AA orders yet another 777

[FWAAA]

According to the Dallas Morning News, AA firmed up another 777-300ER for a total of 9. This time though they converted a 777-200ER option, which there was 7, now 6 remaining. Looks like the hypothesis was correct and AA is in the market for 15. What do you think, is that it, 15? Or more?

http://aviationblog.dallasnews.com/archives/2011/10/american-airlines-expands-its.html

I'd bet that you're right and that at least 15 are intended. My guess is that AA won't stop until 24 or so, but perhaps 15 is the total. Just about matches the earlier rumours exactly except that AA is not buying JAL's 777-300s.

Why are they ordering all these 777-300ER?
It makes no sense.

Makes sense for future growth in slot-constrained airports like NRT and LHR plus ULH flights like to HKG or SYD or MEL. Trip costs aren't much higher than 777-200 yet additional capacity means better unit costs. If they are outfitted with industry-leading flat bed J seats, they could easily substitute for BA planes to LHR.

Just a qk. ?
RIGHT NOW, TODAY, how many 777's are in the stable ?

Currently there are 47 777-223s on the property with 9 777-323s on order plus purchase rights for six more 777-223s that, as pointed out by IORFA, will likely be converted into six additional 777-323 orders.

 

[aapitbull]

Why are they ordering all these 777-300ER?
It makes no sense.

It makes perfect sense if you can get a pilot contract signed the two aircraft have almost the same range so if you had 15 or 20 you could sale routes and fill planes in where demand dictates, also the 300 allows you to have similar seat mile cost that UA & DL get out of their 747-400 so you can compete in ORD to China or N.Y. to China or maybe Hong Kong Australia.

 

[Redhead1]

Why are they ordering all these 777-300ER?
It makes no sense.

....and you laughed at me, when I posted that AMR/AA would be taking possession of 23-30 B777s! I still stand by my predictions months ago.

 

[JFK Fleet Service]

What are the odds these hulls start showing up in TUL after delivery flights from PAE without a pay rate negotiated with the APA?

 

[eolesen]

Who needs pay rates if they operate with management pilots?...

Seriously, I'd expect rates before delivery. If not, AA can lease them out.

 

[FWAAA]

I've assumed all along that management has been trying to play 'shiny jet syndrome" with the APA - with over 500 new planes now on order (counting the 737s, the A320s, the 773s and the 789s). Doubt it will work as the pilots are probably not that simplistic.

As an aside, the APA contract contains a payrate for the 777-300, but the weight listed is, of course, the non-ER version. The contract rate for the 777-200 is not labeled "ER" or "IGW" but the MTOW listed is the heavyweight ER version. I wouldn't put it past management to try to arbitrate this one by claiming that the APA has already agreed to a payrate for the -300ER.

With more than 500 new planes on the way, management and the APA will no doubt come to agreement soon.

 

[Buck]

I've assumed all along that management has been trying to play 'shiny jet syndrome" with the APA - with over 500 new planes now on order (counting the 737s, the A320s, the 773s and the 789s). Doubt it will work as the pilots are probably not that simplistic.

As an aside, the APA contract contains a payrate for the 777-300, but the weight listed is, of course, the non-ER version. The contract rate for the 777-200 is not labeled "ER" or "IGW" but the MTOW listed is the heavyweight ER version. I wouldn't put it past management to try to arbitrate this one by claiming that the APA has already agreed to a payrate for the -300ER.

With more than 500 new planes on the way, management and the APA will no doubt come to agreement soon.

Just a side note: Boeing has increased it's 737NG class production to 35 a month..........

 

[WorldTraveler]

I've assumed all along that management has been trying to play 'shiny jet syndrome" with the APA - with over 500 new planes now on order (counting the 737s, the A320s, the 773s and the 789s). Doubt it will work as the pilots are probably not that simplistic.

As an aside, the APA contract contains a payrate for the 777-300, but the weight listed is, of course, the non-ER version. The contract rate for the 777-200 is not labeled "ER" or "IGW" but the MTOW listed is the heavyweight ER version. I wouldn't put it past management to try to arbitrate this one by claiming that the APA has already agreed to a payrate for the -300ER.

With more than 500 new planes on the way, management and the APA will no doubt come to agreement soon.

It is also conceivable that AA could use the 773ERs even at the 772ER MTOW on routes to/from LHR and MIA-S. America. The full 773ER MTOW is needed for much longer routes such as TPAC, Middle East/Africa routes.
The desire is clearly to obtain a pay rate for the full installed TOW and have the freedom to operate them as they were/will be built but even with reduced payload, the aircraft is still useable on the majority of AA's existing int'l network
.
The 773ER is a substantially lower CASM long haul aircraft than existing competitors.

 

[Mach85ER]

WT,

The APA weight is certificated, not what you operate it on any given day.

FWAAA,

It wouldn't surprise me that they would try something as scummy as forcing an arbitration. Not sure if even has a chance. An APA National officer told me as soon as Arpey made the "we have a 777-300 payrate", they called over and the senior AMR Execs admitted to them that they really don't have a payrate.

The view of the pilot group is that they are paperweights until a rate is negotiated in Section 6. Nobody is falling for a foot dragging 3 weeks prior either. Both the A320 and the -300 won't be flown by APA pilots without a contract.

 

[1AA]

Heard a rumor from the floor that AA is paying for some or all the 777-300's. No financing at all. Has anyone heard this?
If this is true then it might be true that AA will be burning through their reserve cash in order to be eligible for BK filing sometime soon. Hope it's just a rumor.

 

[FWAAA]

Heard a rumor from the floor that AA is paying for some or all the 777-300's. No financing at all. Has anyone heard this?
If this is true then it might be true that AA will be burning through their reserve cash in order to be eligible for BK filing sometime soon. Hope it's just a rumor.

Nope, that's just ignorant ramblings by employees.

AA said last week that financing has been obtained for all of next year's deliveries except for the two 777-300s to be delivered next year. Here are Bella Goren's exact words:

In terms of capital spending next year, we anticipate taking deliveries of 28 737-800 aircraft and 2 777-300ER aircraft. Our current estimate is that next year's aircraft CapEx and lease deposits will be between $1.3 billion and $1.4 billion. We have arranged financing for all of these aircraft, subject to certain terms and conditions, with the exception of the 2 777-300s, which we view is very financeable. We also changed one of our previous 777-200 orders scheduled for 2013 delivery to a 777-300ER. We are currently in the process of budgeting for next year, and we'll provide an update on our non-aircraft CapEx when we report our fourth quarter results.

http://seekingalpha.com/article/300713-amr-s-ceo-discusses-q3-2011-results-earnings-call-transcript

AA just hasn't arranged financing yet - which isn't a big deal, considering they don't arrive for almost a year from now. Dunno about the other seven confirmed 777-300s to be delivered in 2013.

In any event, if AA were anxious to file Ch 11, the last thing AA would do is burn thru more cash - the more cash a company has when it files, the better the odds that it will survive to emerge from Ch 11.

There is no such thing as a maximum amount of cash to be "eligible for BK" as AA could file even if had $10 billion in cash in the bank.

 

[FrequentFlierCA]

With more than 500 new planes on the way, management and the APA will no doubt come to agreement soon.

Agree. Seems like they are on the cusp as it is. And with so much potential revenue at stake both sides would be foolish not to come to an accommodation.

 

[AC AA LA FA]

I am as excited as the next person about all these deliveries but they are fleet replacement ac..not ac to grow the airline per say. I am puzzled every time I read a posting that reflects the idea that these 500 or so deliveries will grow the airline and hence securing and or adding addnl jobs.....?

 

[eolesen]

What exactly are the 773's replacing?... If they're not growth airplanes, I'm not sure what else you'd call them.

 

[damajagua]

What exactly are the 773's replacing?... If they're not growth airplanes, I'm not sure what else you'd call them.

Maybe AA is thinking or retiring the 767-200 that it uses on trans con.
Add 767-300 to the route. Upgrade the destinations that those 767-300
flew internationally to 777-200 and fly the 777-300 to places like
NRT.