" Right Gauging the Fleet "

[tom barry]

With regard to the "88" seat discussion/E-190,
Fact: the Passengers ($$$) Love the 190 vs CRJ-7/CRJ-9 (lets use "this" for starters)

While the standard 2 class config. coming off the production line is 8/88 = 94, someone please tell me HOW AA loses money if they reduce Y from 88 to 76,....BUT ADD 4 MORE F/C seats (from 8 to 12 )

12 plus 76 , when I went to school WAS "88" !

With a range of 1800 knm and used wisely by AA on it's elaborate domestic rte. system (granted, Not so elaborate now), this baby could be (for AA) the best thing since "sliced bread".

It's dam*ed near the same theory of putting a 737 on some 757 routes. (think BOS-ORD for example)

And don't for a minute think AA would charge "Joe Valise" less $$ to ride on a 190 vs a 737 or 757.

Moe the cubicle beancounter in HDQ, didn't just pull the # 88 out of thin air !!!!!!!!!!!

I think it was Fred Thompson, who told Alec Baldwin in the "Hunt for Red October",...................................... "The russians Don't take a DUMP son, without a Plan !

 

[jimntx]

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.



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?

Excuse me. For a moment there I forgot that pilots are like the Virgin Mary--without sin or error. Mea culpa. Mea culpa.

 

[WorldTraveler]

With regard to the "88" seat discussion/E-190,
Fact: the Passengers ($$$) Love the 190 vs CRJ-7/CRJ-9 (lets use "this" for starters)

While the standard 2 class config. coming off the production line is 8/88 = 94, someone please tell me HOW AA loses money if they reduce Y from 88 to 76,....BUT ADD 4 MORE F/C seats (from 8 to 12 )

12 plus 76 , when I went to school WAS "88" !

With a range of 1800 knm and used wisely by AA on it's elaborate domestic rte. system (granted, Not so elaborate now), this baby could be (for AA) the best thing since "sliced bread".

It's dam*ed near the same theory of putting a 737 on some 757 routes. (think BOS-ORD for example)

And don't for a minute think AA would charge "Joe Valise" less $$ to ride on a 190 vs a 737 or 757.

Moe the cubicle beancounter in HDQ, didn't just pull the # 88 out of thin air !!!!!!!!!!!

I think it was Fred Thompson, who told Alec Baldwin in the "Hunt for Red October",...................................... "The russians Don't take a DUMP son, without a Plan !

because domestic FC is almost entirely upgrades... network airlines provide domestic FC because it is provides value to their frequent flyer program. There are routes where people pay for premium classes but on the majority of the domestic system, FC exists as a marketing tool.
.
and do you really want to put a clause in a labor agreement that is specific to one aircraft type? Even if AA succeeds in getting Embraer to take back scores of ERJs, they will just be locking themselves into another aircraft which may or may not be the right solution long term - and they are still starting the process long after other carriers.
.
You still may see DL and UA decide that they really do not need 20 RJ flights a day to a city like DSM or LIT and instead they are back to a half dozen - which worked just fine for the industry long before RJs came along.
.
Part of the problem w/ RJs relative to larger mainline aircraft is that you can't get ALL of the costs proportionately sized to the aircraft... station costs are still about the same for a larger aircraft and unless you give that aircraft to a regional carrier, you still have mainline costs.
And even with crew, you either get into a knock down dragout w/ labor in order to get crew costs down or you end up with costs disproportionately high. Remember that even if hourly rates for crew members are even 2/3 of what a crew member is paid on a 320 or 738, benefits costs are almost identical for all employees ... ie you don't have lesser health care benefits just because crews fly smaller planes.
And then you have to consider that revenue on an aircraft that is designed to provide feed into hubs is shared between both of the legs on that itinerary, it is even harder to make revenue and costs meet on 100 seat aircraft. While many major routes such as DFW-LGA or LAX can be 30-40% local traffic (not shared with any other segment), many RJ routes have 10-15% local passengers and revenue.
.
If there is a carrier that should be able to make a 100 seat aircraft work, it should be B6 with its CASM which is about the lowest of any large jet operator. If they can't make a 100 seater work on a network which is far more point to point than any of the network carriers, it is doubtful that the plane really isn't gone to be viable for anyone unless you pay bottom of the barrel wages.
I don't think there are many network airline employees who are willing to take a cut in pay in order to make a plane work in their employer's network.
The RJ era has been a huge hit to mainline employee wages... the sooner it comes to an end - and its expansion limited - the better it will be for employee wages.

 

[BoeingBoy]

With regard to the "88" seat discussion/E-190,

The truth is that money can be made with the 190. The art comes in picking the right sized plane for the market - neither turning away potential customers nor flying too many empty seats regularly. And at the same time having enough frequency to appeal to the business passenger but not so much frequency that it reduces load factor. But part of that profit depends on costs being proportional to the number of seats that there are to sell, and that's true no matter what airplane you're talking about. Reducing the number of seats to 88 means that a higher percentage need to be sold. Just look at the 737/A320 trans-Atlantic flights - the number of seats is cut roughly in half to get the range, but they don't have coach seats, only business class, and there are only a couple of markets that support that service. Or look at UA's PS service - approximately 110 seats on a 757 with no regular coach section (only E+, business, and FC), but a very limited market for that service.

B6 is happy with the 190. They're getting more, despite what some say, but like with the A320's are slowing down capacity growth to "only" 7% or so.

Jim

 

[WorldTraveler]

Since UA is discontinuing PS service, that would probably NOT be a good example of how a below average configuration is supposed to work.
Since UA which has an abundance of domestic widebody aircraft is shifting those aircraft to TATL routes and moving PMCO's 757s to domestic and Hawaii service, it argues against smaller aircraft even on int'l flights. DL has very few 757s operating TATL flights outside of the peak summer season.
BA's 318 from London City is one of the very few major airline small narrowbody flights and that is driven by runway and airport size at LCY which is a very unique airport.
Several PrivatAir flights are being pulled down by its Euro network carriers - fuel prices undoubtedly being the reason.
.
No current network carrier except for US has managed to incorporate 100 seat aircraft and keep them in their mainline fleet. Given that US employees are some of the lowest paid yet US' CASM is only mid-tier among network carriers, then there is a pretty strong case to show that 100 seat aircraft at mainline carrier salaries don't work at mainline carriers. If they did, I can assure you that other carriers would have ordered them. CO, DL, UA all get sales calls from Embraer on a pretty regular basis.
In fact, CO, DL, UA, and WN have all INCREASED the average size of their domestic mainline aircraft over the past few years.
.
Let's also note that US' network is much smaller with weaker hubs than its competitors... it is smaller aircraft that give US any chance of competing w/ larger network carriers.
.
The only way AA could make an 88 seater work at mainline is to pay their crew far below what other crews at AA make or to place it with a regional carrier. Neither solution is going to win the favor of labor.
Given that AA already has an enormously uphill battle to turn the airline around, you truly have to wonder what benefit is gained by pushing to a new level of outsourcing in order to gain *** 12**** seats per aircraft over the 76 seaters which ARE currently accepted by mainline labor unions, even if reluctantly so.
.
As with every issue that is discussed, let's just watch how it all plays out.
.
Even if AA decides to place an 88 seat E jet at AA mainline, the odds that it will work are slim. If the economics don't kill it, employee backlash will.
There is a reason why the airlines that had the best profitability in the industry have not tried to venture into a 100 seat aircraft - and fuel prices make it less and less likely they will do so.

 

[BoeingBoy]

Given that US employees are some of the lowest paid yet US' CASM is only mid-tier among network carriers, then there is a pretty strong case to show that 100 seat aircraft at mainline carrier salaries don't work at mainline carriers.

Oh yeah - all US' problems are the fault of the E190's....is that the Whole Truth?

As with every issue that is discussed, let's just watch how it all plays out.

Yet you love to tell everyone how it will all play out...

Jim

 

[700UW]

US' majority of the fleet is 120-193 seats, not 100.

All A319/320/321s are the majority of the fleet. Which total 228

There are only 15 E190s flying.

Thats right out there for you, you didnt see it?

 

[WorldTraveler]

except I didn't say that the 190s are US' problem...
The issue is that US has the smallest average aircraft size in the US industry on N. America flights flown by mainline aircraft - that is based on schedule data. When you factor in regional carrier aircraft, US' average aircraft size comes in average for the industry meaning that US has a disproportionately larger number of large regional aircraft than other carriers yet no regional aircraft has a CASM as low as their major carrier's mainline CASM.

Of course you don't want to hear it but DL has the largest average aircraft size among all US carriers for both mainline and combined mainline/regional aircraft.
.
If you include mainline and regional worldwide for all US carriers, AA ends up with the largest aircraft size because it has so many flights to Latin America with mainline aircraft.
.
Not surprisingly, DL is the carrier that is most aggressive in expanding in the domestic marketplace and has the lowest CASM among US network carriers while AA's Latin America system is one of the most consistently profitable regions for any US carrier.
.
It also helps DL's ability to operate large aircraft because its three largest hubs (ATL, DTW, MSP) are fortress hubs (70% share or more) which are all well suited to carrying connecting traffic. Using larger aircraft helps reduce the CASM which is esp. important for connecting traffic.
.
Larger aircraft size DOES matter when it comes to profitability among network carriers.

 

[700UW]

Funny you still cant admit your wrong, you said the majority of US' fleet is 100 seats, I proved you wrong, but blatantly wrong and you just spew DL information.

Simply unreal.

 

[BoeingBoy]

except I didn't say that the 190s are US' problem...

You did say that the 190 at mainline wages doesn't work for network carriers and cited US as "a pretty strong case" for that. So we'll put you down as favoring 100 seat planes at express type opertions, despite what it might do to mainline employment.

yet no regional aircraft has a CASM as low as their major carrier's mainline CASM.

Now you're claiming something without supplying any evidence. How do you personally know that no regional aircraft has a CASM as low as their carrier's mainline CASM. Mesa generally reports CASM as mainline competitive and their average fleet size is about 70 seats.

Larger aircraft size DOES matter when it comes to profitability among network carriers.

Why isn't DL, the do everything right airline, flying only 747's, or better yet have a few hundred A380's on order then...

Jim

 

[700UW]

Give em hell Jim!

 

[tom barry]

because domestic FC is almost entirely upgrades... network airlines provide domestic FC because it is provides value to their frequent flyer program. There are routes where people pay for premium classes but on the majority of the domestic system, FC exists as a marketing tool.
.
and do you really want to put a clause in a labor agreement that is specific to one aircraft type? Even if AA succeeds in getting Embraer to take back scores of ERJs, they will just be locking themselves into another aircraft which may or may not be the right solution long term - and they are still starting the process long after other carriers.
.
You still may see DL and UA decide that they really do not need 20 RJ flights a day to a city like DSM or LIT and instead they are back to a half dozen - which worked just fine for the industry long before RJs came along.
.
Part of the problem w/ RJs relative to larger mainline aircraft is that you can't get ALL of the costs proportionately sized to the aircraft... station costs are still about the same for a larger aircraft and unless you give that aircraft to a regional carrier, you still have mainline costs.
And even with crew, you either get into a knock down dragout w/ labor in order to get crew costs down or you end up with costs disproportionately high. Remember that even if hourly rates for crew members are even 2/3 of what a crew member is paid on a 320 or 738, benefits costs are almost identical for all employees ... ie you don't have lesser health care benefits just because crews fly smaller planes.
And then you have to consider that revenue on an aircraft that is designed to provide feed into hubs is shared between both of the legs on that itinerary, it is even harder to make revenue and costs meet on 100 seat aircraft. While many major routes such as DFW-LGA or LAX can be 30-40% local traffic (not shared with any other segment), many RJ routes have 10-15% local passengers and revenue.
.
If there is a carrier that should be able to make a 100 seat aircraft work, it should be B6 with its CASM which is about the lowest of any large jet operator. If they can't make a 100 seater work on a network which is far more point to point than any of the network carriers, it is doubtful that the plane really isn't gone to be viable for anyone unless you pay bottom of the barrel wages.
I don't think there are many network airline employees who are willing to take a cut in pay in order to make a plane work in their employer's network.
The RJ era has been a huge hit to mainline employee wages... the sooner it comes to an end - and its expansion limited - the better it will be for employee wages.

I'm surprised I need to remind YOU, WT..of the following.

One of three things ARE gonna happen.

ALL work groups WILL accept WHATEVER P O S.....TA.....AA puts on the table BEFORE they face the judge.
OR,
AA impose's the same P O S With the BK judges help
OR,
The APFA SHUT's er' DOWN !!!!!! (The other two Unions DONT have the BALLS to do it)

So in the first two scenario's, AA WILL fly the 190 via A/E crew rates ($$$)

Unless of course you think that the TWU will get more NO votes than YES. I mean we're talking surviving FSC's and AMT's in "DFW and TUL" ! Those "good ol' boys" NEVER got to the chapter that talks about "Falling on your sword" for justice.


As for the APA,...................Sure, they're madder then wet hens especially over the defined benefit pensions, but for the first time EVER, they are up against a far superior Foe called B K. AND THEY KNOW IT !!!!!!!!!!!!!!

Believe me, a TON of TWU/APA spouses WILL be dictating how those ballots are filled out if it means thier Ol' Man stays working !!!

The reason we're not hearing a lot about the current A/E, is because HDQ's (at this point in time) isn't sure if there will be two company's (AA + A/E) or a segment of AA that is identical to A/E within the same contract.

This is Not rocket sceince this BK re-organization stuff. Unlike other Airlines, AA will get it all correct on this one and only go-around in BK.

 

[will fix for food]

1.

I'm surprised I need to remind YOU, WT..of the following.

One of three things ARE gonna happen.

ALL work groups WILL accept WHATEVER P O S.....TA.....AA puts on the table BEFORE they face the judge.
OR,
AA impose's the same P O S With the BK judges help
OR,
The APFA SHUT's er' DOWN !!!!!! (The other two Unions DONT have the BALLS to do it)

So in the first two scenario's, AA WILL fly the 190 via A/E crew rates ($$$)

Unless of course you think that the TWU will get more NO votes than YES. I mean we're talking surviving FSC's and AMT's in "DFW and TUL" ! Those "good ol' boys" NEVER got to the chapter that talks about "Falling on your sword" for justice.


As for the APA,...................Sure, they're madder then wet hens especially over the defined benefit pensions, but for the first time EVER, they are up against a far superior Foe called B K. AND THEY KNOW IT !!!!!!!!!!!!!!

Believe me, a TON of TWU/APA spouses WILL be dictating how those ballots are filled out if it means thier Ol' Man stays working !!!

The reason we're not hearing a lot about the current A/E, is because HDQ's (at this point in time) isn't sure if there will be two company's (AA + A/E) or a segment of AA that is identical to A/E within the same contract.

This is Not rocket sceince this BK re-organization stuff. Unlike other Airlines, AA will get it all correct on this one and only go-around in BK.

A couple of things to consider:

1. Your 88 seat 190 would fall within the proposed SCOPE and could be flown by Eagle or another regional affiliate.

2. The term sheets presented to the A/A unions still provide for better pay and benefits than Eagle employees currently enjoy.

Given this I don't see what benefit it would be to the company to fly the 190's at A/A using American employees. If I was a creditor and was presented with that plan I wouldn't be very happy.

 

[WorldTraveler]

Tom,
I have not forgotten that an 88 seater could be placed at a regional carrier by AA.... but as you note the choice is for AA's labor groups to accept whatever the BK judge throws at them (there is no way they will accept it w/o a BK imposed contract) or shut the place down - and as we all know, there are more and more AA people who wonder if it is worth allowing AA to continue the process of lowering airline employee pay and job security.... but that is their decision.
.
What I have argued for is that 100 seat aircraft (even in an 88 seat configuration w/ FC) don't work at mainline carriers UNLESS you dramatically cut the pay to pay AND benefit levels as low as regional carriers.
150 seat aircraft are the basis on which costs for domestic operations are based - some carriers like WN have built their cost base with fewer seats on a 737-300/700 and gained efficiencies to offset the higher CASM of the 73G relative to the 738... but again note that WN is moving UP to the 738 - which for them will have a number of seats comparable with the 321 used by network carriers.
.
The fact that DL's average seat size and pilot pay are BOTH above average for the network carrier segment while CASM is below average shows that there are efficiencies that are gained from even a few more seats... and remember that DL is the world's largest 757 operator and is buying only new 739ERs, an aircraft that already has a low CASM and will INCREASE the average size of DL's domestic fleet.
.
But it isn't just DL... UA is also putting CO's lower CASM 757s back on its domestic system while moving UA 763s and 777As to their international system where their large size provides greater revenue generating ability while removing higher CASM 762s completely.
.
If larger and larger aircraft could be filled on the domestic system, then UA wouldn't be moving its 757s, 763s, and 77As around while dumping the 762s. DL and UA's decision to move widebodies to int'l operations provides them w/ greater opportunities to force sell up on domestic fares w/o having to fill dozens of seats on big widebodies during off-peak periods.
.
Jim, US and DL know that the 333 is the lowest CASM large widebody, not the 744. But the 333 is obviously way too much aircraft for the domestic system.

 

[BoeingBoy]

Jim, US and DL know that the 333 is the lowest CASM large widebody, not the 744. But the 333 is obviously way too much aircraft for the domestic system.

Hey, you're they one that put the simpleton statement out there that "larger aircraft size does matter when it comes to profitability among network carriers." Now you want to tap dance your way out of it by adding qualifiers. What happened to the Whole Truth?

BTW, AA has proposed a mainline pay rate for aircraft like the E190 so presumably management feels that they can afford that rate in conjunction with the other changes proposed. In fact, none of AA proposed pay rates are at the bottom of the network carriers - they're basically in the industry standard range.

BTW2, I know you'd have been delighted to see WN not get any airplanes during the period that only the 727 Classics were available (what's a 73G?) or even earlier when only the 737-200's were available, but really, what did you expect WN to do for that 20 years - not fly. Even DL the wonderful operated 737-200's instead of waiting for Boeing to produce the 737NG's and now they're getting NG's instead of waiting for the MAX's. Is that a mistake like WN's 737 Classics? Or did DL do the right thing just because it's DL and everyone else is screwing up?

BBW3, there is no single "lowest CASM" widebody because of all the variables, so another simpleton statement. On an appropriate mission basis with all else being equal (and all else is never equal), there are "lowest CASM" planes but that is not what you said. Even Boeing and Airbus disagree with you, both claiming to have the "lowest CASM" plane although in different segments - Boeing the 787 and Airbus the A380. Then you have the other side of the coin - the "lowest CASM" plane may not be suitable for a particular mission so may have higher segment costs because of that. And that's the Whole Truth...

Jim