO 752s all on transatlantic now?
All the legacy CO 752s have been in international config since well before the merger.
I believe the poster above was referring to the PMCO domestic 753. How do these fit into the picture? Are these newer than PMUA 752?
The 753s are not going anywhere as of right now. All of the 753s are actually newer than all of the 752s. They were delivered between 2001-2005 from what data I can find.
Really good analysis here Seth. I too wonder how the numbers will add up in term of capacity.
752 may cost $1300 dollars more to operate but if its paid for then it starts off the lease/purchase payment advantage. Additionally if there is an advantage in route utility such as being able to sub for a transatlantic or transcon wide body or increased payload off shorter runways or noise abated departures. Factor in these and you get a closer true cost. Lets say utilization is 350 hours a month and the lease payment is $375k dollars a month. That’s $1071 hr and now the only difference is $229 dollars an hour. If the 757 cost less per hour in maintenance now the 900 is more expensive if 757 carries an extra 100 revenue passengers then that’s an adjustment. Its more complex than just fuel burn.
Take a look at late January routes from EWR to SEA…changing equipment from 737 to 757-200…that is going to tick some guys off, especially with Delta increasing their SEA TAC presence…they have recently added lie flat flights from JFK to SEA. For a 6 hour flight from the Tri-State to SEA; let’s see, on a UA 757 i’ll get channel 8 for live ATC or a lie flat seat, with tv and wifi on Delta…not a hard decision..good job by United management once again pushing customers away from your product…