Low-cost airlines are cutting back on new plane acquisitions due to a number of factors. With the recent global pandemic, the air travel industry has seen a significant decline in passenger traffic, affecting the financial stability of several airlines. As a result, they are reducing expenditures on new aircrafts to maintain monetary stability.
One major area where low-cost airlines are making efforts to cut back includes delaying or canceling orders for new planes. Several airlines have been negotiating with manufacturers like Boeing and Airbus to push back deliveries and stretch out payment schedules for new aircrafts. This is mainly due to the pressure of shrinking revenue and increasing debts due to lessened travel demand.
Furthermore, the airlines are also opting to extend the life of existing planes instead of purchasing new ones. Despite older planes being less fuel-efficient, the cost savings from deferring plane acquisitions make it a viable strategy.
In addition to this, lower capacity need is another reason for less spending on new aircraft. With current restrictions on travel and decreased passenger confidence, airlines do not have the requirement for excess capacity. Hence, airlines are not only deferring the acquisition of new aircraft but also retiring old and larger planes earlier than planned.
Lastly, airlines are also cutting back on costs by focusing on operational efficiences like improving fuel efficiency, increasing direct routes to reduce flight time, and lightweighting the plane interiors to reduce overall aircraft weight.
In summary, low-cost airlines are employing several strategies including delaying or canceling new plane orders, extending the life of existing aircraft, retiring old planes earlier, and enhancing operational efficiencies to cut back costs in response to the current challenging economic scenario facing the aviation industry.
