737-500's Going Bye Bye?

[maddogdriver]

Just heard that the -500's will be parked at the end of the summer. Anyone else hear this ?????

 

[737nCH11]

I think that was the plan.

 

[BigRed1]

Hey Everyone:

Got a question. I was listing for a flight the other day to PHL from ORD and the configuration on the 735 was 8 and 96. I did another listing from COS to DEN on another UAL 735 and it showed 8 and 102. The first listing to PHL was on July 13. The second one to DEN from COS was on July 19 if that helps. My question is:

Is UAL adding an extra row to their -500s, and if so, would they be going through the trouble if they are just gonna get rid of them as the previous posts suggest?

Thanks.

 

[Bear96]

Hey Everyone:

Got a question. I was listing for a flight the other day to PHL from ORD and the configuration on the 735 was 8 and 96. I did another listing from COS to DEN on another UAL 735 and it showed 8 and 102. The first listing to PHL was on July 13. The second one to DEN from COS was on July 19 if that helps. My question is:

Is UAL adding an extra row to their -500s, and if so, would they be going through the trouble if they are just gonna get rid of them as the previous posts suggest?

Thanks.

You're probably seeing a mainline 735 (96 in Y) and an ex-Shuttle 735 (102 in Y). The Shuttle configs are still flying around, especially the further west one goes.

 

[Busdrvr]

just to add a little.... The 737-500 "shuttle" config had something like 112 Y seats. That many more seats was possible for two reasons, the first is the obvious, no econ plus. In addition, the company took out the ovens and slimmed down the galley space in front. the rational was that on short shuttle routes, there wouldn't be time for hot meals anyway. Post 911, UAL, on the advise of Monty Brewer who then left to lead another airline into BK (AC), shut down "Shuttle". UAL then set out to change the shuttle birds back to a mainline config. They pulled a row to create Econ plus, but did not re-install ovens. Long story short, same legroom as "mainline", but differant Galley. You can tell an ex Shuttle bird by the lack of a 1L closet.

 

[WorldTraveler]

The 735s are 2/3 owned so grounding them would be costly. It would make far more sense to ground the 733 fleet which is older and predominantly leased. 735s are obviously more costly to operate on a per seat basis, however.

Five UA leased 735s have been offered for lease assumption in Aviation Daily over the past week or so.

 

[Busdrvr]

"The 735s are 2/3 owned so grounding them would be costly. It would make far more sense to ground the 733 fleet which is older and predominantly leased. 735s are obviously more costly to operate on a per seat basis, however.

Five UA leased 735s have been offered for lease assumption in Aviation Daily over the past week or so."

i liked the jet, but there is a reason that there isn't much of a market for them. FWIW, they have already taken a huge "book value" hit over a year ago. UAL is planning on cutting back the guppy fleet, and I think with the lease rates they are getting on the -300, which are also basically worthless on the resale market, they'll still park the 500 first. the age isn't a factor since in the grand scheme of things neither fleet will get even close to it's airframe lifespan, and I'm willing to bet some of the engines on some of the 300 came on a 500 and vice versa. they are for practical purposes identical when it comes to the cockpit and systems. If there is one thing UAL did right, it's fleet standardization (well except for the 757-767 fleets... 😀 )

 

[lpbrian]

How many are there in fleet now?

 

[WorldTraveler]

The book values of the 735 and 733s have taken a hit but there is secured debt attached to both of those fleets. Dumping them says UA will be a smaller carrier (the 733s and 735s are half of UA’s non-757 narrowbody fleet). UA’s ability to negotiate with other leasing companies will get much more difficult and its leasing and borrowing costs will increase if it starts defaulting on secured debt (such as what is behind the 735s and 733s) instead of just rejecting leases.

As of 12/31/03, there were 57 735s in UAL's fleet, if my recollection of the annual report is correct.

 

[pk45cu]

The 735s are 2/3 owned so grounding them would be costly. It would make far more sense to ground the 733 fleet which is older and predominantly leased. 735s are obviously more costly to operate on a per seat basis, however.

Five UA leased 735s have been offered for lease assumption in Aviation Daily over the past week or so.

It's cheaper to ground owned and fully depreciated 735s than to park a leased 733. With the latter, you continue to take the rental cost hit to the income statement is the lease term still has some time to go.

 

[JS]

It's cheaper to ground owned and fully depreciated 735s than to park a leased 733. With the latter, you continue to take the rental cost hit to the income statement is the lease term still has some time to go.

You're comparing apples to oranges. I suppose it's possible, but I highly doubt, that a leasing company would lease out an aircraft with a book value of zero.

 

[WorldTraveler]

I find it hard to believe that the 735s are fully depreciated since they are only 10 years old. Commercial airplanes are typically assumed to have a 15-20 year life.

 

[mweiss]

I find it hard to believe that the 735s are fully depreciated since they are only 10 years old.

MACRS permits a write-off period of 7 years for the business use of commercial aircraft under FAR Parts 121, 125 and 135, or other commercial designations.

 

[WorldTraveler]

Of course it's permitted but few airlines do it. I'll bet if you check UAL's 10K you won't find any aircraft assets depreciated over less than 10 years.

 

[mweiss]

Of course it's permitted but few airlines do it.

Why on earth wouldn't they? It's free money!