A321T

[WorldTraveler]

Just curious if you are an expert on everything?.... I've never seen someone babble on so many topics,

the subjects on which I comment are largely business related. carrier performance in a market is one - that is precisely what I have been talking about here as has been the discussion about the refinery.

Notice I am taking no position on the onboard service aspect of the 321 or other service-related topics. There are indeed topics about which I do not comment.

 

I will say that Trainer's been a success in that it crashed the crack spread.

Maybe DL is able to work out some discounting for its own use, but in general, the tide didn't rise just for DL -- it raised up all boats.

The question is whether or not Trainer's existence will be able to continue to keep the crack spread under control. Another concern is whether or not there are upgrades for the facility that will need to be done in the future which, in the desire to show it turning a profit, perhaps aren't being properly accrued for at the present time...

 
You will remember that one of DL's stated goals with the refinery was to break the crack spread which had soared to be more than 25% of the total cost of fuel. DL really never made any promises about running a profitable refinery on a standalone basis; the purpose of the refinery was directly tied to the cost of fuel which the airline buys.


DL also made a big deal that they could buy about 60 new generation aircraft or the refinery in order to get the same amount of fuel savings but the refinery cost considerably less. DL's stated goal also was to reduce the advantage that other carriers obtained with newer aircraft compared to the cost of financing that those aircraft cost.

Again, part of the transcon strategy for AA was to replace the one of the oldest and most fuel inefficient aircraft types in the US carrier fleet per seat with one of the newest most economical. In contrast, DL is using the 757 - of which DL says it will keep about 75 copies for the foreseeable future - along with the 763, an aircraft has nearly identical fuel efficiency per seat as the AA's 321Ts.

DL's fleet strategy overall is not that they aren't buying new aircraft but that they will buy them only in the quantities which they can fund without increasing their long-term debt. They have other strategies to ensure that the older aircraft they retain are used profitably.

AA has taken one strategy not only in their fleet strategy but also in JFKLAX that has greatly limited their ability to serve the entire coach market which AA had long embraced as well as most of the cargo market. AA's strategy is an updated version of the strategy that UA started years ago. DL is using older aircraft that aren't really much different in terms of fuel or labor efficiency per seat to serve the entire market - with the refinery and DL's revised fuel hedging part of DL's strategy to gain an advantage relative to its competitors.

Because of AA and DL's new strength and the highly competitive nature of the NYC market, AA and DL are both likely to succeed, largely based on gains they make at the expense of other carriers. However, the overall strategic implications might not be the same.

 

[kirkpatrick]

If we're operating the 321S out of LAX we must have gotten (or will have by August) all the T versions.  What's the total, 18?  And since N*JETSA is no longer available, does anyone know where to get that information?
 
MK

 

[eolesen]

AA has taken one strategy not only in their fleet strategy but also in JFKLAX that has greatly limited their ability to serve the entire coach market

There's a difference between limiting the coach market and not catering to it.

Those who want to fly NYC-LAX at the lowest possible price can still do so on AA if they want to. It may or may not be on a nonstop. It may not be out of JFK. But there is no shortage of options, nonstop or connecting.

 

[AirLUVer]

All 321T's are delivered. 798, the last one to complete acceptance check should be out shortly.  The 767's last day on the JFK transcon is scheduled for the 10th. 
 
Per jetnet out a few weeks ago, the first 321S will be delivered by the end of the June.  I am a bit surprised that it will be almost 60 days from delivery to revenue service, since it is a derivative of the 321/319.

 

[WorldTraveler]

There's a difference between limiting the coach market and not catering to it.

Those who want to fly NYC-LAX at the lowest possible price can still do so on AA if they want to. It may or may not be on a nonstop. It may not be out of JFK. But there is no shortage of options, nonstop or connecting.

since 60% of the combined EWR/JFK/LGA - LAX market flies on nonstops from JFK with less than 5% of the market on connecting flights from LGA, AA's decision to cut capacity from JFK amounts to reducing their presence in the market.

There is no reason why AA would take more connecting traffic when they presumably already have maximized their NYC operation to gain the most revenue and they aren't adding any more enroute capacity to/from their hubs anyway.

The bottom line is that AA has decided not to serve a significant portion of the coach and freight market. Given that the market capacity is flat, AA and DL are basically trading capacity.

Given that AA and DL's average fares are within 5% of each other even though DL has far less premium capacity, it is possible that AA was taking large amounts of traffic that were at deeper discounts than DL. The only carrier that has a lower average fare than DL is B6.

In other JFK markets that are directly competitive between B6 and DL, DL has a revenue premium in most of the longhaul and Florida markets while B6 has an advantage in others, esp. to the Caribbean.
Thus, it is not likely that DL is diluting its average fares by taking on more capacity on JFK-LAX while B6' will increase as they add a premium cabin.

The interesting part of the NYC transcon market is that EWR no longer gets premium revenues as it once did when CO ran the hub. VX has entered the market since and UA has added a lot of additional capacity but the dynamic between JFK and EWR has changed.

Both UA's lower fares from JFK and the lack of premium from EWR where it has the majority of the seats further validates that UA is being marginalized in the transcon markets. Given VX' lack of a competitive business product, they too could see erosion.

Again, based on UA and VX' size in the market, if AA and DL both gain relative to the others, there should be no problem for both of them to succeed. The only real difference is that DL's strategy is to also become the market leader in terms of capacity.

and it also validates that part of the way DL is maximizing its gates at LAX is by increasing gauge where it can; AA's cutbacks made it possible for DL to upgauge without adding more capacity to the market.

 

[eolesen]

Per jetnet out a few weeks ago, the first 321S will be delivered by the end of the June.  I am a bit surprised that it will be almost 60 days from delivery to revenue service, since it is a derivative of the 321/319.

Perhaps they want to have enough available for in-service protection.

 

[AirLUVer]

Perhaps they want to have enough available for in-service protection.

There should be at least 3 aircraft competing acceptance prior to beginning regularly scheduled flying.  There is the possibility that there could be some equipment substitutions on regularly scheduled A319 flights, for OTS events, until regular scheduled service starts.

 

[737823]

If we're operating the 321S out of LAX we must have gotten (or will have by August) all the T versions.  What's the total, 18?  And since N*JETSA is no longer available, does anyone know where to get that information?
 
MK

Doesn't *JDALL on DECS display fleet status?

Josh

 

[700UW]

Doesn't *JDALL on DECS display fleet status?

Josh

Hmm someone is a fraud?

 

[737823]

Hmm someone is a fraud?

How am I a fraud for answering a question?

http://www.twu561.org/index.php?option=com_content&view=article&id=90:decs-a-res-codes&catid=39:general&Itemid=80

Josh

 

[wings396]

A bit shocking that a banker knows DECS entries. Can you access them from work?

 

[700UW]

My sentiments exactly.

 

[eolesen]

Oh, please. Enough people talk in entries on Airliners.net that I wouldn't make a big deal about it...

Besides, that isn't the entry. It's JD*ALL to get a fleet listing. Someone I knew would "accidentally" send that to the gate printer of whoever was on his shitelist that week. It would tie the printer up for a good three or four minutes...

 

[FWAAA]

What would be interesting is if the 321T proves to be successful, will they expand the city pairs?  LAX-ORD LAX-DFW LAX-BOS ORD-JFK ORD-DFW.

Those short mid-con flights (all except for LAX-BOS) didn't have 3-class service during the 1990s when AA introduced the American Flagship Service, so why would new AA introduce 3-class A321T service between those cities now?
 

Unlikely aside from LAX-BOS or maybe LAX-DCA. Nobody will pay for premium on a three hour flight.

Where it might also make sense is BOS-LHR...

Agree with LAX-BOS and perhaps LAX-DCA.    Over the weekend, someone on Flyertalk started a discussion on the United forum alleging that new AA would begin A321T 3-class service between BOS and both SFO and LAX:
 
http://www.flyertalk.com/forum/united-airlines-mileageplus/1583526-aa-bringing-p-s-like-service-bos-ua-response.html
 
Most observers correctly predicted that it probably would not happen,   I can see new AA reinstating BOS-SFO, but I doubt it would be with 3-class service.    
 
It would be great if new AA flew 75Ls on transcons like these, particularly the eastbound redeyes from LAX and SFO.   I can sleep ok sitting upright in the ordinary 757/A321 F seats, but I sleep so much better when I can recline with a legrest and footrest.   Hell, I'd be happy with some flight attendant rest seats (ala 767 row 17).
 
About A321Ts BOS-LHR:   BA is flying four daily flights with a mix of 777s and 747s (more 747s in summer, more 777s in winter).   Looks to me like BOS-LHR isn't a very thin route, so why fly such a small plane?   Why not a couple of 77Ws?   Yes, I realize that the 77Ws are far heavier than necessary to fly such a short route, but with LHR slots at a premium, it looks like large airplane with lots of seats is the focus for BA/AA between LHR and USA.   UA, on the other hand, has flown some 757s from EWR, as it doesn't have much market share.      

 

[737823]

A bit shocking that a banker knows DECS entries. Can you access them from work?

How so? I posted a link from the TWU MIA local website.

I wouldn't be shocked if you knew a few Bloomberg entries.

No comment.

Josh