American Tells Us More About Their Future (and Deferred) Plans for Planes
Joe Cortez April 10, 2018
American Airlines will not fly the Airbus A350 after all, opting to go with more Boeing 787 Dreamliner aircraft instead. In a publicly available podcast, the airline described their reasons for shifting orders, including deferring Boeing 737 MAX airframe delivery until 2022 at the latest.
American Airlines is moving forward with their widebody fleet replacement plans and deferring the delivery of 40 Boeing 737 MAX aircraft to between 2020 and 2022 in order to save on capital commitments. In a press release, the airline announced the addition of 47 new Boeing 787 Dreamliner aircraft, while canceling an order placed by US Airways for the competing Airbus A350.
In the statement, the airline notes the plan is to simplify their fleet and optimize performance. But on the American employee podcast “Tell Me Why,” available to the public on both iTunes and Soundcloud, executive vice president and chief financial officer Derek Kerr explains the plan will allow the Dallas-based carrier to replace their aging Boeing 767 fleet.
“We sat down and said: ‘what’s the optimal solution to this?’,” Kerr said. “On the 767 side, we either had to put $15 million into each of those aircraft and keep them around for six or seven years and then replace them, or replace them today. On the A350 side, they are replacement for those aircraft.
“We competed them off … we came to the conclusion that the right answer for us from a commonality standpoint and operation standpoint was to go with Boeing.”
Although the orders are new, it will not add any additional aircraft to the American fleet. American plans to take 22 787-8 aircraft starting in 2020 and 25 787-9 Dreamliners by 2023, all to replace 47 retiring aircraft. In the meantime, the airline will stretch out the life of currently flying Boeing 777-200 and Airbus A330 aircraft.
As part of the order, the airline also pushed out the delivery of 40 737 MAX airframes from Boeing. Instead of receiving them between 2020 and 2022, the airline will stretch those out to as far as 2026.
“We don’t need to have those aircraft coming at that point in time because we have some 737 classics that are out there that can fly for longer,” Kerr noted. “We will take those classics and put them through the Oasis program that we are doing with the rest of the classic aircraft and bring the MAX’s out a little bit later.”
The plan will allow American to defer capital responsibilities for the aircraft for another six years. While it may be a win for the airline, it may not be so good for flyers. An editorial published by Inc. Magazine notes the Oasis program will add more seats to the classic 737 airframes, reducing not only lavatory size but seat pitch as well.
“Ergo, more older planes – ones that would have been retired – will now be refurbished to have more seats stuffed in them,” Chris Matyszczyk writes for Inc. “And, yes, enjoy the same tiny bathrooms as in the MAX.
“For us to take 200 aircraft in the next two years versus pushing 40 of them off will be a really good solution for us,” Kerr said on the podcast. “But we have classics that can fly for longer, so let’s put the Oasis in them, put the new program in them, put some cost in them, but defer the capital out for a little longer.”
[Photo: Shutterstock]
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will they add wifi to the a330-300's then?
@KansasMike they might be losing out on that revenue, but what is the cost of that revenue? Given the extremely analytical nature of airline operations these days, one would think they would be chasing that $34B if they could make a return on it. Also, they probably do fly their airline... in 1st Class!
Just read an analysis that says the airlines are losing $34 billion a year in revenue due to the collapse of short distance flying since the year 2000. The article is here: https://www.linkedin.com/pulse/what-caused-short-haul-traffic-decline-us-34b-question-miller/ My wife and I just drove from ICT to SAT last week for a vacation -- something we would never have considered doing as recently as five years ago. Given the amount of traffic on I-35, it is now an eleven-hour drive. Yet, we would make the same decision again. Dial back to 1990 and I routinely flew from ICT to OMA, DSM, STL, DFW and DEN. Now, it is driving every time to those cities. I have very broad shoulders and I physically cannot stand up in AA's A321 restroom. So, with this latest announcement, it looks like even less flying is in our future. I often wonder if the executives of AA and the other carriers actually fly their airline?
Is the reduced seat pitch and tiny bathrooms part of the "Humanizing Air Travel" initiative they introduced the other day?
BOO!