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Storage Figures Down In July As Airlines Seek Seats

Stable oil-price outlook suggests more of the same into 2020.

Global airlines are leaning more heavily on older aircraft to keep up with traffic demand, the latest capacity data from International Air Transport Association (IATA) suggest.

Global carriers parked 86 aircraft in July, the lowest total in "at least" three years, IATA says. Carriers pulled 125 aircraft from storage and put them back into service, compared to 104 in July 2016. The net addition of 39 aircraft accounted for most of the fleet growth during the period, as new aircraft deliveries in the month increased by just two, to 115, from July 2016.

The changes combined with other capacity tweaks meant that the number of seats in service in July 2017 grew 6.2% year-over-year.

Global traffic demand, measured in revenue passenger kilometers, was up 7.9% for the first six months of 2017, IATA figures show. This helped push load factors to a record 80.7% for the six-month period, boosting demand for lift. 

The OEMs are ramping up rates on their most popular models, including the Airbus A320neo and Boeing 737 Max families, to address long-term demand projections. Boeing earlier this month confirmed that it would boost 787 rates, from 12 to 14 per month, this decade. 

Meanwhile, production issues have meant delivery delays for several models, including A320neos and A350s, causing some operators to revamp short-term fleet plans and keep older aircraft flying.

Lower fuel prices are one reason older aircraft remain attractive for carriers. Global oil prices were trending down into August before hurricane season, and specifically Hurricane Harvey's direct hit on U.S. oil production and distribution facilities in the Gulf of Mexico and along the coast of Texas and Louisiana, disrupted operations. 

Despite the short-term price increase, the medium-term outlook is for prices to remain "relatively stable"—below $55/barrel for Brent crude—through mid-2020, IATA says.

TAGS: Airframe
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