AA to start JFK-LAX 1/7/2014 A321

[FWAAA]

FWAAA,
Who said anything about DL’s M90s or 717s?

I thought you were. Please accept my apologies.

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).

Unless AS or WN are going to begin JFK-LAX transcons with those new planes, they're irrelevant to this thread.

The new A321s at B6 are relevant - and they're going to be lower-CASM flights than AA's relatively high-CASM A321Ts. I've posted numerous times that these flights will feature lower trip costs but relatively high CASM (owing to their 102 seats).

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.

I haven't posted anything in this thread about AA's CASM dropping. Perhaps you should have addressed my claims when I posted them in the thread where I posted them instead of bringing up irrelevant off-topic items in this thread.

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.

I'm too lazy to even try to deciper the above, so if it will shut you up, then I'll concede: Delta will win the JFK-LAX transcon war. WT, I only mentioned the revenue that AA attracts on JFK-LAX to counter the unsophisticated argument related by jimntx that he heard from a friend at US that Doug Parker will never permit AA to fly 102-seat A-321s when the support for that argument is that US flies A321s with 180 or 190 passengers. I have no idea, nor do I care, whether AA wins the JFK-LAX race.

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.

You may be right. Then again, perhaps UA is simply failing to capture the First Class sales, and is losing those sales to AA. When your best efforts fail, changing course and trying something else is ok. On the other hand, perhaps Smisek is making a foolish decision and UA will suffer as a result. Look at E+. UA rolled out E+ and AA quickly tried to get the upper hand with MRTC. Not long after the fleet was finally converted, September 11 devastated the industry and AA's finances for several years. Yet short-man Arpey (in contrast to somewhat tall Carty) decided that AA could attract $150 million in incremental revenue by eliminating MRTC in a couple of steps. Meanwhile, UA was beginning to sell E+ and was claiming that it was producing lots of incremental revenue. And yet it was almost 10 years before AA finally matched UA with its MCE product. MRTC may have been a loser of an idea, but E+ (and MCE) don't appear to be such failures, yet Arpey ignored the benefits of E+ for nearly a decade. When Smisek took over at UA, he actually said that he wasn't sure whether UA would keep E+. Eventually, UA decided to keep E+ and add it to the pmCO fleet.

My point: Arpey may have screwed up by not selling extra legroom in economy for all those years. Smisek may be screwing up by abandoning 3-class transcons. Around the same time as AA announced the 3-class A321Ts, AA also announced that its 47 772s would lose First Class and join the DL/CO/NW/US model. Maybe Horton figured that by keeping transcon F, AA would hang onto the big spenders it already had plus pick up the ones who used to buy UA First between JFK and LAX/SFO.

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.

Neither "bother me." But that doesn't stop me from laughing at Smisek when that's all he has to offer the analyst community when they start pointing out UA's lack of real progress.

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.

I agree, and I'm certain that you'll be here early in the morning to trumpet AA's failure (if that's what happens). If AA's strategy succeeds, we'll see if you're as eager to post about it.

As for me, I think it will fail unless frequencies are bumped up to 15 or so. And even if the frequencies are increased to hourly, I'm not convinced that AA will win. But whether AA's strategy wins or loses - it's no skin off my nose.

 

[737823]

Also worth noting UA upped capacity by adding back an E- section. Previously the ps 752s were F/C/E+, now C/E+/E-. Increased capacity while giving UA ancillary revenue to upsell E+ seats since previously they were available at no additional charge to all passengers on JFK-LAX/SFO.

Josh

 

[WorldTraveler]

First, FWAAA, you're a good man to admit that you jumped to a conclusion about the 717s and M90s.

The significance about other carrier's fleet plans and JFK-LAX is that no airline - including WN and AS that don't even fly the JFK transcons - do benefit from their fleet decisions just as AA does. The 321 and related 319 will not be transcon only aircraft which means the costs and benefits that AA accrues for the 320 family will extend beyond the transcons - and what WN (for example) does with its 737-800s does affect AA's ability to competitively reduce its overall CASM and thus affect how WN competes with other carriers in direct markets where they do compete.

You do care about JFK-LAX and while it is no skin off your nose, I'm not telling you not to care. I am telling you that there are considerations about the transcon markets that should be considered with all the jubilation about the 321Ts, including the fact that DL continues to gain overall share in the transcon markets and its average fare is moving up as well. And when you consider that AA is walking away from a major cargo market, the impact is significant. Add in that UA is moving in the opposite direction from AA by adding seats back to its 757s and you have to ask if they don't know something that AA will soon discover.

I don't know how will "win" the transcons but since they will remain highly competitive, I'm not sure anyone will win them. But given that DL has been very aggressive in growing its presence in NY and it has largely been at AA and US' expense, no one who wants to intelligently talk about the transcon markets - which have been one of DL's weak spots - can't help but assume that DL will be very aggressive in looking for how to make AA's reduced capacity work for DL. And DL is taking a very different track with its financial strategies than the legacy carriers have traditionally done and what AA and UA are now doing. It isn't clear how it will pan out for them but when you consider that DL is showing profits, reducing its costs, and also improving its balance sheet as the low cost carriers have done, it is hard to believe that it won't benefit DL's ability to compete in key markets like the JFK transcons.

Keep the faith but also recognize that the industry continues to be highly competitive and also changes very quickly. Other carriers continue to make changes that will not only limit AA's ability to benefit by the choices AA has made but also ensure those other carriers are able to increase their overall business in the key transcon markets. That is what good businesses do.

 

[kirkpatrick]

One thing's for sure - the 767-200s have to go. Unless the company wants to commit a subfleet of 777s or future 787s to the transcon market, which I doubt, something has to take their place.

I think the three class A321 is a viable idea. There's quite a demand for premium seats in that market. If it doesn't work, the planes can be reconfigured to 16/165 like the A321S and still be competitive with what others are offering in the market.

MK

 

[MAH4546]

If it doesn't work, the planes can be reconfigured to 16/165 like the A321S and still be competitive with what others are offering in the market.

The non-transcon AA A321 fleet will have 24F.

 

[WorldTraveler]

Just to be clear, Kirkpatrick, I am not at all suggesting that AA's 321T strategy won't work just that AA may be making themselves vulnerable by walking away from a segment of the passenger market as well as a good deal of the cargo market. Even if AA keeps a couple 767s in the transcon markets - which would be with a very different product - they are walking away from a huge cargo market. That cargo will either go to freight carriers or to DL if DL retains its 767s after its lie flat 757s come online.

The 757ps strategy made a lot more sense when UA announced it given that they are so small at JFK. I fear that AA's 321T strategy will result in further shrinking in NYC, a market where they are already an underdog to DL and UA and the US merger won't give them enough added size to really tip the scales.

And yes the non transcon AA 321s will have a very similar configuration to the way many airlines have configured their 757s. The 321s and 739ERs will be able to take over most 757 flights within the continental US at lower costs. Plus, a lot of the US carrier 757 fleet is getting old.

 

[traderjake]

And yes the non transcon AA 321s will have a very similar configuration to the way many airlines have configured their 757s. The 321s and 739ERs will be able to take over most 757 flights within the continental US at lower costs. Plus, a lot of the US carrier 757 fleet is getting old.

The 321 is more comfortable than the 737 and 757 due to the wider cabin.

 

[traderjake]

American Airlines to launch its new Airbus A321 aircraft Jan. 7 on New York-Los Angeles route

http://aviationblog....les-route.html/

 

[kirkpatrick]

The non-transcon AA A321 fleet will have 24F.

Not according to the FA Manual. I'm looking at a page right now showing 16/165 for the A321S. Four rows of four seats logically labeled 1 through 4.

MK

 

[whatkindoffreshhell]

Unusual (for me) thumbs-up to WT for his assertion about the cargo revenue on widebody JFK-LAX flights. At minimum, this 7500# of cargo represents at least $10K worth of incremental revenue per flight. Probably a whole lot more if you allow for premium cargo.

 

[FWAAA]

The non-transcon AA A321 fleet will have 24F.

Not according to the FA Manual. I'm looking at a page right now showing 16/165 for the A321S. Four rows of four seats logically labeled 1 through 4.

MK

Shoot. Back on May 12, you told us that the A321S would feature 24F, 150 M/C:

http://www.airlineforums.com/topic/55532-airbus-staffing/#entry999180

What happened? 16F is pretty disappointing. Is it possible that the reduction in First Class seating was a Parker-inspired idea that will be tossed once the AA creditors give up on his impossible dream of a merger with US?

 

[jimntx]

FWAAA, better sit down and take a Valium. I agree with you wholeheartedly. As I fly as #1 most of the time (F/C flight attendant), I see that we need more, not less, seating in F/C. We are already dealing with disgruntled EPs who have played the upgrade roulette game and lost--because F/C was full of revenue passengers, they didn't get their automatic upgrade. I don't encounter many flights where we have a lot of upgraded passengers. Selling F/C seats does not seem to be a problem for AA.

 

[kirkpatrick]

Shoot. Back on May 12, you told us that the A321S would feature 24F, 150 M/C:

What happened? 16F is pretty disappointing. Is it possible that the reduction in First Class seating was a Parker-inspired idea that will be tossed once the AA creditors give up on his impossible dream of a merger with US?

You're right. I said that. I just came across an old notice with those numbers. Nevertheless the latest info available says 16F.

I'm headed to DFW for A319/321 training on the 20th of this month.

MK