Moves by US carriers to rethink their fleet strategies and route networks, and retiring more aircraft than usual, will likely accelerate fuel efficiency improvements, which Delta and Southwest are best placed to capitalise on, according to analysts at Cowen.
“Both Delta and Southwest are relative winners in our analysis as they have the flexibility to replace inefficient aircraft with shorter distance & more efficient aircraft that fit with the demand backdrop and have large near-term order books with a high likelihood of delivery by the end of 2021,” said Cowen in a note.
Cowen said that it continued to believe the total US airline fleet would shrink by 21% as a result of COVID-19 “demand destruction”, but this would also result fuel efficiency gains in the region of 2.6% at fleet level, compared with 2019 fleets.
“We expect significantly higher fuel burn savings following 2021 as OEMs correct production delays, the MAX is re-certified, and the demand picture improves enough for the airlines to let the emergency brake off on capital spending. The aircraft on order, mostly MAX and NEO generation, offer huge efficiency improvements over previous generations…We expect the largest fuel efficiency gains will likely be at Delta [Airbus] and Southwest [Boeing], who both have large orders to replace outdated fuel-burning aircraft,” Cowen said.