Safety Gains New Clout in Airlines’ Decisions on Replacing Jets

A terrifying accident involving a Boeing 737 has stunned the nation’s airline industry and challenged one of its bedrock tenets. A 19-year-old 737 operated by Aloha Airlines partially disintegrated during a flight over Hawaii on April 28, sweeping a flight attendant to her death and injuring 61 passengers. The pilots managed to land the plane safely.

The incident galvanized the industry and brought more than 350 representatives from airlines, aircraft manufacturers, government agencies and aviation safety groups to Washington last month for a special conference, where the safety of older planes was hotly debated.

The Aloha disaster also focused attention on a longstanding, fundamental rule of the industry: Aging planes have always been replaced on the basis of economic factors, not safety considerations.

Lower fuel prices in recent years, for example, have led airlines to hang onto older jetliners, since it was no longer so urgent to replace them with more fuel-efficient aircraft.

The average age of U.S. jetliners is 12.53 years, up a sharp 21% from 1979, a year when oil shortages brought spiraling fuel prices. More than half the 2,767 jets operated by major U.S. carriers are 16 years old or older, according to Avmark Inc., an aviation consulting firm in Arlington, Va.

“If (planes) are properly maintained, we can fly them for an indefinite period,” said Joe Hopkins, a spokesman for United Airlines. “It’s really an economic decision as far as when you retire an airplane.”

Industry observers say recent orders for new aircraft provide pointed examples of the “economic life” rule:

- United, the nation’s largest carrier, recently placed an order with Boeing for 60 new 757s.

- No. 2 American Airlines ordered another 100 757s from Boeing to replace 33 737s acquired in its 1987 takeover of Newport Beach-based AirCal, as well as some of its own 727s.

The average age of the planes in United’s existing fleet is 13.6 years, while American’s aircraft average 10 years. The new orders will bring United’s average down to 11.6 years by the end of this year and American’s will fall to 9.4 years.

The purchases were huge even by jetliner order standards, costing United and American together more than $4 billion.

The airlines say the purchases were under study long before the Aloha accident and were based on such factors as reduced operating and maintenance costs. But in the wake of the 737 mishap, the pressure to update the nation’s commercial fleet grows ever stronger.

Robert Goodrich, a top official of the Federal Aviation Administration, said at the Washington conference that the agency will make a thorough review of inspection and maintenance programs for aging jetliners. The agency said additional testing techniques would be developed to determine the life span of a jetliner.

Several members of Congress also have sounded the alarm. Rep. Dan Glickman (D-Kan.), for example, suggested that the FAA buy old planes and test them to determine when an aircraft can no longer be considered safe.

Under the spotlight of such scrutiny, the safety issue may begin to color the economics of fleet replacement. As the costs of maintaining and insuring older planes surge, and litigation by accident victims and their families mushrooms, airlines may be forced to retire their aging craft sooner than anticipated.

“When the economics of it demands a change, (the airlines) will change,” said Wendell Gauthier, a New Orleans attorney who has represented plane crash victims.

The U.S. commercial airline industry paid a total of $373 million in insurance premiums in 1986, up sharply from $272 million in 1985, according to the Air Transport Assn., a Washington-based trade group. Figures for premiums paid on older planes aren’t available.

Of the 1986 total, the carriers paid $170 million in hull insurance, covering damage to aircraft, $158 million for passenger liability and $45 million for cargo insurance and other charges.

Payments to accident victims and their survivors by airlines and aircraft manufacturers are also on the rise. Some insurance underwriters estimate that U.S. carriers face potential liability of $1.25 million per seat on planes involved in crashes, according to the National Law Journal, a weekly newspaper published in New York.

The airlines insist that they are sticking to their traditional economic rules for putting old planes out to pasture.

“The basic feeling toward operating old craft has not changed,” said Pan Am spokeswoman Pamela Hanlon.

“Certainly, we have an open mind,” United’s Hopkins said. But he insisted that the airline hasn’t changed its policy.

If the airlines buy new aircraft, they would trim their operating costs by burning less fuel and cutting maintenance expenses. In addition, new models like the 757 need only two pilots in the cockpit instead of the three in many older planes.

The costs of buying new jetliners can be daunting, though--especially for some U.S. carriers that are financially strapped, plagued by labor troubles and easy prey to takeovers by investors or competitors.

Edward Starkman, an industry analyst for investment firm Paine Webber, suggested that airlines might begin to operate their aging jets fewer hours each day. The carriers are also likely to continue to emphasize maintenance and inspection of the older planes, he said.