NYTimes.com Article: Airlines' Unwanted Fleet Grows in the Desert

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This article from NYTimes.com
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Another NY Times screwup. Note that they allege that AA's F100s are ex-TWA.

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Airlines' Unwanted Fleet Grows in the Desert

June 7, 2003
By EDWARD WONG






MOJAVE, Calif. - No better barometer of the fortunes of the
airline industry exists than 1,200 acres of parched brown
earth here, baking at 102 degrees.

Row upon row of jetliners sit idle in three lots, their
engines sealed with silver or black Mylar, their rudders
rising from the flat desert like shark fins protruding from
an ocean's glassy surface.

Rattlesnakes slither in the shadows of nose cones and
tortoises inch their way past landing gear. A yellow school
bus carrying a dozen mechanics barrels between planes,
kicking up dust.

About 230 jets have been consigned to this purgatory, a
storage and maintenance yard operated by Avtel Services.
That number is four times what it was before the terror
attacks of Sept. 11, 2001. When the airline business is
poor, the money here can be good, and the general manager,
Justin Loucks, says his business will only get better.

"I don't think we've seen the end of the bankruptcies in
the U.S.," Mr. Loucks said as he stared out the window of
his second-floor office at the field of planes. "Several
companies are on the brink."

Avtel has 50 customers from around the world, and many have
parked their multimillion dollar assets on Mr. Loucks's
scorching front yard. There are silver Fokker 100's from
the ailing American Airlines, cherry red Boeing 737-200's
from US Airways' failed Metrojet venture and hulking blue
747's from KLM, the Dutch airline. About 70 percent of the
planes are from lessors and the leasing arms of companies
like Bank of America and General Electric, the rest from
the airlines themselves.

The ebb and flow of planes here serves as a gauge of both
industrywide health and the strength of individual
airlines. There are other indicators of the state of
airline economics as well. For instance, Avtel is getting a
flood of résumés from mechanics as airlines wrest
concessions from unions and lay off workers, officials here
said.

Privately owned by the Telford Group, which is based in
Bangor, Me., Avtel does not have to report financial
numbers, though it did make a profit in the last five
quarters, said Vern Alexander, the director of marketing.

Before the Sept. 11 attacks, about 80 percent of Avtel's
revenue came from performing heavy maintenance checks on
planes, and only 20 percent from storage and upkeep, Mr.
Alexander said. Since then, those percentages have
reversed.

The air park here, at 3,000 feet above sea level, is the
largest of five lots - all owned by different companies -
that are scattered across Southern California, Arizona and
New Mexico, according to Back Aviation Solutions, an
airline consulting firm. The second largest, 60 miles to
the southeast in Victorville, Calif., had 168 planes as of
May 22, up from 77 before the Sept. 11 attacks. The third
largest, in Roswell, N.M., had 145 aircraft, up from 16
before the Sept. 11 attacks.

A total of 734 airplanes were in long-term storage as of
May 22, according to Back Aviation.

Airlines have been parking jets to trim a surplus of seats
in the air. Available seat miles among major airlines, a
measure of capacity, were down 6.5 percent in April from
April of last year, and down nearly twice that much in May,
according to the Air Transport Association, the industry's
main trade group.

"We started seeing parking of airplanes, so we aggressively
went after those customers," said Trevor Van Horn, the
chief executive of Evergreen Air Center, a privately owned
company that is storing more than 100 planes in Marana,
Ariz. Last year, he said, Evergreen had its second-largest
profit in a decade.

Michael Allen, the chief operating officer of Back
Aviation, says the parking of planes might slow in the
summer - the busiest travel season - then pick up again.

Here in Mojave, the number of stored planes reached a peak
of 310 last August, Mr. Loucks said. It has dropped by 26
percent since then, but not because the big airlines in the
United States are returning their jets to service.
Generally, the aircraft - many of them 25 years old - are
being sold to airlines in developing countries.

It is a buyer's market for planes. A 737-200 that would
have sold for $3.5 million to $5 million three years ago
goes for less than $1.5 million now, Mr. Loucks said.

A drive around the lot gives a firm sense of the
misfortunes of some of the industry's biggest players.

To trim costs at the largest airline in the world,
American, part of the AMR Corporation, has been trying
desperately to winnow the variety of planes in its fleet,
which accounts for the 16 silver F-100's sitting in the lot
called Area 3. American has contracted with Avtel to store
74 of the aging planes, which were acquired when American
bought Trans World Airlines two years ago, Mr. Alexander
said.

Gerard J. Arpey, American's new chief executive, has said
that American still may have to file for bankruptcy
protection, despite the $1.8 billion in annual labor
savings it has obtained from workers. A filing by American
could add as many as 60 planes to the lot here, Mr. Loucks
said.

When National Airlines shut down last November after two
years in bankruptcy court, Avtel received eight 757's
within two days. Aircraft leasing companies hired flight
crews to fly the planes from National's base in Las Vegas
to various air parks. "It looked like Saigon on the last
day of the war," Mr. Loucks said, adding that half the
planes have been leased out again.

Aircraft are here from many other companies that are
struggling through bankruptcy or met ignominious ends: Air
Canada, the single largest customer here, with 29 planes;
Hawaiian Airlines, whose DC-9's have been bought by an
engine broker in Florida; and Swissair, now defunct, its
distinctive white cross on a red field still painted on the
tailfins of MD-11 jets.

Though Avtel has a contract with Southwest Airlines, that
company - which has remained profitable through the
industry's deep slump - has stored jets here only once.
That exception involved 19 brand-new 737-700's that
Southwest took delivery of from Boeing right after the
Sept. 11 attacks, Mr. Alexander said. Those planes have
since been put into service. But as Southwest updates its
aging fleet of 737-200's, it will start parking the old
jets here, he added.

A plane put into storage generally goes through three
stages: preparation, which includes covering the engines
and taping all cracks (at a cost of about $12,000 for a
narrow-body jet); monthly maintenance and engine checks
($1,000 or so a month); and restoration to service,
essentially reversing everything done in the first stage
(another $12,000).

Avtel employs about 350 people, mostly mechanics. The
Federal Aviation Administration has two officials on the
ground to ensure quality, and every major customer has a
representative here.

Mr. Alexander says he has talked with several carriers,
including United Airlines, about assigning mechanical work
to Avtel. United recently won concessions from its
machinists' union that allow the airline to farm out more
of these duties. Other airlines are expected to try to
negotiate similar terms with their unions, which could be a
boon for companies like Avtel.

There have been recent though rare instances of airlines'
returning to service the planes that they stored here.
After US Airways filed for bankruptcy protection last
August, it parked dozens of planes, Mr. Loucks said. The
airline left bankruptcy court in March, and all but seven
planes are flying again, he added.

In the first lot, a towering 767 from British Airways
stands with its doors open. Mr. Alexander said that the
long-haul plane - its tail painted with colorful geometric
designs conceived by the South African artist Emmly
Masanabo - would go back into service in mid-June, after
having languished here for about 16 months. Workers will
take two weeks to prepare it.

"There definitely is a good feeling in seeing an aircraft
taxi or take off that you had in storage," he said. "An
airplane is only alive when it's in flying condition."

But for now, most of the other planes will remain in limbo.
The tortoises crawling across the dirt are putting in more
miles these days.




http://www.nytimes.com/2003/06/07/business/07AIR.html?ex=1055999013&ei=1&en=16253482117f46f8


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