Low-cost airlines often need to find ways to cut back on expenses in order to maintain profitability. Due to the high costs associated with purchasing and maintaining new planes, many of these airlines have decided to cut back on their aircraft replenishment.
Instead, they are opting to lease aircraft or buy older, used planes that are still in good condition. Leasing allows airlines to operate planes without the need for a large, upfront capital expenditure. Additionally, buying used planes can provide significant cost savings over purchasing new ones, as the value of an aircraft significantly depreciates once it leaves the factory.
Furthermore, some airlines are also delaying the delivery of the new planes they had already ordered before the pandemic hit, to manage their financial resources better. Airlines like Southwest and Ryanair have used these strategies in the past.
This does not mean the airlines are compromising safety. Whether new or old, all commercial aircraft must adhere to strict safety regulations and undergo regular maintenance checks.
The goal is to manage resources better, reduce operational costs and still provide passengers with an effective service. The airline industry has been heavily impacted by the Covid-19 pandemic and economic downturn, making such cost-saving strategies critical for survival.
Where are low-cost airlines cutting back now? New planes.
Low-cost airlines often need to find ways to cut back on expenses in order to maintain profitability. Due to the high costs associated with purchasing and maintaining new planes, many of these airlines have decided to cut back on their aircraft replenishment.
Instead, they are opting to lease aircraft or buy older, used planes that are still in good condition. Leasing allows airlines to operate planes without the need for a large, upfront capital expenditure. Additionally, buying used planes can provide significant cost savings over purchasing new ones, as the value of an aircraft significantly depreciates once it leaves the factory.
Furthermore, some airlines are also delaying the delivery of the new planes they had already ordered before the pandemic hit, to manage their financial resources better. Airlines like Southwest and Ryanair have used these strategies in the past.
This does not mean the airlines are compromising safety. Whether new or old, all commercial aircraft must adhere to strict safety regulations and undergo regular maintenance checks.
The goal is to manage resources better, reduce operational costs and still provide passengers with an effective service. The airline industry has been heavily impacted by the Covid-19 pandemic and economic downturn, making such cost-saving strategies critical for survival.
