DOT decision on AA/BA

[JFK Fleet Service]

It's about time AA grow up and add 747'8's to its fleet. There are plenty of suitable routes: ORD-LHR, DFW-NRT, MIA-EZE, etc.

The 748 is an enormous amount of capacity, and I don't really see anything other than some ORD-Asia routes to fully utilize the capabilities of the plane.
Plus the passenger variant isn't exactly burning up the order book, it could end up an oddball type like the 747-300 was.

There is also the long standing AMR aversion to four engine aircraft to keep in mind.

I watched the first flight of the 748F the other day, it's an awe inspiring machine but the 748 is ultimately too much machine for AMR.

 

[fltguymk]

Just read page 22. Interesting. All I have to say is, would you rather fly on a three class 777 to LHR on BA or a 2 class 757 on AA? The answer is simple. The wide body is much more comfortable. AA will operate two of it's LHR flights on the 757 soon. With BA operating roughly the same schedule on 777's and 747's, why would you even bother with AA? I see AA losing the flights out of BOS.

 

[MERV]

Just read page 22. Interesting. All I have to say is, would you rather fly on a three class 777 to LHR on BA or a 2 class 757 on AA? The answer is simple. The wide body is much more comfortable. AA will operate two of it's LHR flights on the 757 soon. With BA operating roughly the same schedule on 777's and 747's, why would you even bother with AA? I see AA losing the flights out of BOS.

They do it because of ops reason they might be using those B772ERs to asia or new destinations that could use those wide bodies. Seat capacity will fall and at same time increasing prices to LHR. Same time given some market share to one of your partners.

 

[eolesen]

With ATI, there really is no more of the "our share" and "their share" to worry about --- it all gets pooled via a joint venture entity. It won't matter if the customer flies on BA or AA -- in JV markets, both carriers will get a proportionate share of the revenue. And since the share is typically split based on how many ASM's you're contributing to the JV, there's incentive for *both* carriers to operate as much as they can.

The 747-8 is never going to be on AMR property. If APA and AMR ever come to a contractual agreement on ultra-long-haul flying, you might see 773s enter the picture, but as I've said before, you don't buy airplanes to serve one or two markets -- you find what fits no less than 20-30% of your long haul markets...

 

[BoeingBoy]

Again, I don't see anything requiring losing slots in the BOS market...

Page 26 - "We tentatively determine that four slot pairs are necessary to remedy the potential harm, divided as follows: two slot pairs earmarked for the Boston-London Heathrow market (the “fixed slotsâ€￾) and two slot pairs to be used at any U.S. gateway for services in the U.S.-Heathrow market (the “flex slotsâ€￾).

Jim

 

[eolesen]

Jim, I read the statement you quoted to mean two pairs of surrendered slots are reserved specifically for new entrants in the BOS market.

What's not clear is if DOT is intending (or demanding) they actually give up slots in the markets any "new entrants" apply for. It's also not a practical inferrence with regard to the flex pairs.

If HA decides they want to add HNL-LHR and applies for one of the flex pairs, neither carrier has a corresponding slot pair to surrender. Should US decide that PHX-LHR is in the cards, or CO decide that a second IAH-LHR is justified, I don't see DOT requiring BA to surrender their only slot pair in those respective markets.


"Earmark" is pretty clear when it comes to livestock (marking/notching the ear has been used for centuries as a way of identifying animal ownership, a lot more humane than branding, and now mostly replaced by tagging as opposed to notching), but it's not as clear as a sound legal term...

FWAAA or any other lawyers, feel free to throw in your free interpretations of "earmark".....

 

[BoeingBoy]

Thanks.

Jim

 

[777 fixer]

The 777-300 is not that much bigger than a 777-200. Besides, the 777-300 comes only with a GE90 engine, now outdated, as is the 777. The 747-8 comes with a GENX engine, as does the 787. I think AA's future resides with the stretch version of the 787 and some 747-8's.

Outdated? The 747-800 is nothing more than a stretched 747 with new engines, changes to the wing design and raked wingtips. The only thing we could be sure of if AA were to order it, not going to happen, is that AA would have a large 747 that has nothing in common with the rest of its fleet.

The days of large four engine aircraft dominating Trans Atlantic/Pacific flights is over. Emirates briefly flew the A380 from Dubai to JFK. They stopped and replaced it with a 777-300ER. That's the problem with aircraft like the A380 and 747-800. They’re good when the economy is doing okay, when things go to pot they’re a big white elephant around your neck. I don't think this is lost on the airlines. The A380 has been up for sale for nine years and has gotten only 202 orders, four last year. More freighter versions of the 747-800 have been ordered than the passenger version.

 

[MERV]

US DOT has just has granted ATI for one world partners over the atlantic. Let see what's the out come from the EU I hope that the EU don't make any changes to slots divestment.

"If the decision is made final, American and its oneworld alliance partners British Airways, Iberia, Finnair and Royal Jordanian Airlines would be able to more closely coordinate international operations in transatlantic markets,"

BA, Iberia and American have also offered to modify their plans to share more of their lucrative transatlantic routes in an effort to settle a competition dispute with the European Union.

US GRANTS ONEWORLD ANTITRUST IMMUNITY
http://news.airwise.com/story/view/1266233890.html

 

[FWAAA]

Jim, I read the statement you quoted to mean two pairs of surrendered slots are reserved specifically for new entrants in the BOS market.

<snip>

FWAAA or any other lawyers, feel free to throw in your free interpretations of "earmark".....

I've read the decision a couple of times and I agree with your interpretation. AA/BA needs to make two pairs available at below-market rates for 10 years, perhaps by lease (my paraphrase - who knows what discount would be acceptable?), for new entrants to start BOS-LHR, but AA/BA need not reduce frequency on this route. If nobody wants them for BOS-LHR, AA/BA must still make them available for the 10 year period in case someone applies to AA/BA for them.

If Star Alliance wanted to fly BOS-LHR, they've got the feed in jetBlue, in which LH invested a few hundred million a few years back. If the Leftover Alliance wanted to fly it, I suppose DL could place an ex-AA/ex-TWA 757 on it until it lost enough money to give up.

Slot transfers make very little sense to me given that DoT recognizes that NW, CO, DL and US were all able to acquire slots to move all of their LGW service to LHR in the past 18 months. Obviously, the secondary market in slots has worked much better than government bureaucrats predicted.

In AA's victory press release, it didn't concede that the JBA would willingly give up the four slot pairs (two for BOS and two for any other city(ies), but I don't see much upside in fighting too vigorously - AA and BA got basically what they've wanted for 13+ years: the chance to play on an equal footing to that enjoyed by NW/KLM (now DL/AF) for over 15 years.

As to the airliners.net-style discussion of AA's need to order 748s or 777-300s, I'd love to see shiny 748s with AA's red, white and blue stripes, but I don't want to see AA bankrupt itself to satisfy airplane nuts' emotional needs. Eventually, AA will begin to take deliverly of what will likely be at least 100 787s that will permit it to fly anywhere in the world it can make money.

 

[star power]

Will DOT rethink and issue a admendment to AA/BA/IB ATI when VS go to Star/A. Will the slot transfer requirements be reduce to - two fixed slot at in the BOS/LHR market- or totally reduce to no slot transfer at all. -fixed or flex-.

VS would bring 30+ UK/US slots to the Star/A UA/CO/LH ATI.

SRB and SI could come to a agreement with VS to apply for ATI with Skyteam DL/NW/AF/KL, oops NW part of DL. VS would still bring 30+ UK/US slots.

SRB has said that he will not joint O/W, when he was ask if he thinks VS will joint a alliance.

DOT may have to re-shuffle the deck on slot allocations.

 

[joanne]

AA's aircraft dilemma ?

Grab a half dozen 777-200 LR Worldliners (the ONLY A/C today that can fly any 2 city pairs in the World, then the problem is solved, especially if SYD should pop up on the Radar screen.)

 

[eolesen]

Unless I'm missing a press release about VS joining Star, that's just speculation on the part of enthusiasts.

If anything, I could see Virgin forming its own alliance with the Virgin branded carriers, and perhaps bringing in one of the Gulf carriers and Malaysian.

 

[lpbrian]

The 748 is an enormous amount of capacity, and I don't really see anything other than some ORD-Asia routes to fully utilize the capabilities of the plane.
Plus the passenger variant isn't exactly burning up the order book, it could end up an oddball type like the 747-300 was.

There is also the long standing AMR aversion to four engine aircraft to keep in mind.

I watched the first flight of the 748F the other day, it's an awe inspiring machine but the 748 is ultimately too much machine for AMR.

Disagree. If we are to rub feathers with JAL, BA, QF, we need the big iron.

 

[eolesen]

Disagree. If we are to rub feathers with JAL, BA, QF, we need the big iron.

Look at the fleet planning for those carriers... BA, CX and JL are both divesting of their 747 fleet in favor of ETOPS capable airframes. As I said last month on the "JAL is going to Skyteam" thread, that's been the trend for just about all carriers on the Pacific, and it has been the trend on the Atlantic for even longer.

QF is in a bit of a corner, figuratively and geographically. At the time they invested heavily in the 744, there was no other airframe choice that could fly to/from their isolated corner of the South Pacific, and financially, they can't their A380 commitments have them pretty stretched. ANZ, with similar geography, had the same problem, but with a widebody fleet of about a dozen aircraft, had less of a hurdle to start replacing the 744s with ETOPS.

There's a reason the order book for the 747-8 is so thin, aside from freighters. It's also not a coincidence that QF have started to go to a mixed density on the 744 fleet, some F-J-P-Y and others just J-P-Y.

If they're not selling the premium seats, they'll never break even with back of the bus revenue. With the larger airframes, the problem just gets worse because you're carrying around a lot of dead weight.

AA's got the right fleet for the North Atlantic. They could do better with the contractual ability to operate more with the 75ER, and there are a few routes which won't work with the 772 but will with the 787 when they show up. But a larger airframe? No way.