Published in September 2015 issue

Will The Dreamliner Deliver an American Dream?

By Chris Sloan 

American Airlines (AA) lost its title as the world’s largest airline during a turbulent decade that began with the acquisition of TWA and the terrorist attacks of September 11, 2001, and ended with a Chapter 11 bankruptcy filing on November 29, 2011.

In a blisteringly rapid recovery that will be the subject of business history books for years to come, the legacy carrier not only regained its position as the world’s largest airline, but also as one of the most profitable. The resurgent carrier officially reacquired this position at the aviation summit on April 8, 2015, when AA and US Airways (US) formally began operating as one carrier.

As if to cap its resurgence, American introduced an aircraft that provides new opportunities to be a leader in long international flights: the Boeing 787 Dreamliner.

A MUCH NEEDED RENEWAL

The Fort Worth, Texas, based airline has been billing its startling renaissance under the rallying mantras ‘Going for Great’ and ‘The New American.’ One cornerstone is an unprecedented fleet renewal strategy, at a pace of two new aircraft deliveries per week. “We are taking significant steps to transform and enhance our fleet so that, in five years, we will have the US airline industry’s youngest and most fuel-efficient fleet,” said the airline.

Indeed, since 2008, when the multi-billion dollar re-fleeting program was initiated, AA had 628 new aircraft on order or delivered through May 2015. This mind-boggling total is more than half of the airline’s current mainline fleet—which, at 963 aircraft, is the world’s largest.

Henry Harteveldt, a noted industry analyst and founder of the Atmosphere Research Group, believes that American’s fleet renewal was a “a necessity, not a luxury.”

“Its commitment to new aircraft is fantastic,” he said. “American is now able to operate more reliable, efficient, and environmentally friendly aircraft, incorporating the amenities that passengers increasingly demand from airlines.”

Since 2013, three new fuel-efficient aircraft types have been ordered or introduced into the system, including 230 Airbus A320 family aircraft (of these, 130 are ‘ceo’ and 100 ‘neo’), and 20 Boeing 777-300ERs. A total of 200 Boeing 737 aircraft fill American’s bulging order book, along with 22 Airbus A350s, scheduled for delivery starting in 2017, and the A320neo and Boeing 737-8 MAX. The plan is to take delivery of more than 500 new aircraft in the coming years, including more than 100 in 2015.

ORDERING. AND CHANGING THE ORDER.

The most anticipated of the new aircraft was the Dreamliner, the delivery of which ended up involving a longer wait than anyone expected. American placed its order back in October 2008, becoming the third US airline—after United and Northwest—to purchase the aircraft. This landmark order buoyed Boeing, which, after an initial surge of orders prior to the July 2007 rollout and subsequent delays in putting the planes into service, was having difficulty getting new 787 customers. Boeing was also facing serious labor discord and battling the onset of the Great Recession.

Originally, AA had purchased 42 Boeing 787- 9 Dreamliners, with options for 58 more. The first frame was expected to enter the fleet four years later, in 2012. But 787 program delays, well documented in the aviation press, caused the delivery to be pushed back. Given AA’s precarious state at the time, that may not have been a bad thing.

Before receiving its first aircraft in 2015, AA altered the fleet mix. In a somewhat unexpected move, initial deliveries would be for the smaller 787-8, Harteveldt believes that this may have been a smart move by AA’s network planners, even though the 787-8 is increasingly being lapped in orders because of the lower costs per mile offered by its higher-capacity 787-9 stablemate.

“The advantage of the 787-8 is that it may be a more practical option for opening up long-thin routes, like from Dallas-Fort Worth to Beijing,” Harteveldt said. “The larger -9, conversely, may be better solution for higher demand routes.”

As of now, AA will receive 16 Boeing 787-8s and 26 787-9s. “This is all about matching supply to demand,” AA spokesman Matt Miller said in April. “Under the new revised agreement, we’ll reduce the number of aircraft delivered in 2016 by five aircraft. Four 787 aircraft that were scheduled for delivery in 2016 will now be delivered in 2017 and one aircraft will be deferred until 2018.”

The revision will reduce AA’s 2016 wide-body capacity by about 2.5% and its system capacity by 0.6%, according to American Airlines Group Chief Financial Officer Derek Kerr.

Scott Hamilton, publisher of Leeham News, said that the “deferral of five 787s” was due to weakerthan- anticipated traffic demand in Asia and Latin America, macro-economic factors, including the strength of the US dollar, and the decision to swap some 787-9s for the smaller 787-8s. According to Hamilton, the contract allowed this: “Boeing couldn’t accommodate production on the timetable AA wanted, hence the new schedule, according to our information. Plain and simple.”

Miller said that AA plans to take delivery of all the aircraft on order, “which means that older aircraft, including MD-80s, 757s and 767s, will be retired as the company takes delivery of new ones.”

Last year, AA phased out 767-200s and US 737- 400s (Airways, November 2014). In February 2015, it retired US 767-200s (Airways, June 2015). “We expect to retire seven 767-300s during 2015, but we haven’t provided 2016 fleet guidance at this point,” Miller said.

The 787, though designed for a specific new niche at AA, tends to be replacing the 767-300s— though these, too, are seeing their service lives extended with new cabins.

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A NEW EAGLE ARRIVES IN THE NEST

The first American 787 made its maiden appearance in full livery when it emerged from the Everett paint shop in the middle of one night in late October 2014. The first delivery was scheduled for a month later. However, as with all things in this saga, that timeframe quickly slipped.

With the launch of its 787s, American would have debuted an all-new Business Class seatproduced by French seat making conglomerate Zodiac Aerospace; however, several issues on Zodiac’s side, along with FAA certification of the new product, caused the first delivery to be pushed back to the first quarter of 2015. Thus, a few newly built American 787s were temporarily parked in Victorville, California, awaiting seats.

At last, on January 6, 2015, the first American 787 took to the grey Everett skies. In the following days, the plane went through several flight tests before being quietly delivered to American on January 23. The aircraft was then ferried to the airline’s maintenance base at Dallas-Fort Worth International Airport (DFW). American kept the delivery low-key as it put the plane into proving runs with its employees and the FAA, readying it for its world debut.

PROVING & TRAINING FLIGHTS BEGIN

American had begun training its pilots in simulators in London back in 2012. Things really ramped up once the first 787s arrived on property.

Over about four months, American conducted a grueling schedule of 2,000 hours of training flights and completed over 1,000 takeoffs and landings. Its 787 pilots flew the aircraft on training sorties to west Texas, St. Louis, Chicago, New York ( JFK), and across the oceans to London (LHR) and Tokyo (NRT). Local media in west Texas and in Oklahoma reported on the training runs because, with the exception of emergencies, large aircraft are a rare sight there. One small airport in Waco, Texas, witnessed nearly 50 touch-and-goes in a single morning.

Although these operations were primarily aimed at pilot training and staff familiarization, AA operated its Dreamliners to other cities around Texas—such as Houston—to help prepare staff in case the aircraft ever needed to divert. Captain Bill Elder, manager of 787 flight training, and Charlie Savage, lead 787 check airman, said that the crews really enjoyed being able to put the real aircraft through their paces, having finished with the simulators.

These training flights were crucial for American. It wanted to ensure that the aircraft would enter service without snafus. In the past, other airlines had had to delay or cancel flights due to problems with the 787. Twenty-nine airlines, including five in the Americas, had preceded AA in introducing the Dreamliner. American and Boeing took advantage of the experience of prior operators and of a more mature aircraft.

According to Miller, “approximately 100 pilots and 850 flight attendants are fully qualified to operate the Boeing 787 Dreamliner at American Airlines.” Bruce Starkey, manager of flight planning in operations engineering, said that the airline was well primed for the airliner. “Operations has been preparing to receive the Dreamliners for a long time,” he said. “We examined the payload, fuel burn and range characteristics of every aircraft the manufacturers have on the drawing board.”

Stacey Crawford, senior engineer at maintenance operations support, noted that “every aspect of the 787 is different and that the aircraft will require a fresh, innovative approach to maintain and fly it. The 787 requires an extensive amount of specialized tooling for its operation and maintenance.” She said that the initial budget for startup tooling exceeded $20 million.

At press time, American had six 787s at strength.


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THE PASSENGER EXPERIENCE (PAXEX)

About a week before the inaugural flight, AA held a small but lively launch event, inviting a handful of people from the media and employees out to one of its hangars at DFW to officially unveil its newest aircraft. The excited visitors opened the much-anticipated cabin for inspection.

There is no First Class. Instead, the new airliners have 28 Zodiacmanufactured seats in two Business Class cabins; the seats are laid out in a 1-2-1 configuration to allow all-aisle access. Each of the 28 seats transforms into a fully lie-flat 77- inch bed that provides customers with infinite adjustability, as well as what American describes as “a unique ‘z-shaped’ lounge position for increased comfort.”

These premium seats are arranged in a front- and aft-facing configuration— not unlike British Airways’ Club World cabin. Although it seemed to lack the showstopper appeal of AA’s new 777-200ER and 777-300ER cabins, the Business Class cabin received positive reactions from a number of those in attendance. Harteveldt felt that American could have done better. “It’s gray, and devoid of color. The Zodiac seats seem narrow and not as spacious as AA’s 777-300ER.”

Every Business Class seat boasts a 16-inch touchscreen monitor with up to 250 movies, more than 180 TV programs, and more than 350 audio selections. The in-flight entertainment system (IFE) is based on the Panasonic eX3 platform, which, according to noted aviation passenger experience journalist John Walton, “is about as good as you can get.” It’s an Android-based system, so the user interface is familiar, he said, and the storage options are extensive. Inflight connectivity is powered by Panasonic’s u-based system, which Walton called “the best option for the routes these airliners fly, and will feel a little like a slow office connection.” Every seat will also have dual universal power outlets and USB ports.

If passengers get hungry during the flight, there’s a walk-up bar that will be stocked with snacks and non-alcoholic beverages.

Moving down to Economy Class, 198 seats occupy the Main Cabin in a very tight 3-3-3 configuration with a 31” pitch. This has unfortunately become commonplace in many carriers’ Dreamliners. Seth Miller, who has flown on AA’s 787, puts it bluntly: “American’s Economy Class is an average nineabreast Boeing 787 Economy cabin. This is not a problem unique to AA, but there is no product between ultra-narrow Economy and a fully flat Business Class bed; like, say, a proper International Premium Economy recliner seat.”

Fifty-six of the seats in the two Economy cabins, branded as Main Cabin Extra, offer up to five more inches of legroom over the standard Economy seats. All main cabin seats are 17-18 inches in width. Each seat in the main cabin is equipped with a power outlet, USB port, and personal in-seat entertainment system that boasts up to 250 movies, more than 180 TV programs, and more than 350 audio selections.

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THE AMERICAN DREAM BECOMES A REVENUE REALITY

On May 7, 2015, nearly seven years after being ordered, American’s Dream was set to become reality. AA started with four daily rotations between hubs DFW and Chicago (ORD). On the first day of revenue operations, boarding started just before 07:00 local. Even in the pre-dawn, the excitement was palpable, the gate area filled with excited employees and customers gathered to send the 787 off on its maiden passenger voyage.

“We are excited to be the first airline to bring the 787 to DFW,” said Fern Fernandez, executive vice president of AA’s worldwide marketing. “Later today—from this exact gate, in fact—we will launch the first route for which this aircraft is optimized: Dallas-Beijing.”

The inaugural flight was nowhere near a normal one. Roughly 226 enthusiasts, including AA employees and some 78 Executive Platinum frequent fliers, were onboard. Despite the early hour, there was a grand party at 40,000 feet.

The significance of the moment was not lost on some industry stakeholders. American was finally operating a truly game-changing airliner that, according to Harteveldt, “will breathe new life into AA’s long-haul network. The combination of aircraft size, efficiency, and range make it more practical for AA to explore opportunities that it couldn’t exploit as well as in the past.”

Ultimately, the real upside is that American will be able to operate as a much more profitable company, even with the headwinds of escalating fuel prices that will surely return sooner rather than later—an environment the Dreamliner was designed for.

At 07:30, right on schedule, the Dreamliner lined up with runway 17 and began a whisperquiet, 40-second takeoff roll. The quiet was soon broken by cheers and applause as AA2320 soared into the sky. The flight took off with a weight of 356,000 pounds—including 46,000 pounds of fuel—reaching V1 at a quick 146 miles per hour.

The aircraft soon climbed to 39,000 feet, and the flight crew, comprising Captains Charlie Savage and Bill Elder, had their work cut out as they had to deviate around quite a bit of weather. The cabin crew, specially assembled for the flight, was miraculously able to pull off a full service with the aisles in virtual party gridlock. They shared in the convivial atmosphere and seemed to be having as good a time as the passengers.

At different times, Captains Savage and Elder, greeting the passengers, explained how ecstatic they were to be piloting the inaugural flight. They absolutely gushed over the 787’s performance and what it represented for their company. As a testament to their pride, they personally commissioned and paid for a special commemorative challenge coin for the passengers. American provided all passengers their own branded carry-on swag bags with headphones, USB chargers, and other goodies.

Once the aircraft had reached cruising altitude, we explored Business Class. My impression: the cabin projects a businesslike aesthetic with no particular visual design cues standing out. We started with one of the forward-facing seats. They have a unique threepoint seat belt, unlike the aft-facing seats. The ‘mini suite’ was nice and intimate, and the seat was very firm.

The dual USB and power outlets were ergonomically located right at shoulder level—helpfully, they didn’t require reaching around, as is the case in United’s 787 BusinessFirst seats. The seat controls were on a small display, much like an iPod, conveniently located at eye level. From the seat controls, a passenger can manipulate lighting and privacy indicators.

The standup bar wasn’t stocked for the short flight, but will surely be welcome on the long-haul voyages the 787 will fly. The mini-bar isn’t the dazzler that graces AA’s reconfigured 777 fleet, but is functional nevertheless.

The Main Cabin and Main Cabin Extra seats would be fine on a short flight; however, on a long trip, they wouldn’t be the most comfortable choice for a relatively large passenger. The IFE and power ports, as designed, provided a nice distraction from the tight seating.

On this inaugural flight, the only obvious glitch was the maddeningly slow WiFi. The T-Mobile KU satellite-based system made modem dial-up seem sprightly. Later, T-Mobile issued a refund to all the passengers who had paid for WiFi. But these were just minor issues on a very short flight designed precisely for working out the bugs. It was difficult to evaluate the airplane for its intended long-haul mission.

All too quickly, we began our descent into Chicago and, 25 minutes later, touched down at O’Hare. After landing, we undertook a ‘victory lap’ around the airport to let the media take a few photos of the aircraft before we stopped at the gate.

Following the initial familiarization flights between DFW and ORD, American began operating the flights that the 787 was meant for.

On June 2, American flew its first international 787 passenger flight, DFW to Beijing (PEK). Two days later, it started flying between DFW and Buenos Aires (EZE). In August, American was to start flying its 787 out of ORD to NRT, setting the stage for a possible 787 crew base at Chicago. Being a bit late to the global 787 party turned out to have at least one upside. Compared to the experience of earlier customers, dispatch reliability on the 787 fleet has gone pretty smoothly for American.

The airline has yet to disclose future routes, but Seth Miller suggests opportunities. “As American looks to expand into Asia and Europe, particularly from hubs in Dallas and Charlotte and even, possibly, Phoenix, the 787s offer much potential, given their improved performance and lower costs, compared to those of the 767s that they are replacing.”

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CLEAR AIR AHEAD?

American’s Dreamliner launch was an upbeat experience that stood out for the unbridled enthusiasm of the passengers and crew. American has achieved remarkable heights not thought possible just a few years ago—although the airline knows that significant challenges await, including a critical cutover to a single reservation system later this year.

It hasn’t been an easy journey, but the fulfillment of the 787 dream provides a great injection of efficiency, comfort, and energy into the rebirth of the iconic airline that proudly calls itself American.