" Right Gauging the Fleet "

[topDawg]

As you well know, APA has a long history of stonewalling in its own attempt to "save its profession." Of course, that has contributed to AA's problems, dating back to 1996 when the first RJ TA was rejected. At that time, AA was already way behind DL with 50 seaters, which DL began flying at Comair and ASA in 1990 or so. Eagle didn't get its first ERJ until 1999 because of a stubborn (and mistaken) belief that preventing AA from paying Eagle to fly 50 seaters would somehow preserve high pay for all. Didn't work out that way, and thus, DL had a nine year head-start on AA.

For the past decade, that's continued. By time AA built up a large fleet of 50 seaters, things were already changing and 70 seaters were the rage. AA finally has 47 of them. DL has 254 70 to 90 seaters flying for it. That has given DL a huge advantage.

"But if APA gives AA permission to fly all those 70-88 seaters at Eagle or other regionals, then AA won't fly any narrowbody mainline planes." Uh-hu. We've heard that song and dance before. At Delta, the mainline fleet included 547 narrowbodies as of 12/31/11. Even subtracting out all the 757s leaves 393 mainline narrowbodies. This year, DL will remove the DC-9s but will also accelerate retirement of the 40-50 seat CRJs.

AA's huge orders of 737s and Airbus narrowbodies may or may not come to fruition. One thing is clear, however: Without the ability to outsource 150-250 total 70-88 seaters, just like DL enjoys (and like UA), AA won't need all those new 737s and A320-series orders.

The APA's stonewalling on RJs isn't the primary cause of AA's current troubles, but it's a clear contributing factor. In AA's proposal to the APA prior to Ch11, AA proposed placing all new 70 seaters and larger on the mainline cert with APA crews. With the 1113 ask, that has changed to everything above 88 seats. I agree with Mach85ER, though - even if APA gets behind this proposal, will the APFA and TWU go along with it as well?

How about the fact that our mainline fleet lost ~120 airframes with no, none, zip, nothing, replacements? how is that good for the mainline employees? How has CO been able to make it with out a single 70 seat jet?

and saying AA will be gone with out E90s is the biggest bunch of horse s**t i have even seen. Please, PLEASE back that up with data. (again, CO didn't have a single jet over 50 seats and they were doing very well without them.)

 

[topDawg]

Try again --- AA's biggest growth period ENDED when RJ's weren't allowed on the property....



Wrong again. If AA's jump to over 100,000 employees was in 2000, that's *BEFORE* the TWA deal. AA simply got fat during the years it was making money (up until 1999).



Hmmm. There were only a total of 19 MD11's, yet there are 47 777's on the property. I don't remember if the DC10's were operating beyond 1/2000.

For every F100 and 727 parked, at least one 738 was added. All of the PW powered 757s were replaced either type for type or with 763s.

I'll try to pull some numbers tomorrow to show Eagle's "growth", and I don't think it's going to add up quite the same as you're making it out to be...

AA may have shrunk in terms of employees, yet I don't think there was as much contraction in ASMs... I'll see what I can pull on that as well...

wait, huh? My math says thats off.
AA had 28 717s, 65 727s, 389 M80s, 75 F10s, and 27 757PW.
AA has 171 738s, and 197 M80s.
So that is ~216 planes that have been parked with nothing to replace them. Look at that, MQ has ~250 jets....hmmmm guess that is growth

and i don't know what you mean by that 757 type for type or 763 part. AA hasn't taken any new 57s or 67s after they dumped the PW 57s.

 

[john john]

US started the 80-90 seat RJ trend (thanks to HP), the others are following.
Jim

thanks to ALPA and HP

 

[JFK Fleet Service]

The 190 is such a hit jetblue has pretty much opted to keep their fleet at 75 frames and nothing further.Frontier seems to be losing their ass as well with them.

In typical AA fashion they'll do a full court press for a sunsetting flavor of the month just like with the 37 and 44 seat money losing holes in the sky.

I see WN is working with Boeing to find homes for the 88 717's they inherited from AirTran.Maybe they could shunt them back to AA.105 seat airplane,mainline,good fuel burn...nah,never happen, Boston Consulting would advise against it.

 

[topDawg]

DL has accelerated its plans to retire its 50-seaters. AA has about 200 37/44/50 seat ERJs. While you may be right, perhaps the plan is to get 255 70-88 seaters to replace most of AA's small ERJs?

Right, I mean that is what they do, they truly outsource because they want to help the employees.

Oh and glad they are parking money losing 50 seaters, Glad to see that they paid Billions for OH and EV only to have them made worthless.

PS you may want to point out that they parked 40 or so DC-9-30/40s and added 32 CR7/E70 aircraft. That is truly winning.

I love the management types. "Hey its ok, I'm making 3x times what you are, so its is totally ok for you to take it even more."

Don't be stupid for those out their reading this, more jets at other airlines "DBA American Airlines" WILL cost jobs. It happened at United, It happened at Delta and it happened at US. Your management will promise that it wont happen to you, but it will. Been there, done that and i think i have a few of the t-shirts. :angry:

 

[WorldTraveler]

You mean doing what the other big legacies have done? AA started the B-scales, the others followed. DL started the RJ trend, the others followed. US started the bankruptcy trend after 911, the others followed. US started the 80-90 seat RJ trend (thanks to HP), the others are following. No legacy said "We have these restrictions that we don't dare touch so we've got to make the best of what we have." Why pick on AA but not others...

Jim

the difference is that other companies have adapted and succeeded.... yes, in some cases they used BK to dump RJ contracts, but they adapted and overcame the obstacles. We are still waiting to see what happens with AA and its RJ fleet - but the chances remain strong that the only way AA can get rid of a bunch of them quickly is if Embraer takes them back en masse in exchange for a E190 order.
The 190 COULD deliver a smaller aircraft solution for AA - but as noted even B6 w/ costs lower than what AA will come out of BK with - is not expanding its Ejet fleet. And if you compare CASMs between the CR9 and CR7s configured to the maximum 76 seat limit that some network pilot agreements allow, the CR9 and 7 have considerably lower CASMs in part because they are smaller aircraft. You can look at E175 costs and adjust them for a larger airframe and 12 more seats if AA goes for an 88 seat E190 but the CASM advantage that AA might gain would be short term.

The trend among multiple airlines is to increase the size of the aircraft to help push down CASM. UA and CO parked/reduced the 735s and WN is buying 738s and will continue to do so. DL is replacing its seats w/ slimline models to be able to add seats. And Dawg you might want to consider that DL is buying and refurbishing 40-50 M90s as replacements for the DC9s while also pulling out dozens of 50 seaters. In terms of total seats, DL has not increased the number of seats on RJs and in some cases has been adding mainline seats faster than on newer RJs.
.
As the industry consolidates, it will be less and less necessary for each mainline carrier to offer 20 RJ flights a day to 2-3 different hubs - which will make it possible to use more and more mainline aircraft. Part of DL's ability to cut the number of small RJs has come as connecting capacity over CVG and MEM has been reduced. If the industry further consolidates, there remains the potential to reduce the number of hubs and the number of small RJs that are necessary to connect small cities to a half dozen or more large hubs.
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On the int'l side, a big part of DL's turnaround came from moving widebody aircraft from the domestic system to the int'l system where those planes can generate more revenue overall while also employing more crew members (both because those planes are flying longer flights and are flying more hours per day).
A big part of the revenue boost that DL got from its restructuring and that it further expanded on with the merger was by redeploying the international capable fleet... something that AA can't do and UA/CO can do to a much less degree since their networks didn't complement each other to the degree that DL's did (ie UA/CO are shifting some flights and equipment between IAD and EWR and in the Pacific but to a much less degree than DL did pre-merger or NW did post merger).
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Having the right aircraft for the mission is necessary - and so is being able to get rid of airplanes when they are no longer the right aircraft.
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Consider also that AA's aircraft order book will exceed by about 3X the value of the company after it comes out of BK... no other US airline has ever had an order book as large relative to the size of its market value. Does it really take $25B worth of new aircraft - even at discounted prices - to fix AA's business model from both a revenue and cost standpoint when other carriers can do it for 1/3 of that amount?

 

[eolesen]

wait, huh? My math says thats off.
AA had 28 717s, 65 727s, 389 M80s, 75 F10s, and 27 757PW.
AA has 171 738s, and 197 M80s.
So that is ~216 planes that have been parked with nothing to replace them. Look at that, MQ has ~250 jets....hmmmm guess that is growth

and i don't know what you mean by that 757 type for type or 763 part. AA hasn't taken any new 57s or 67s after they dumped the PW 57s.

AA took delivery on ~30 757 and 763 aircraft after Jan 2000. The PWs were written out of the fleet plan when the acquisition took place, and the 2002/2003 deliveries covered those shells.

With the closure of the STL and SJU hubs. It's certainly convenient to include all those TW shells in your argument, but when essentially all of those ASMs are gone, it rings a little hollow, which is why I've always compared AA in 2000 vs 2010 when trying to gauge growth or contraction.

 

[BoeingBoy]

blah, blah

It'd be nice if you knew what you're talking about. The E190 doesn't fit the RJ limits AA is proposing - it's an upper 90-some seat airplane, not an 88-seat airplane. Making it fit the 88 seat AA proposal for RJ's by unnecessarily lowering the seat count of course makes it less efficient. Just look at who is flying the E-190 - US and B6 as mainline and F9 as it's owner Republic wants and scope allows.

The CRJ 900 does fit the size requirement proposed by AA without the penalty of unnecessarily reducing seats, and because of the smaller cross-section is a little more efficient than the E-jet family - like the 737 is a little more efficient than an equivalent A320-family plane. Of course, more than a few FF's refer to the CRJ's as "Satan's Chariot" because it is less comfortable than the E-jets. But the CRJ does have commonality in it's favor also.

No airline, in bankruptcy or out, has replaced 200 jets of any type overnight - even if delivery positions were available it'd take years to manufacture that many of any airplane. So the choice of replace or be stuck with what exists is a false choice. The real choice is to have the RJ feed while the smaller RJ's are replaced or eliminate the RJ feed, which no network airline has done. That's what AA is involved in now - renegotiating leases/EETC's to be able to make an orderly transition while lowering the cost of small RJ's - and it's a normal part of bankruptcy.

And of course the usual DL is doing everything right and will squash the competition...

Jim

 

[eolesen]

Jim, you're right that no airine could replace that much capacity overnight under normal conditions.

The wildcard that might be worth considering is what is happening at CO/UA. Should ALPA get their way and win a regressive scope at COUA (ie preserving the CO scope clause which means the number of 70+ seaters get curtailed significantly) then there may be a lot of feed suddenly available on short notice. Also worth considering is that Republic and Frontier appear to be de-tangling from each other (the MKE cuts are largely RP metal, no?), which may result in making more RP capacity possible....

 

[WorldTraveler]

Jim,
do you think you could TRY to engage in a civil discussion, even if you don't agree with the other person?
.
The whole point is that there is NO aircraft that would fit the 88 seat scope that AA is proposing so the choice would either be to remove seats from a larger aircraft or stuff an existing aircraft full of seats.

Given that DL and UA and US all have first class cabins on their large RJs, AA would be shooting itself in the foot with its best customers by not offering a first class cabin.
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Where the 88 seat proposal came from, I don't know, but there isn't an aircraft that really fits the bill - and yes you are right that if they pulled seats out the CASM would look even worse.
.
No airline has replaced anywhere close to 450 aircraft - or over 75% of its domestic fleet over even a 5 year period and the same percentage could be said about a carrier's RJ fleet - the point still remains that AA is building its POR around a huge refleeting that still doesn't solve all of the problems (ie there is no known answer to the regional/small jet problem) but they are at best planning to spend far more on new mainline than any competitor - with huge debt costs that would vastly overshadow whatever operational gains AA might gain.
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UA will not accept elimination of the use of large RJs. They will operate two airlines for decades before they give up the right to use the large RJs they have.
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Also, several people keep citing the SIZE of airline fleets as if that is an indication of how much flying is done.
Block hours is the metric that is used to compare fleet size because it factors in usage.
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The reason to mention DL is to show that the increased usage DL got out of its widebody fleet helped offset the decrease in the number of aircraft of the domestic fleet which is a big reason why DL didn't get the backlash from labor that others have had. The fact that DL is pulling out small RJs as fast as or faster than it is adding larger RJs helps also to show that DL isn't growing its regional carrier operations and their traffic reports show that.
.
AA doesn't have the ability to do the same thing that DL did and when you add that to the fact that AA has to deal with its RJ problem (which is unsolved so far) plus add a bunch of mainline capacity - the idea that they think they can do that just doesn't add up with the reality that fuel prices continue to rise, AA isn't planning for a merger w/ someone that has an old fleet, and they aren't adding hubs. How do they intend to use all those new planes?

 

[BoeingBoy]

Jim, you're right that no airine could replace that much capacity overnight under normal conditions.

The wildcard that might be worth considering is what is happening at CO/UA. Should ALPA get their way and win a regressive scope at COUA (ie preserving the CO scope clause which means the number of 70+ seaters get curtailed significantly) then there may be a lot of feed suddenly available on short notice. Also worth considering is that Republic and Frontier appear to be de-tangling from each other (the MKE cuts are largely RP metal, no?), which may result in making more RP capacity possible....

The problem with that is that the 70-seat RJ's are under contract so there would have to be a transition period - no bankruptcy, no reject contract. Either that or UA/CO would be paying for feed they couldn't use (which they're unlikely to agree with). Republic is trying to sell/spin off F9, which is a big enough can of worms for a whole new discussion. But Republic only operates about 21 70-99 seaters for F9, which includes the E190's, so not a lot of planes there. The vast majority of those 21 planes are E190's (about 17), which are bigger than AA's proposal would allow except at mainline. Of course, nothing in AA's proposal prevents it from operating the big RJ's as mainline. They have proposed that lowest pay scale for a range of sizes between 88 and about 140 seats. So that may be the plan, but it would take time to implement.

There just aren't a lot of 70-88 seat planes out there that aren't already under contract to someone.

Jim

 

[jimntx]

Of course, nothing in AA's proposal prevents it from operating the big RJ's as mainline. They have proposed that lowest pay scale for a range of sizes between 88 and about 140 seats. So that may be the plan, but it would take time to implement.
Jim

And, therein lies the rub. The APA has dug its heels in for years regarding the E190. They saw it as a replacement for the S80 and (IIRC) demanded same hourly pay for the E190 as for the S80. I may be wrong, but I think APFA was also demanding same hourly pay rate if the smaller plane came to mainline, but our pay rates are based on years of service, not equipment type. Since there are (give or take) 40 fewer seats on the E190, the numbers just didn't work.

Considering the company's failure to bargain in good faith over the past few years, at this point I don't see APA or APFA changing their positions short of contract abrogation.

 

[BoeingBoy]

but our pay rates are based on years of service, not equipment type.

That may be (and probably is) true for the FA's and most other employees, but not for pilots. AA's pilots still have some of the calculated pay from the old days - the only airline still having that - where things like aircraft weight and speed are pretty big factors in pay. That used to be common for airline pilots, but has all but disappeared in favor of pay groupings based loosely on aircraft size - just as AA is proposing to the APA.

Jim

 

[Super FLUF]

They saw it as a replacement for the S80 and (IIRC) demanded same hourly pay for the E190 as for the S80.

No, you don't recall correctly. The pay was around the same as F-100 pay. At the negotiating table recently APA proposed an average of current operators of the E190. It was summarily rejected and shoved back across the table. Management wants the LOWEST pay in the industry PERIOD.

Since there are (give or take) 40 fewer seats on the E190, the numbers just didn't work.

OK, so please tell us what numbers DO work. Please include a detailed breakdown of CASM along with your financial analyst curriculum vitae. Maybe the "numbers didn't work" because AA was paying YOU too much money. Did that factor into your calculations?

 

[BoeingBoy]

At the negotiating table recently APA proposed an average of current operators of the E190. It was summarily rejected and shoved back across the table.

A move APA may regret. With only three U.S. operators - US, B6, and Republic - the average is there for all to see and it's more than what is in the term sheet. Don't worry about being the lowest in the industry, though. US East is lower.

Jim