Capacity Planning Reduction

[Skymess]

More bad news on the line.

This pilot retirement thing is really jacking things up. I don't blame them for getting out while the gettins was good. I blame AA for not training replacements.


Lauri Curtis Hotline Today:

Cabin Condition and 2008 Capacity Planning Update

This is Lauri Curtis, and today is Wednesday, February 27, 2008


I want to give you an update on two topics, so thanks for checking in
today. The first is about a new initiative aimed at improving our
customers' perception of our interior cabin appearance and the second
is a proactive response to economic conditions regarding our capacity
planning for 2008.


Cabin Condition Improvements Well Underway


Besides the additional cleaning provided by Cabin Service, our
Maintenance and Engineering folks have refocused their efforts on
getting cabin items fixed:



We perform regular maintenance and inspection checks on all the seats
on our aircraft. (A) Checks are performed every seven to ten days,
and B Checks are performed every eight to ten weeks. We recently
expanded the items to be repaired during both of these maintenance
and service checks to include the following items;


-Seat Recline
-Tray Table
-Armrest
-Footrest
-Seatbelts
-Reading Lights
-Cabin Lighting
-Power Ports
-IFE
-Lavs
-Overhead Bins
-Window Shades



Year to date, we have cleared a total of 7912 items on all aircraft.
Prior to this new initiative, we were repairing approximately 10
items per maintenance check on narrow body aircraft; we are now
clearing an average of 40. On wide body aircraft, our repairs went
from 20 to 47 items per maintenance check.



In addition, to expedite the repair of cabin interior items that you
have reported, Maintenance and Engineering has formed a Cabin Systems
Inspection (CSI) program. The CSI involves five dedicated teams made
up of 36 total mechanics that work on every aircraft in our fleet
once every six months. All combined, about 150 aircraft inspections
are completed and approximately 6000 interior items are repaired
every month during the CSIs. We spend $1.5 MM on parts and material,
and $5 MM on labor for the CSI checks.



Additionally, M&E has a dedicated Tech Services Team in Tulsa that
focuses on In-flight entertainment, seats, and cabin interiors and
works to supply parts and technical support to every aircraft,
everyday to ensure these items are addressed as soon as possible. You
are the source of information for the M&E team. Thank you for
ensuring that items in need of repair are included in the logbook so
that they can be addressed expeditiously.>



Your feedback via the OSR has been very helpful in identifying items
that need to be addressed. At the same time, we also need to ensure
that all malfunctions reported via the OSR are also recorded in the
logbook to ensure that the issues are resolved in a timely manner. If
you encounter any cabin or IFE issues, please also ensure that the
Captain is informed.


2008 Capacity Plan Adjustments


As you know, we had an unusual number of pilots retire on February 1.
That, coupled with high fuel prices and other economic factors has
led us to make some adjustments to our 2008 capacity plan. Being
proactive in this respect will minimize customer inconvenience and
allow us to realize the best possible revenue results. The
adjustments will include international and domestic schedule
reductions.



International schedule reductions will include service changes to
routes with lower seasonal demand, such as some Caribbean markets in
June.

We will fly select routes with 767s instead of 777s to help reduce
capacity.

We will delay the start of our second daily flight between JFK and
London Stansted from March 30 to August 1.


That's it for this week, please fly safely.

 

[eolesen]

Oil closed at $102, and you really think this is all about the pilot retirements? If you ask me, it's just a really convenient cover for economic reality settling in at Centerport....

They just closed LGW. STN expansion is delayed. I suspect there will be a few more cuts coming as reality sets in deeper...

 

[flyhigh]

Probably a combination of the two. The retirement thing, as much as Skymess thinks it may be, is not something you can plan for so easily. People can give less than a month's notice. With that said, you plan for average because that's what you can solve for. If it is more than that then you take a hit. The idea that AMR or any other carrier has some amazing ability to know that some individual is going to make a very personal decision on Tuesday this month instead of next is foolish at best. The fact that oil closed where it did means that AMR has to be more cautious as well.

 

[WingNaPrayer]

The idea that AMR or any other carrier has some amazing ability to know that some individual is going to make a very personal decision on Tuesday this month instead of next is foolish at best

Didn't these pilots give AA some type of heads up that they were going to, or may be going to retire, something like 90 days notice or did I misunderstand?

 

[Skymess]

Didn't these pilots give AA some type of heads up that they were going to, or may be going to retire, something like 90 days notice or did I misunderstand?

Yes. These pilots were locked in a few months prior to february because it would have been their original forced retirement age. They all had to retire right before their 60th birthday prior to dec 17, 2007. These people locked in and AA knew they were going. They CHOSE not to train replacements in the off chance that they CHOSE to remain past 60 once the age had legally risen to 65.

I don't know of 1 of our pilots who would choose to stay past 60. I haven't met one yet. AA took a chance and it backfired.

I don't believe pilots can give such short notice as 1 month unless they suddenly go out sick. I don't know for sure, but their complicated retirement formula doesn't seem as though it allows a quick exit. Anyone who knows for sure can chime in here.

Whatever the case. The bid sheet for JFK this month was small. The trips aren't moving either. Everything is kind of stagnant as is usually the case when people take leaves, not enough junior people hold lines, and people start to panic and hold tightly onto their trips.

 

[FWAAA]

I thought that some of these pilot retirements were also guys under age 60 who notified AA on or before 10/31 that they would retire at the end of January, unless they changed their minds (which, IIRC, they are permitted to do). And the magic behind 10/31 is that the optional lump sum portion of their pension is based on the stock values as of that date and they are permitted the 90 days to evaluate whether they want to actually retire at the early date. Of course, the markets tanked after Halloween, and they'd be fools to not retire and lock in those higher asset values. Add to that the best 4 in 10 rule and retirements are gonna spike this year and next.

But I agree with eolesen - oil prices are killing the bottom line, the economy is cooling, and the retirements obviate the need to furlough more pilots as marginal routes are cut and new routes are delayed (like the 2d STN flight). So perhaps AA's lack of competence here will turn out to be a case of dumb luck.

I noticed the other day that DL is delaying its JFK-LOS flight and other African flights. I expect to see more airlines doing more of the same. Capacity reductions may happen even without consolidation.