MIAMI – First of all, American Airlines will not be adding many Available Seat Miles (ASM) to the network.
On top of that, any ASM growth they do attain will not be from an increase in fleet size but as a result of larger aircraft or cabin reconfigurations.
Another of their overreaching goals is to bring the number of sub fleets down from fifty to thirty.
From this, American Airline’s President, Robert Isom, went on to elucidate upon their narrowbody strategy.
The Boeing 737 MAX Strategy
The Boeing 737 MAX 8 (the first of which was delivered during the media event) will be the template from which the current fleet of Boeing 737-823s shall be reconfigured.
American’s goal is to use them interchangeably. Having the same cabin reduces sub fleets, which lowers costs, and also makes scheduling and irregular operations recovery more efficient.
They also reaffirmed that there were no plans to send these aircraft on missions beyond the scope of their current Boeing 737 fleet.
When questioned by several analysts as to whether this would put them at a disadvantage relative to Ultra Low Cost Carriers like Norwegian across the Atlantic, AA’s reply was that their market segmentation is so vastly different it did not make sense to experiment in such a way.
In terms of network airlines exploring 737MAX operations over the Atlantic, so far only Air Canada has. AA, however, was unwavering in the fact that the MAX fleet would remain purely domestic.
Transforming the A321 operation
It was also revealed that every non three-class A321 would be standardized around a newer, higher-density configuration. This configuration will also carry over onto the NEO.
Much like the 737MAX, the A321NEO will not be spreading its wings across any ocean save, perhaps, the Pacific.
Isom explained that the A321NEO may allow American to use the A321 on routes as “far east” as Phoenix to the Hawaiian islands.
From an industry perspective, all of this is in line with what they have previously said.
The only new information garnered with respect to their domestic narrowbody operation is that they plan to accelerate the installation of satellite wifi.
The fact they continued to re-affirm a lack of interest in the 100-seat market for the next five to ten years is, again, in line with what they have already said.
Widebody, Long-Haul Outlook
There were two major take-aways from Isom’s discussion of American’s widebody fleet.
They are “working with Airbus” to decide what to do with the A350. That does not bode well for those who want to see the A350 in American’s fleet.
It has long been suspected by the industry that after a series of deferrals and luke-warm comments about the type that the fleet planners had no place for the aircraft.
Instead, now there are questions over what AA will do with the deposits. The suspicion is that the money will either go towards the A330-800NEO or more A321NEO.
Airbus has two reasons for AA to take the A330NEO should they really abandon the, legacy US A350 order.
First off, it bolsters the A330-800NEO. The weaker selling of the duo of new-engine A330s. It also seamlessly flows into the current legacy U.S. A330 fleet while at the same time being lighter than a 787-8 on American’s numerous trans-Atlantic missions.
From a strategic perspective, Airbus would prefer the A330-800NEO because it heads off a potential launch order for Boeing’s NMA. This theory was postulated by Scott Hamilton of Leeham News.
His assessment carries a lot of weight and there is evidence in American’s fleet strategy to back it up.
Phoenix and the 767-300(ER)
In Isom’s presentation, he said that American finally had the technology to allow the 767 to be deployed from their strategic asset of Philadelphia; where it will allow them to open new markets.
The 767s are not getting any younger and on top of that one of the goals of the consolidation of the 767 fleet to Philadelphia and, interestingly, Miami is to concentrate the maintenance of the types to better improve operational reliability.
At the moment, the only aircraft that comes close to replacing a 767-300 without adding AA’s feared ASM into the system is the A330-800.
Boeing knows this. If Boeing is launching the NMA (or 797), they would definitely be discussing preliminary designs with large customers such as American.
The NMA is widely suspected to be an aircraft that tops out at roughly the size of a 767-300. An aircraft that fits AA’s strategy of lower unit cost, no increase in capacity, improved passenger experience, and seems to be almost exactly what AA said they’d like to do in their presentation would be a rather large signal to the market and analysts that they like what Boeing is telling them under NDA.
Moreover; the NMA would allow American to maintain their goal of a consistent fleet size.
Isom does not want any meaningful fleet growth beyond the 945 mainline aircraft they already have. Should American take either A330-800NEO or the new Boeing NMA – they could retire the 767 and legacy U.S. A330s on a one to one basis.
Demonstrating no ASM growth except by slight increase in aircraft size it’s an aggressively disciplined fleet strategy – where the A350-900’s potential 300 seats would no longer fit in.
A350 chances are narrow
Cancellation of the A350 would not be any meaningful blow to the A350 program.
Were it to happen, one would suspect Airbus would allow American to roll the deposit into more A321NEOs – an aircraft they seem to love without having even taken delivery.
With respect to fleet numbers, AA is happy with what they have. Older aircraft will be replaced with newer, more comfortable and efficient models.
Their capacity discipline is so strong that AA will only be taking 26 new aircraft in 2018.
Once again, like its peers in the American legacy market – AA has not displayed anything in their fleet strategy that analysts have not recommended or envisioned.