Why are Old Cargo Planes OK?

[twistedenginestarter]

You rarely see a 747 Classic hauling round passengers. They've all be chopped in for newer more expensive 400s or 777s etc. So why are there loads of DC10s. 1011s and 747 Classics flying cargo all over the place? Why are they viable for cargo but not passengers?

[Intruder]

The boxes don't care about shiny paint and interior design. They also are more likely to "pay the freight" than fickle SLF looking for a cheap ride to Las Vegas. "Just in time manufacturing" NEEDS those boxes; the tourists don't "need" the ride...

It's also a form of recycling, just like the used car market. Airlines sell their old airplanes to get new ones. People who can't afford new airplanes buy old ones at a bargain price...

[vapilot2004]

Passenger carrying airlines have to consider the price of fuel, the cost of cabin re-fit and maintenance checks and public perceptions/marketing issues in the when-to-retire decisions they make.

On the cargo group side:
If the airframe has some cycles left in it, an old widebody is a money making proposition for freight haulers. Extra points scored for a frame previously operated and maintained by one of the majors. These can come with an inventory of good but cheap spares too.

By the way, your list of moldy oldies is incomplete without the A300/A310 series. There are quite a few of these old gals still lumbering about the skies full of cardboard boxes and what-not.

[john_tullamarine]

Driver is the depreciated hull cost and bottom line sums ...

[Ultranomad]

...in fact, some aircraft in cargo variant remain in production long after they have been retired from passenger service. The very last A300 was delivered to FedEx only a year ago.

[smith]

I remember in my ATPL's something along the line of passenger aircraft can only be used for so many cycles, however for cargo operations the a/c can go on for more cycles hence the hulls are sold to cargo operators at the end of their passenger life.

[twistedenginestarter]

"Driver is the depreciated hull cost and bottom line sums"

So why is that a driver for cargo but not for passenger?

Anyway let's consider that. If a hull is depreciated then it's cheaper for the company that currently owns it. Once it goes out on the open market it reconnects to its market value. If that value is low it is because the hull is unattractive to prospective buyers. Now why would the original owner or other passenger operators find the price unattractive whereas the cargo operators don't?

The answers so far are largely about old planes, not why old planes are ditched by passenger operators.

I have just one theory - older planes are less reliable, and the costs of delays for passenger operations are much higher than cargo.

I can't see how newness appeals to passengers. 747-100s were soon dumped for 200s and then 400s. Could passengers really tell the difference? The reasons we know were first fuel economy and then two-crew. Why don't these factors push cargo operators to new kit?

[john_tullamarine]

I remember in my ATPL's something along the line of passenger aircraft can only be used for so many cycles

I suggest not .. with limited exceptions over the years, the standards for pax/freight are the same.

So why is that a driver for cargo but not for passenger?

Competitive market pressures ..

(a) priority/high yield freight goes in the pax hold

(b) oversize (especially high priority/high value) freight may warrant a one-off charter

(c) the remainer is in competition with marine (international) and bitumen Boeing (domestic) transport

The accounting penalty of needlessly high capital hulls is not attractive .. however, as the price of fuel increases, the breakeven point will move toward newer, more fuel-efficient aircraft.

I guess that it's the same in other countries .. in Australia for as long as I can remember, priority airfreight will go via bitumen Boeing if the freight company can make the delivery .. there was a celebrated road accident years ago where a particular major freight company suffered the embarrassment of having a truck load of overnight air freight strewn about a major interstate highway.

[Deltabravowhiskey]

When you load an 747 Classic (or 400F/-8F) with 106,000-140,000 Kgs of payload and charge per Kilo then you begin to understand why PAX hauling is a money loser.

Also what PAX hauler can stack the people 10' high and cram them into organized containers eliminating wasted money making volume?

http://www.boeing.com/commercial/747family/images/cross_sections.jpg
http://www.boeing.com/commercial/747family/images/freighter_side_cargo_door.jpg

http://www.boeing.com/commercial/747family/images/freighter_deck_pallet.jpg
http://www.boeing.com/news/feature/paris07/assets/072007_7478_pas.pdf

DB

[TeachMe]

From a previous thread somewhere here, I remember it to be something like capital cost vs operating costs. Older jets have higher operating costs but much lower capital costs. Thus the economics for a plane that is only flown a few hours a day on average (no I cant define few!!) favours higher operating costs and lower capital costs. The more the plane is flown per day the more important operating costs become and thus favouring newer planes.

[barit1]

It's feasible for older a/c (the Orbis DC-10, before that the DC-8) to be converted to portable clinics or surgical hospitals because they are still structurally sound, expensive on fuel per hour, but flown very few hours per year. Ditto other special rigs, engine testbeds, scientific vehicles, etc.

The list of retired aircraft converted to engine testbeds is a very long one. :ooh:

[GlueBall]

Actually, the 744s started life in 1988, well before the last Classics came out of the factory in 1991; so in fact there are older 400s still alive and well today than classics. If you look carefully, then you will see a lot of classic -300s still being operated by major carriers, including SV, QF, GA, AI, . . . to mention a few.

[742]

From a previous thread somewhere here, I remember it to be something like capital cost vs operating costs. Older jets have higher operating costs but much lower capital costs. Thus the economics for a plane that is only flown a few hours a day on average (no I cant define few!!) favours higher operating costs and lower capital costs. The more the plane is flown per day the more important operating costs become and thus favouring newer planes.


A good example of this is Atlas, where a fleet of Classics provides charter services while a fleet of -400s operate scheduled service. It is all about utilization, and the balance of fuel burn, maintenance and capital costs.

[YRP]

From a previous thread somewhere here, I remember it to be something like capital cost vs operating costs. Older jets have higher operating costs but much lower capital costs. Thus the economics for a plane that is only flown a few hours a day on average (no I cant define few!!) favours higher operating costs and lower capital costs. The more the plane is flown per day the more important operating costs become and thus favouring newer planes.

A good example of this is Atlas, where a fleet of Classics provides charter services while a fleet of -400s operate scheduled service. It is all about utilization, and the balance of fuel burn, maintenance and capital costs.


Thanks for the explanation guys. This is something I've always wondered about as well.

[FougaMagister]

Anton K - the last A300 delivered to FedEx a year or so ago was an A300-600, as are all A300s built post-1984 if I'm not mistaken. A vastly different beast to the original A300, and one which is still in PAX ops in some numbers (LH, Thai, American, Monarch, etc). There are however, a great many A300B4s still flying around as freight dogs, even with main players such as EAT/DHL etc.

john_tullamarine is right: the number of cycles on an airframe is (as the name implies) a structural limit independent of the type of operation. The type I fly is limited to 75,000 cycles, regardless of whether it is used for PAX or cargo ops. Because they age well, the manufacturer is studying extending this to 105,000 cycles. So I just might be flying the same type until retirement...

Cheers :cool:

[twistedenginestarter]

If you are saying cargo operators find older planes equally cost effective, or cheaper, because they have lower utilisation, then that begs the question why they fly less. If passenger operators like to keep their aircraft in the air, are cargo operators lazy or just thick. Surely they should buy new aircraft, get their utilisation up and thereby follow the pattern the passenger airlines have found to be optimal?

There have been various statements about why you might choose an older airliner but none explain why this seems mainly to apply to cargo and not passenger.

[SNS3Guppy]

If you are saying cargo operators find older planes equally cost effective, or cheaper, because they have lower utilisation, then that begs the question why they fly less. If passenger operators like to keep their aircraft in the air, are cargo operators lazy or just thick. Surely they should buy new aircraft, get their utilisation up and thereby follow the pattern the passenger airlines have found to be optimal?


Freight hardly has lower utilization.

My operation sees the airplanes in continuous use. One crew gets out, another crew gets in, and the only time the aircraft sits on the ground is long enough to be unloaded, loaded, and fueled. Ride-on mechanics live aboard. The airplanes make a global circuit every two and a half to three days, and keep doing that until either required to stop for a field maintenance condition, or the aircraft returns to the mx base for a scheduled inspection or service. Otherwise they're continuously attended in the field and keep flying.

Hardly lower utilization.

Our aircraft are a little older, a little higher time, and not as efficient as newer aircraft of the same type which have entered passenger service. We get the airplanes when the passenger operations are done with them. They're less expensive than a new aircraft. With lower acquisition cost and lower overheads due to low or no aircraft payment, trip profit isn't diminished by large aircraft lease or loan payments. Many systems are removed or deactivated that might have been for passenger convenience. The aircraft is modified to carry freight. Freight doesn't care if the airplane looks older or tired. We don't have to polish paint and replace with fresh; it's a working airplane that largely flies in the dark, largely behind the scenes, and has only one mission...get the freight there.

Passengers do indeed prefer newer aircraft, and prefer clean, shiny airplanes without wrinkles, without a great deal of wear. They feel safer, they're more inclined to buy a ticket on the airline on which they feel safer, and overall maintenance costs may be lower in the long term.

For a freight operator, the acquisition of the airplane may be it's last life; it may serve here until it's out of cycles. I'm not certain I understand the dilema here. The operator elects to use the aircraft the operator elects to use. Why concern yourself what aircraft that is? It's a business decision.

[Roadtrip]

The only reason you see some old 747 classics still flying at $147 oil is that there are no other newer freighters to take their place. Also, as the price of oil goes up, the price per hour that the ACMI operators can get for the classics goes down because the customer pays for the fuel. I think that a classic can only garner about $4k per flying hour. After paying for maintenance, insurance, any lease costs, and the crew, the profit margin must be razor thin.

For the ones remaining, you usually see them get the bullet when they come up for expensive heavy checks.

[org]

quote<Surely they should buy new aircraft, get their utilisation up and thereby follow the pattern the passenger airlines have found to be optimal?>quote

I'd have to say following the business plan of the passenger airlines would hardly be the way to go;)

[OverRun]

Cost is the thing. Too high a market value of the plane before conversion will limit their prospects to passenger carriers. The basis for bringing an aircraft onto the cargo fleet is that the total cost (combined purchase, conversion and any necessary maintenance) is low enough to be able to offer a low enough lease rate so that the cargo operator can make money.

Unsuitable aircraft for cargo include earliest variants (where the weights are lowest because the designer is at their most conservative for the earliest planes into service), those with lower maximum take-off weight (MTOW), and with payload-range restrictions. The oldest aircraft are less desirable because they have a limited operating life. However MTOWs can often be increased during freighter conversion by incorporating service bulletins that might tip the balance for a particular aircraft type towards conversion. A higher MTOW improves the operating economics of any freighter.

And a significant catalyst for any successful conversion programme (pax to cargo) is the availability of meaningful blocks of standard aircraft, and not just low values. There are usually great (and low value) aircraft types available, but they are in units of ones and twos and not worth the cost of the convertor setting up for the conversion.

[twistedenginestarter]

The operator elects to use the aircraft the operator elects to use. Why concern yourself what aircraft that is?

Sometimes these mysteries reveal distortions. In the UK you can lease new executive German cars more cheaply than you can run a second hand one, but that's because the manufacturers will sell cheaply to fleets but not to you. They want to keep residuals up to use the retail market to subsidise the fleet market. It's not simple economics; it's a deliberate distortion and if you understand it, you can appreciate if and how it might unravel to your advantage, or disadvantage. Then there may be tax reasons.

Current series aircraft always look to me about the same as old ones. I can't believe passengers can tell the difference if I can't. The insides are refurbished on a regular basis - it's always going to be cheaper to do a refurb than buy a new hull.

Since it would appear utilisation is not the key, I can only think it's to do with financing. Maybe it's the same as cars. Big airlines can afford to run new stuff because they get deals that are deliberately denied to the outsiders to keep up the desired pattern of resale values. Incidentally in the car world it's not to do with straight volume discounting, otherwise people would pass on the savings to some extent. It's more like a cartel.

[john_tullamarine]

However MTOWs can often be increased during freighter conversion

and, for amplification, if the intended scenario involves shorter range, on a medium to longer range hull ... where MZFW becomes limiting .. rescheduling the fuel usage can result in an STC to increase the MZFW to the point where MLW becomes the limitation more often than not .. which can help the payload materially over a shorter sector operation ... eg Ansett did this with the Electra passenger to freight conversions many years ago as a lot of the operation was shortish range (Australian east coast) ... generally TOWs were comparatively low (and the bird went like a cut cat - chaps ought not to be allowed to have so much fun) .. but then we would head off to NZ or similar at max gross (around 52T if I recall correctly) and the old girl tended to be a bit of a dog.

[PanAm707]

twistedenginestarter,

at least one passenger carrier – Allegiant in the USA – uses rather old aircraft (MD-80) and a low utilization strategy. And Allegiant is profitable although with a different business model compared to other LCC.

SEC Info - Allegiant Travel CO - 8-K - For 11/16/07 - EX-99.1 (http://www.secinfo.com/d11MXs.u2HXm.d.htm)
(browse down and you find more info why Allegiant has chosen the MD-80 family)

[john_tullamarine]

Having been tied up with DC9 family freight operations in the past, the numbers just stack up for that sort of payload region ...