Airlines and aircraft leasing companies will spend $300 to $1,250 a month to park and maintain unused planes in the desert rather than sell them for parts and scrap metal.
The so-called Desert Air Force currently numbers nearly 1,500 aircraft. In reality, only a third, 508 built after 1979, are good candidates to re-enter commercial service.
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Airlines plan to increase capacity by about 7% in 2004, to within a hair's breadth of what it was at the peak in 2000. In 2005, capacity might grow even faster.
New American CEO Gerard Arpey says the world's largest airline is "through running from competition with low-cost carriers."
Its capacity will grow at least 7% in 2004. To do that, it is re-installing two rows of seats in its B757s and A300s that were removed in 2001 to give passengers more legroom. It also will fly its planes more hours each day.
But American also is quietly making preparations to bring 28 McDonnell Douglas MD-80s and 14 Boeing 767s back into service earlier than the 2005 and 2006 time frame envisioned when they were parked in the desert. A decision has not been made, but American officials indicate that they are leaning toward an early return of the MD-80s, the first of which could be flying by summer.
United says its fleet plan won't be determined until it nears the end of its Chapter 11 bankruptcy process sometime next year. Industry analysts expect United to bring planes back from the desert to help fight encroachments by rival American and to combat low-cost carriers.
Other network airlines, some of which are still trying to get big labor concessions, aren't as far along in the process. But analysts say they all face the same competitive pressures pushing them toward defensive capacity increases. Most can, like American, squeeze more hours each day out of their planes to generate some extra capacity. But defending their market positions is likely to mean recalling planes from the desert.
Bernard Han, Northwest's chief financial officer, did nothing to calm analysts' fears during a conference call in October.
On the one hand, he said, "We do think that we ... need to be prudent about capacity growth in 2004. ... On the other hand, Northwest intends to vigorously defend our market share, as we see more aggressive capacity growth around us." Allen says the big carriers have little choice. "The low-cost carriers are all moving aggressively, and the big carriers will have to respond. They don't want to blink an eye and a year later have a big competitor" in markets they used to dominate.