American Airlines Prepares To Retire Its Aging MD-80 Fleet

For the past several decades, McDonnell Douglas MD-80 jets have been a common sight at airports around the world (and especially in the U.S.). However, with production having ended in 1999, even the newest MD-80s are close to retirement age. Furthermore, new models like the Boeing (NYSE:BA) 737 MAX and Airbus A320neo are dramatically more fuel-efficient -- not to mention a lot quieter.

As a result, American Airlines (NASDAQ:AAL), by far the biggest MD-80 customer, has been planning to retire its final MD-80s in 2019. Earlier this week, the airline announced that it had scheduled its final MD-80 flights for Sept. 4. This will leave Delta Air Lines (NYSE:DAL) as the only U.S. passenger airline operating MD-80s.

The MD-80 was American Airlines' workhorse jet

American Airlines was the first major customer for the MD-80. After getting its first handful of MD-80s in 1983 on a bargain deal from a desperate McDonnell Douglas, American used the jet to power its rapid growth during the 1980s and early 1990s.

In total, American Airlines ordered 260 MD-80s. Its 2001 merger partner, TWA, was also a major MD-80 operator. As a result, by the end of 2001, American had 362 MD-80s, accounting for 41% of its total mainline fleet. That also represented more than 30% of the 1,191 MD-80s built over the lifetime of the program. No. 2 customer Delta Air Lines ordered a comparatively modest 120 MD-80-series jets.

These MD-80s served the bulk of American Airlines' domestic mainline routes. As recently as 2011, American was still operating more than 200 MD-80s. However, in recent years, the carrier has undertaken a massive fleet renewal project, replacing older aircraft with brand-new jets from Boeing and Airbus.

By the beginning of 2019, American Airlines was down to just 30 MD-80s and planned to get rid of the rest by year-end. On Monday, the airline revealed that it will retire the final 26 MD-80s on Sept. 4, just after the end of the summer peak travel season. The final flight -- sentimentally numbered AA 80 -- will depart the airline's Dallas-Fort Worth hub at 9 a.m. on that date and arrive in Chicago at 11:35.

There's probably a big caveat

There's still a chance that American Airlines will need to revise its timeline for retiring its last MD-80s. It's no coincidence that the scheduled retirement date of Sept. 4 is the same day that the carrier plans to put its Boeing 737 MAX fleet back into service. American's mainline fleet is set to shrink from 956 jets at the beginning of 2019 to 942 -- including 40 Boeing 737 MAX 8s -- by the end of the year, mainly due to the MD-80 retirements. There's no way that the airline can fly its full schedule this fall with no MD-80s if the 737 MAX fleet remains grounded.

While American Airlines executives had previously expressed confidence that the 737 MAX would resume service by August, CEO Doug Parker recently acknowledged that the plane's return could be delayed to October. If anything, that risk continues to rise, as the FAA revealed this week that it has identified a new issue with the 737 MAX that Boeing will need to address prior to scheduling certification test flights.

American Airlines could choose to make deep cuts to its schedule if the 737 MAX isn't ready by Sept. 4. However, it would probably be more economical -- and cause customers less disruption -- to keep the MD-80s flying for a little while longer in that scenario.

Delta's MD-80s are headed out the door, too

While the 737 MAX grounding is dragging on longer than expected, it's still quite likely that the type will be certified to resume service sometime in 2019. That will allow American Airlines to retire its final MD-80s before year-end. The MD-80s will be the first of several aircraft types to depart its fleet over the next several years as part of an ambitious fleet simplification effort.

This will leave Delta Air Lines as the only significant MD-80 operator in the U.S. As of the end of 2018, Delta had 84 MD-80s in its fleet, averaging 28 years of age. Not surprisingly, it plans to retire all of these jets by the end of next year.

Indeed, Delta Air Lines also decided recently to accelerate the retirement of its MD-90 fleet due to soaring maintenance costs. The MD-90 was an upgraded derivative of the MD-80 that never caught on with airlines. Delta still has several dozen in its fleet, but they are likely to be replaced within the next two years.

Thus, by the end of 2021, the storied McDonnell Douglas brand will have disappeared from the U.S. air travel market. There may be a bit of nostalgia from aviation enthusiasts, but upgrading to modern jets will be critical to future profit growth at American Airlines and Delta Air Lines.

This article originally appeared in The Motley Fool.

Adam Levine-Weinberg owns shares of Delta Air Lines and is long January 2020 $20 calls on American Airlines Group. The Motley Fool owns shares of and recommends Delta Air Lines. The Motley Fool has a disclosure policy.