AA to start JFK-LAX 1/7/2014 A321
- Thread starter 700UW
- Start date
jimntx
Veteran
You're headline is a little misleading. AA has been serving the JFK-LAX route since we did it with a wagon train. On January 7th, we are switching over to the new A321T's from the 767s. The A321T is a configuration that will be used only on the transcon routes--total passenger load...102! Eventually, we will have 321's flying other routes, but those will have a more common configuration. (Can you say "Jam 'em in like sardines?" Yes, I knew you could. 
)
P.S. On a side note...a friend who works for US Airways said to me that Parker will never stand for an A321 with that few seats (102) because the current US Airways 321s have something like 177 or 187 seats. What say you?
)P.S. On a side note...a friend who works for US Airways said to me that Parker will never stand for an A321 with that few seats (102) because the current US Airways 321s have something like 177 or 187 seats. What say you?
IMO, your friend's analysis is too simplistic. Several posters have said the same thing on the US forum over the past several months, and I disagree.
If Parker's US had any domestic routes on which US could carry an average of 825 daily O&D passengers each way at an average one-way fare of $454 (AA's average JFK-LAX transcon fare in last year's 4th quarter - most recent data available) and where people actually buy First Class and Business Class fares, then I think that the current US would fly some 102 passenger A321s to capture that market.
Parker has told his employees that US is unable to command revenue premiums comparable to UA, DL or AA and that's why US was unable to match the wages of those big three. Now that he is taking over AA, his tune has changed - now, new AA will keep its revenue premiums which will grow due to all the "synergies" and that's how he's able to finally pay the US employees the AA wages plus increase PMAA wages slightly as well. I don't think Parker took over AA to remake AA in US' image, but I've been wrong before. I actually believe that he took over AA so that he could finally run an airline that does command high revenues and that he won't immediately undo the things that bring in those premium revenues.
D
Deleted member 14439
Guest
http://www.insidesocal.com/aviation/2013/08/09/american-airlines-will-fly-its-new-a321s-between-los-angeles-and-new-york-starting-in-january/
Interesting configuration. 10/20/72
Interesting configuration. 10/20/72
WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
- 10,662
- Banned
- #6
while that is true, FWAAA, AA is also cutting capacity in the market by one-third and will no longer be the market leader in market that has been the backbone of the airline. Not every network/legacy airline is taking that strategy.
The transcon markets continue to be the focus of intense competition and B6's announcement that it is adding a premium cabin to its transcon 321s only makes the challenge to the incumbent carriers all the more real.
Add in that VX is starting to show profits by slowing their growth and there could be two strong LFCs in the market both with strong customer appeal.
Parker will figure out that there are premium routes that are worth flying with a unique subset of aircraft but walking away from a substantial portion of the market in order to succeed most certainly is a strategy that has enormous risks.
The transcon markets continue to be the focus of intense competition and B6's announcement that it is adding a premium cabin to its transcon 321s only makes the challenge to the incumbent carriers all the more real.
Add in that VX is starting to show profits by slowing their growth and there could be two strong LFCs in the market both with strong customer appeal.
Parker will figure out that there are premium routes that are worth flying with a unique subset of aircraft but walking away from a substantial portion of the market in order to succeed most certainly is a strategy that has enormous risks.
Glenn Quagmire
Veteran
- Apr 30, 2012
- 4,809
- 4,343
FWAAA - Nice analysis.
"I found this nice little "QuickTake" from another site that gives a great synopsis of what is happening with AA right now in an 'all around' sense:
The hearing in US Bankruptcy Court for confirmation of the AMR Plan Of Reorganization (POR) has been set for August 15
Approval by the US Department of Justice of the American Airlines merger with US Airways is expected to occur by the end of August
Name of the new parent company will be "American Airlines Group"
After the merger, the new American Airlines will be the world's largest airline
MIA-MXP (Milan, Italy) service begins Nov 21, using the B767-300ER
MIA-CZM (Cozumel, Mexico) service begins Nov 21, with B737-800 aircraft
LAX-GRU (Sao Paulo, Brazil) service to tentatively begin Nov 21, pending final governmental approval
Deliveries for 93 additional B737-800 aircraft continue until 2017
Orders for 100 B737 MAX aircraft to be delivered in 2017 through 2022, with options for an additional 60 B737 MAX aircraft in the years 2020 through 2025
Currently taking delivery of 65 A319 aircraft and 65 A321 aircraft until 2017, with options for an additional 85 aircraft from the A320 family
The A319 aircraft are powered by CFM56-5B6 engines, and the A321 aircraft will be equipped with IAE V2533-A5 engines
The first Airbus A319 for American Airlines has been delivered in the new livery; about one-third of the existing fleet will be repainted by the end of 2013, with the rest of the fleet to be repainted within five years
Two variants of the A321 will be flown by American: A Standard A321 which will include Main Cabin Extra seating, and a 102-seat Transcon A321 model
Beginning January 7, 2014 the Transcon A321 will replace retiring B767-200ER aircraft in the JFK-LAX market with two daily round trips, increasing to six daily round trips by Jan 31.
Transcon A321 service in the JFK-SFO market is expected to begin later in 2014
Orders for 130 aircraft from the A320NEO family to be delivered in 2017 through 2022, with options for an additional 280 aircraft from the A320NEO family
Retiring all MD80s with the arrival of new B737-800s, A319s and A321s
The Restructured Boeing Aircraft Purchase Agreement of January 11, 2013 confirmed the orders for 12 B787-8 aircraft and 30 B787-9 aircraft (with options for an additional 58 B787s), provides for the substitution of up to 20 B787-8 aircraft for B787-9s, and accelerated the delivery schedule to now occur from November 2014 through September 2018
11 remaining B777-300ERs on order; deliveries through 2016
Monthly schedule bidding using PBS to begin in 1Q 2014
Utilizes satellite bases - defined as "a station other than the pilot's domicile which contains sequences that originate and terminate at the same station"
The three current [domiciles] having assigned (satellite) bases are:
[LAX] - (ONT) (SNA) (LGB); [DCA] - (BWI) and [MIA] - (PBI)
The LAX domicile is also supplemented by certain flying which originates and terminates at SAN, essentially as if it were a satellite base
Also uses five geographic areas as co-terminals, they are:
LGA/JFK/EWR; ORD/MDW; DFW/DAL; DCA/IAD and MIA/FLL
Both of the previous pilot retirement benefit plans have now been replaced with a fixed 14% (to increase to 16% in 2014) company contribution to a 401k account
Main Cabin Extra seating, which includes four to six inches of additional leg room and Group 1 boarding priority, has been completed on all aircraft types in the fleet, except for the B777-200ER
Wi-Fi offered through Gogoair.com is available on most aircaft operating on domestic routes
Most fleet types have 110V AC power outlets available at each seat in First and Business Class, as well as in select rows of the Main Cabin
All new deliveries of B737-800, A319 and A321 aircraft will have seatback video entertainment, 110V AC power outlets and USB jacks available at every seat
A321 Transcon aircraft will feature 10 Flagship Suites that transform into a fully lie-flat six-foot eight-inch bed with drop-down armrests in a 1x1 reverse herringbone pattern in First Class, 20 lie-flat seats in a 2x2 layout in Business Class, 36 Main Cabin Extra seats and 36 standard Main Cabin seats
All B777-300ER aircraft feature satellite-based international Wi-Fi offered through T-Mobile, seatback video entertainment, 110V AC power outlets and USB jacks at every seat
All B777-300ER aircraft have 8 Flagship Suites in a 1x2x1 reverse herringbone pattern in First Class and 52 lie-flat seats in a 1x2x1 layout in Business Class; all B777-200ER aircraft have 16 Flagship Suites in First Class, and 37 lie-flat seats in Business Class utilizing the same 1x2x1 setup as the B777-300ER
American is a founding member of the oneworld global airline alliance
The arbitration panel has issued its final award which establishes contractual protections that will be provided to former TWA pilots which will continue in force until the earlier of: two named former TWA pilots each being able to hold bid status as a widebody/narrowbody Captain respectively; or the date under which AA and APA have reached agreement to change or eliminate these guarantees and preferences following January 1, 2019
The company has also agreed that no pilot base other than STL shall be closed prior to October 1, 2013
IATA code: AA; ICAO code: AAL
ATC callsign: "American"
This page last updated: Aug 9, 2013 (quicktake)"
Pilot stuff here:
Not hiring. Hiring possible by late 2013.
Recalling furloughed pilots at a rate of up to 60 pilots/month for September and October.
While all AA/TWA pilots have been recalled, there are approximately 150 pilots at American Eagle with AA seniority numbers who will be given the opportunity to join AA before off-the-street hiring begins.
All remaining furloughed pilots may defer recall to American until May 1, 2016. Any furloughed pilot can notify the company that he desires to end the recall deferral, and in such case the company will recall the pilot in seniority order to the next available class date.
They site also has current fleet and config data.
And yes WT, they also have one for Delta...
http://www.airlinepilotcentral.com/airlines/legacy/american.html
"I found this nice little "QuickTake" from another site that gives a great synopsis of what is happening with AA right now in an 'all around' sense:
The hearing in US Bankruptcy Court for confirmation of the AMR Plan Of Reorganization (POR) has been set for August 15
Approval by the US Department of Justice of the American Airlines merger with US Airways is expected to occur by the end of August
Name of the new parent company will be "American Airlines Group"
After the merger, the new American Airlines will be the world's largest airline
MIA-MXP (Milan, Italy) service begins Nov 21, using the B767-300ER
MIA-CZM (Cozumel, Mexico) service begins Nov 21, with B737-800 aircraft
LAX-GRU (Sao Paulo, Brazil) service to tentatively begin Nov 21, pending final governmental approval
Deliveries for 93 additional B737-800 aircraft continue until 2017
Orders for 100 B737 MAX aircraft to be delivered in 2017 through 2022, with options for an additional 60 B737 MAX aircraft in the years 2020 through 2025
Currently taking delivery of 65 A319 aircraft and 65 A321 aircraft until 2017, with options for an additional 85 aircraft from the A320 family
The A319 aircraft are powered by CFM56-5B6 engines, and the A321 aircraft will be equipped with IAE V2533-A5 engines
The first Airbus A319 for American Airlines has been delivered in the new livery; about one-third of the existing fleet will be repainted by the end of 2013, with the rest of the fleet to be repainted within five years
Two variants of the A321 will be flown by American: A Standard A321 which will include Main Cabin Extra seating, and a 102-seat Transcon A321 model
Beginning January 7, 2014 the Transcon A321 will replace retiring B767-200ER aircraft in the JFK-LAX market with two daily round trips, increasing to six daily round trips by Jan 31.
Transcon A321 service in the JFK-SFO market is expected to begin later in 2014
Orders for 130 aircraft from the A320NEO family to be delivered in 2017 through 2022, with options for an additional 280 aircraft from the A320NEO family
Retiring all MD80s with the arrival of new B737-800s, A319s and A321s
The Restructured Boeing Aircraft Purchase Agreement of January 11, 2013 confirmed the orders for 12 B787-8 aircraft and 30 B787-9 aircraft (with options for an additional 58 B787s), provides for the substitution of up to 20 B787-8 aircraft for B787-9s, and accelerated the delivery schedule to now occur from November 2014 through September 2018
11 remaining B777-300ERs on order; deliveries through 2016
Monthly schedule bidding using PBS to begin in 1Q 2014
Utilizes satellite bases - defined as "a station other than the pilot's domicile which contains sequences that originate and terminate at the same station"
The three current [domiciles] having assigned (satellite) bases are:
[LAX] - (ONT) (SNA) (LGB); [DCA] - (BWI) and [MIA] - (PBI)
The LAX domicile is also supplemented by certain flying which originates and terminates at SAN, essentially as if it were a satellite base
Also uses five geographic areas as co-terminals, they are:
LGA/JFK/EWR; ORD/MDW; DFW/DAL; DCA/IAD and MIA/FLL
Both of the previous pilot retirement benefit plans have now been replaced with a fixed 14% (to increase to 16% in 2014) company contribution to a 401k account
Main Cabin Extra seating, which includes four to six inches of additional leg room and Group 1 boarding priority, has been completed on all aircraft types in the fleet, except for the B777-200ER
Wi-Fi offered through Gogoair.com is available on most aircaft operating on domestic routes
Most fleet types have 110V AC power outlets available at each seat in First and Business Class, as well as in select rows of the Main Cabin
All new deliveries of B737-800, A319 and A321 aircraft will have seatback video entertainment, 110V AC power outlets and USB jacks available at every seat
A321 Transcon aircraft will feature 10 Flagship Suites that transform into a fully lie-flat six-foot eight-inch bed with drop-down armrests in a 1x1 reverse herringbone pattern in First Class, 20 lie-flat seats in a 2x2 layout in Business Class, 36 Main Cabin Extra seats and 36 standard Main Cabin seats
All B777-300ER aircraft feature satellite-based international Wi-Fi offered through T-Mobile, seatback video entertainment, 110V AC power outlets and USB jacks at every seat
All B777-300ER aircraft have 8 Flagship Suites in a 1x2x1 reverse herringbone pattern in First Class and 52 lie-flat seats in a 1x2x1 layout in Business Class; all B777-200ER aircraft have 16 Flagship Suites in First Class, and 37 lie-flat seats in Business Class utilizing the same 1x2x1 setup as the B777-300ER
American is a founding member of the oneworld global airline alliance
The arbitration panel has issued its final award which establishes contractual protections that will be provided to former TWA pilots which will continue in force until the earlier of: two named former TWA pilots each being able to hold bid status as a widebody/narrowbody Captain respectively; or the date under which AA and APA have reached agreement to change or eliminate these guarantees and preferences following January 1, 2019
The company has also agreed that no pilot base other than STL shall be closed prior to October 1, 2013
IATA code: AA; ICAO code: AAL
ATC callsign: "American"
This page last updated: Aug 9, 2013 (quicktake)"
Pilot stuff here:
Not hiring. Hiring possible by late 2013.
Recalling furloughed pilots at a rate of up to 60 pilots/month for September and October.
While all AA/TWA pilots have been recalled, there are approximately 150 pilots at American Eagle with AA seniority numbers who will be given the opportunity to join AA before off-the-street hiring begins.
All remaining furloughed pilots may defer recall to American until May 1, 2016. Any furloughed pilot can notify the company that he desires to end the recall deferral, and in such case the company will recall the pilot in seniority order to the next available class date.
They site also has current fleet and config data.
And yes WT, they also have one for Delta...
http://www.airlinepilotcentral.com/airlines/legacy/american.html
Thomas Paine
Veteran
- Sep 4, 2003
- 583
- 569
I'm confident that Parker already has his next bullshit excuse for paying crappy wages ready for when he cant use that one. Southwest didn't need a revenue premium to pay decent wages.
"[font=Helvetica Neue']4. Why is American switching from a widebody to a narrowbody aircraft on transcontinental flights?[/font]
[font=Helvetica Neue']Using narrowbody aircraft in a three-class cabin configuration outfitted with fully lie-flat premium class seats, Wi-Fi and in-seat entertainment throughout on transcontinental routes allows American to significantly reduce cost and better match customer demand while continuing to provide a truly premium experience for our most valuable customers."[/font]
[font=Helvetica Neue']So they're saying there wasn't enough demand to fill a widebody? I thought the 762 flights got a pretty good load factor[/font]
[font=Helvetica Neue']Using narrowbody aircraft in a three-class cabin configuration outfitted with fully lie-flat premium class seats, Wi-Fi and in-seat entertainment throughout on transcontinental routes allows American to significantly reduce cost and better match customer demand while continuing to provide a truly premium experience for our most valuable customers."[/font]
[font=Helvetica Neue']So they're saying there wasn't enough demand to fill a widebody? I thought the 762 flights got a pretty good load factor[/font]
jimntx
Veteran
No. They are saying that "significantly reducing cost" without reducing premium amenities on the route is the goal. Also, remember the 767s are not in the Spring Chicken category. They've been around awhile. The A321Ts provide a comparable premium experience--only 102 seats is going to give a LOT of individual room.
The 762s do have a good load factor. However, the A321Ts are going to provide seating and space for the 762's premium fare passengers while eliminating most of the cattle call seats in the back.
The 762s do have a good load factor. However, the A321Ts are going to provide seating and space for the 762's premium fare passengers while eliminating most of the cattle call seats in the back.
All we know this morning is that from January 7 thru January 31, AA has downguaged six of the nine flights while maintaining frequencies. And every time I fly to JFK and back in January and early February, the planes aren't as packed, so this capacity reduction may be short-lived. Some of us have previously speculated AA might eventually fly 14 to 16 daily JFK-LAX flights later in 2014. Vahidi even "announced" that kind of schedule on May 1 of this year, although corporate communications rescinded his statements as Vahidi's pronouncements were out of turn.
For all we know, by mid-February or the end of that month, there may be more than nine frequencies between JFK and LAX.
I agree. Every time Barger (B6) looks at JFK-LAX, he has to be envious of AA's $454 average fare when B6 is lucky to get just over half of that. I'm skeptical that B6 will succeed in taking away business class passengers, but stranger things have happened.
VX did turn a very small profit in the second quarter but also increased its borrowings (after trumpeting the benefits of converting much of its prior debt into equity) to again bolster its cash holdings. VX is one fuel spike away from another liquidity crisis, so $4/gal jet fuel prices can't come soon enough. The low cost, hip, trendy airlines have yet to capture enough of the over-30 crowd (you know, where the corporate contracts are) to be successful. Perhaps that will change.
WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
- 10,662
- Banned
- #12
Q,
I am aware of that site and the user-edited accomplishments that can be added but that doesn’t mean they represent an accurate assessment of the total strategic picture for a company; in fact, the site could read like a corporate issued report given the focus on everything positive.
I’ll not list all of the challenges but isn’t it a little ironic that we are talking about replacing a widebody with a premium configured narrowbody with 35% fewer seats in several top routes for AA while also holding onto the notion that the new AA/US will be the world’s largest airline based on a simple addition of EXISTING capacity?
History clearly shows that nearly every modern airline merger that has gone before including DL/NW, UA/CO, and WN/FL has all resulted in less capacity than what both offered before the merger. Given that AA/US will also face significant labor cost increases as part of the cost of obtaining labor peace for the merger, it is quite fanciful to think that newAA will be as large as a simple combination of the current AA/US – or even be larger.
The claim of being the largest also could change based on strategic actions that other carriers could take but which are not presently known.
FWAAA,
Yes we know that some have postulated here about frequency increases that would offset the smaller aircraft. But AA hasn’t confirmed that and it strategically makes little sense to reduce coach capacity and then add back more premium configured capacity. The configuration of the premium cabins on the 321Ts is not 35% less than what exists on the 762s. AA is making a strategic decision to cut coach capacity and also cut costs at a faster rate in order to make the transcon routes economically viable. Adding a bunch of premium capacity only will force down the yields where AA needs to make money at the very time when every other competitor except for VX is also adding and upgrading their premium offerings.
You can discount B6 if you would like but the simple fact is that no market can exist solely on the basis of the premium cabin although the JFK transcons might be the closest where it is possible to “siphon off” the best passengers. Yet UA is doing the same thing while B6, DL, and VX are all taking the approach that they will serve the entire market. B6 has been very successful in pushing AA out of many markets at JFK because of their lower costs. They, like DL, will offer premium cabins with amenities very similar to at least AA’s business class cabin and will have much lower CASMs by virtue of the number of extra seats they have; the coach passengers are covering the incremental costs of DL and B6’s larger/more densely configured aircraft.
But it is also about market share strategies. I am open to hearing examples you can think of but I can’t think of a single market in which a US network/legacy carrier has been successful over the long-term by using a market segmentation strategy – either “siphoning off” the low price or the high value end of the market. Again, the closest example is UA in the transcons but they have fallen to #4 in terms of total local JFKLAX revenue behind AA, DL, and VX (in that order) while in the JFKSFO market, UA is #1 followed by DL, VX, and AA. IOW, UA’s premium configured aircraft strategy has provided DL and VX with the opportunity to increase their total revenue.
As for VX, if the expectation is that VX will fail based on a spike in fuel prices, the other side of the equation would have to be considered including that huge portions of legacy carrier networks – including heavy reliance on small RJs to deliver passengers to hubs – would be impacted far more than for an LFC that is using fairly modern technology aircraft. VX has demonstrated tremendous staying power – more than they should have – but they are still here and they have had a negative impact on the total transcon market to which AA and UA are the most exposed.
Finally, it is worth noting that in the most recent quarter, AA’s mainline ex-fuel CASM was the third lowest among the 4 US legacies – higher than US and DL. US’ mainline ex-fuel CASM was only 1% lower than DL’s (on a non-mileage adjusted basis); positions within the pack are very subject to movement, also meaning that the ability to withstand competitive pressures is more significant than the actual CASM meaning revenue generation is a more significant indicator than ever.
While you often note that AA’s CASM will go down based on the arrival of new aircraft, nearly every other airline is introducing significant numbers of lower CASM aircraft than they presently operate now although in many cases they aren’t taking on the debt load in order to bring those new aircraft online.
Jimntx,
Yes, we know that the 762s were old and not fuel efficient but do you realize that AA carries on average more than 7500 pounds of cargo per flight on JFKLAX and JFKSFO precisely because it operates the only widebody service? Coincidentally, DL has added 767-300ER service from JFK-LAX which they say is transitional until DL’s 757s with lie flat seats are in service yet DL will have the only widebody service JFKLAX which means the chances are very high that a lot of cargo revenue that has been carried by AA could move to DL. Since DL's transcons 763ERs have 225 seats (+-) or more than 50 more than AA's 762s and DL can add in cargo revenue, the economics might favor DL continuing to operate several 767s in both the JFKLAX and JFKSFO markets in part driven by the reduced capacity from AA. JFKLAX and -SFO are some of the top cargo markets from JFK and AA has long been the top carrier. Not only is AA walking away from a large segment of coach passengers, they are also walking away from the cargo market.
I’m happy for the new beginnings that AA has in front of it and for the new opportunities that the 321Ts offer for AA. But a balanced perspective also requires acknowledging that there are significant challenges which AA has now and which the merger won’t necessarily address.
I am aware of that site and the user-edited accomplishments that can be added but that doesn’t mean they represent an accurate assessment of the total strategic picture for a company; in fact, the site could read like a corporate issued report given the focus on everything positive.
I’ll not list all of the challenges but isn’t it a little ironic that we are talking about replacing a widebody with a premium configured narrowbody with 35% fewer seats in several top routes for AA while also holding onto the notion that the new AA/US will be the world’s largest airline based on a simple addition of EXISTING capacity?
History clearly shows that nearly every modern airline merger that has gone before including DL/NW, UA/CO, and WN/FL has all resulted in less capacity than what both offered before the merger. Given that AA/US will also face significant labor cost increases as part of the cost of obtaining labor peace for the merger, it is quite fanciful to think that newAA will be as large as a simple combination of the current AA/US – or even be larger.
The claim of being the largest also could change based on strategic actions that other carriers could take but which are not presently known.
FWAAA,
Yes we know that some have postulated here about frequency increases that would offset the smaller aircraft. But AA hasn’t confirmed that and it strategically makes little sense to reduce coach capacity and then add back more premium configured capacity. The configuration of the premium cabins on the 321Ts is not 35% less than what exists on the 762s. AA is making a strategic decision to cut coach capacity and also cut costs at a faster rate in order to make the transcon routes economically viable. Adding a bunch of premium capacity only will force down the yields where AA needs to make money at the very time when every other competitor except for VX is also adding and upgrading their premium offerings.
You can discount B6 if you would like but the simple fact is that no market can exist solely on the basis of the premium cabin although the JFK transcons might be the closest where it is possible to “siphon off” the best passengers. Yet UA is doing the same thing while B6, DL, and VX are all taking the approach that they will serve the entire market. B6 has been very successful in pushing AA out of many markets at JFK because of their lower costs. They, like DL, will offer premium cabins with amenities very similar to at least AA’s business class cabin and will have much lower CASMs by virtue of the number of extra seats they have; the coach passengers are covering the incremental costs of DL and B6’s larger/more densely configured aircraft.
But it is also about market share strategies. I am open to hearing examples you can think of but I can’t think of a single market in which a US network/legacy carrier has been successful over the long-term by using a market segmentation strategy – either “siphoning off” the low price or the high value end of the market. Again, the closest example is UA in the transcons but they have fallen to #4 in terms of total local JFKLAX revenue behind AA, DL, and VX (in that order) while in the JFKSFO market, UA is #1 followed by DL, VX, and AA. IOW, UA’s premium configured aircraft strategy has provided DL and VX with the opportunity to increase their total revenue.
As for VX, if the expectation is that VX will fail based on a spike in fuel prices, the other side of the equation would have to be considered including that huge portions of legacy carrier networks – including heavy reliance on small RJs to deliver passengers to hubs – would be impacted far more than for an LFC that is using fairly modern technology aircraft. VX has demonstrated tremendous staying power – more than they should have – but they are still here and they have had a negative impact on the total transcon market to which AA and UA are the most exposed.
Finally, it is worth noting that in the most recent quarter, AA’s mainline ex-fuel CASM was the third lowest among the 4 US legacies – higher than US and DL. US’ mainline ex-fuel CASM was only 1% lower than DL’s (on a non-mileage adjusted basis); positions within the pack are very subject to movement, also meaning that the ability to withstand competitive pressures is more significant than the actual CASM meaning revenue generation is a more significant indicator than ever.
While you often note that AA’s CASM will go down based on the arrival of new aircraft, nearly every other airline is introducing significant numbers of lower CASM aircraft than they presently operate now although in many cases they aren’t taking on the debt load in order to bring those new aircraft online.
Jimntx,
Yes, we know that the 762s were old and not fuel efficient but do you realize that AA carries on average more than 7500 pounds of cargo per flight on JFKLAX and JFKSFO precisely because it operates the only widebody service? Coincidentally, DL has added 767-300ER service from JFK-LAX which they say is transitional until DL’s 757s with lie flat seats are in service yet DL will have the only widebody service JFKLAX which means the chances are very high that a lot of cargo revenue that has been carried by AA could move to DL. Since DL's transcons 763ERs have 225 seats (+-) or more than 50 more than AA's 762s and DL can add in cargo revenue, the economics might favor DL continuing to operate several 767s in both the JFKLAX and JFKSFO markets in part driven by the reduced capacity from AA. JFKLAX and -SFO are some of the top cargo markets from JFK and AA has long been the top carrier. Not only is AA walking away from a large segment of coach passengers, they are also walking away from the cargo market.
I’m happy for the new beginnings that AA has in front of it and for the new opportunities that the 321Ts offer for AA. But a balanced perspective also requires acknowledging that there are significant challenges which AA has now and which the merger won’t necessarily address.
What is the relevance of DL's low-cost acquisition of used MD-90s and 717s in a thread discussing new transcon planes?
World, we heard you the last 10 or 12 times you preached to us the wondrous benefits of DL's used plane purchase. Why do you think it's relevant in every thread in which you post?
Yes, the MD-90s and 717s being acquired by DL are almost as fuel-efficient as new planes and your former employer is getting them for a song. Would you shut up about them already? It's starting to sound like Jeff Smisek and his constant repetiton of "network" and "787."
xUT
Veteran
Jeff was just on Charlie Rose:
http://www.businessweek.com/articles/2013-08-08/charlie-rose-talks-to-united-airlines-ceo-jeff-smisek
I am glad those 787's are pressurized to 6000 ft... LOL
B) xUT
WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
- 10,662
- Banned
- #15
FWAAA,
Who said anything about DL’s M90s or 717s?
Other airlines including AS, B6, and WN are all taking on new aircraft, in many cases with increased #s of seats yet those carriers are generating sufficient levels of operating cash in order to avoid increases in their debt levels (and DL is doing that with the 739ERs which are not used aircraft in addition to the 717s and M90s).
The point is that other carriers are adding fuel efficient aircraft as well so your long-held claims that AA’s CASM will go down sufficient to give AA an advantage cannot accurately be determined given that other carriers are doing the same thing.
Even though you frequently cite AA’s high average fares in the transcons, the percentage of premium (business plus first) seats on each JFK transcon carriers’ fleet is heavily skewed to the premium market for AA and UA already. UA has 35% premium (current or old PS, 20% on new PS 757); AA has 24% premium on the 762s, 27% on the 321Ts; DL has 9% on the 757s (both new and old) and 11% on the 767s; and VX which has 5% premium. The average fare spread based on the percentage of premium seats by each carrier doesn’t support the notion that average fares increase just because of the increase in premium seats. On the basis of the % of premiums seats compared to the average fare, VX is the clear winner – which says they get a lot higher average fares in coach than other carriers.
Further, UA’s reconfig of the 757s is keeping the total number of premium seats the same but the removal of the first class cabin and adding a lie flat BusinessFirst seat allows them to add about 30 more seats to the aircraft which should significantly improve the CASM. Given that UA has been doing narrowbody 3 class transcons for years, you have to believe they have recognized that the amount of space a true first class
cabin takes up doesn’t justify the higher costs and fewer seats.
And why does it bother you if Smisek talks about their “network” and their 787s or someone talks about DL’s used, but comparably fuel-efficient 717s and M90s? IF AA can win in the marketplace then what DL or UA does shouldn’t bother AA or you. BTW, Wall Street is concerned about the amount of debt that UA will take on in order to acquire those 100 new widebodies. AA’s strategy might be more heavily focused on narrowbodies but the key differentiation between AA and UA and the rest of the industry is precisely the huge refleeting plans that AA and UA believe are necessary while other carriers do not.
The great thing about the airline industry is that there is plenty of data available about the industry that makes it possible to determine if those strategies really do work. Given the huge expenses involved in refleeting, the results will become apparent pretty quickly. Specific to the transcons, it won’t take long for it to be obvious whether AA’s transcon 321 strategy is working or not.
Who said anything about DL’s M90s or 717s?
Other airlines including AS, B6, and WN are all taking on new aircraft, in many cases with increased #s of seats yet those carriers are generating sufficient levels of operating cash in order to avoid increases in their debt levels (and DL is doing that with the 739ERs which are not used aircraft in addition to the 717s and M90s).
The point is that other carriers are adding fuel efficient aircraft as well so your long-held claims that AA’s CASM will go down sufficient to give AA an advantage cannot accurately be determined given that other carriers are doing the same thing.
Even though you frequently cite AA’s high average fares in the transcons, the percentage of premium (business plus first) seats on each JFK transcon carriers’ fleet is heavily skewed to the premium market for AA and UA already. UA has 35% premium (current or old PS, 20% on new PS 757); AA has 24% premium on the 762s, 27% on the 321Ts; DL has 9% on the 757s (both new and old) and 11% on the 767s; and VX which has 5% premium. The average fare spread based on the percentage of premium seats by each carrier doesn’t support the notion that average fares increase just because of the increase in premium seats. On the basis of the % of premiums seats compared to the average fare, VX is the clear winner – which says they get a lot higher average fares in coach than other carriers.
Further, UA’s reconfig of the 757s is keeping the total number of premium seats the same but the removal of the first class cabin and adding a lie flat BusinessFirst seat allows them to add about 30 more seats to the aircraft which should significantly improve the CASM. Given that UA has been doing narrowbody 3 class transcons for years, you have to believe they have recognized that the amount of space a true first class
cabin takes up doesn’t justify the higher costs and fewer seats.
And why does it bother you if Smisek talks about their “network” and their 787s or someone talks about DL’s used, but comparably fuel-efficient 717s and M90s? IF AA can win in the marketplace then what DL or UA does shouldn’t bother AA or you. BTW, Wall Street is concerned about the amount of debt that UA will take on in order to acquire those 100 new widebodies. AA’s strategy might be more heavily focused on narrowbodies but the key differentiation between AA and UA and the rest of the industry is precisely the huge refleeting plans that AA and UA believe are necessary while other carriers do not.
The great thing about the airline industry is that there is plenty of data available about the industry that makes it possible to determine if those strategies really do work. Given the huge expenses involved in refleeting, the results will become apparent pretty quickly. Specific to the transcons, it won’t take long for it to be obvious whether AA’s transcon 321 strategy is working or not.
