From: firstname.lastname@example.org (Ed Hahn) Organization: The MITRE Corporation, McLean, Va. Date: 22 Mar 94 09:52:41 PST References: 1 2
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In article <airliners.1994.1027@orchard.Chicago.COM> email@example.com (John DiMarco) writes: Anybody care to comment on the financial implications of modifying older 727s rather than replacing them outright? ---- Well, for one airline, the financial considerations they undertook when considering retiring the B727-100 and -200 fleets hinged on three things: 1) Windshear Detection Equipment retrofit (FAR 121.358) 2) Traffic Alert and Collision Avoidance System retrofit (FAR 121.356) and 3) Stage III noise regulations (can't recall the exact FAR) Nos. 1 & 2 were required on all airliners (more than 30 seats) by December 30, 1993. The ballpark cost of retrofit per aircraft for Windshear is 40K(USD), and for TCAS is 150K+(USD). Number 3, Stage 3, is required in 1999. Basically, to meet Stage 3 noise regulations, the current engines (JT8D-17s et al) must be modified in some way, or be replaced. This, of course, is VERY expensive (hundreds of thousands to millions of USD). Earlier posts regarding the Valsan conversions have detailed what is involved here. Offsetting the cost is the fact that the B727 can be a very useful aircraft on some routes. The airline that I am familiar with operated 125 B727-200s in 1992, and is slowly retiring the older aircraft so that there will be about 67 of them left by 1997. The main reason they are hanging on to them are that they are VERY profitable on Caribbean routes because: 1) Fairly good takeoff performance. 2) Good payload carrying capacity (-200A version), especially when you consider that flying over the Caribbean requires HF radios and full overwater crash survival equipment (rafts, etc). 3) Three engines, which is useful for avoiding some of the hassles of trying to fly overwater with only two engines in a small aircraft (i.e. MD80 class). Therefore, this airline will continue to operate the B727-200 until 1999, when they will retire the remaining 67. The costs of reengining and aging aircraft modifications will make further service not cost effective. It should be noted that there was some concern at this airline about which aircraft was going to replace it on these profitable routes. BTW, the airline retired the last of its -100s before the end of 1993. The reduced payload capacity of the -100 made it not cost effective for TCAS/Windshear retrofit. Note that this was the case for only one airline, and that the plan was pretty firm at the time I left. Furthermore, this airline was in good financial shape, and has plenty of brand new aircraft on the delivery schedule, so they weren't hurting for seats. Just one point of view... ed //////// Ed Hahn | firstname.lastname@example.org | (703) 883-5988 \\\\\\\\ The above comment reflects the opinions of the author, and does not constitute endorsement or implied warranty by the MITRE Corporation. Really, I wouldn't kid you about a thing like this.