N830MH

Actually, I think AA will planned for MIA-JNB-MIA-NRT on operate 3 77W aircraft. I think it will have better aircraft utilizations for each directions.

Thanks for heads-up, JY1024. Appreciated it for your efforts.

Right. AA will continuations to ordered more 77W aircraft to come online. Does anyone know about entire 77W will delivery in end of 2012 & 2013. Isn't supposed AA will announced it for MIA-JNB-MIA-NRT-MIA? AA will take the advantage of next new routes announced from MIA hub.

PresRDC

That's not how the industry works. Other than for spare engines (assuming AA actually owns its spares), AA makes no deposits for engines. It doesn't actually purchase them from RR directly. RR sells them to Boeing who then rolls-up the engine purchase price into the total cost for the airframe and invoices AA directly. In order to win this campaign, RR would have commited millions of dollars in incentives on the nose of each aircraft that is paid to AA directly upon purchase of the aircraft (or, at AA's option, paid directly to Boeing to offset the purchase price of the airplane - this helps them to secure financing). For a 777, at the time that RR won this campaign, the payments RR agreed to make likely total somewhere between 73% to 78% of the price of each engine (a shipset of 777 engines is roughly $40m); additionally, RR likely provided additional financial support for tooling, initial spare parts provisioning, training and other incentives (AA and RR have an engine overhaul JV). The percentage that an engine manufacturer is willing to pay to win a campaign is based, in part, on the size of the deal and the forecasted revenue stream (spare parts & repairs, mostly) that would be earned from the airline. As such, engine OEMs get very protective of exisiting orders and will be contractually entitled to significant compensation from the airline if defers or cancels orders. Further, AA and RR likely have a Total Care agreement in place, which provides power-by-the-hour pricing for off-wing engine maintenance. The power-by-the-hour rate that AA pays is partly a function of AA's RR-powered 777 fleet size (other factors include average stage length, environmental severity, average derate on takeoff and average cruise altitude) and these contracts typically allow for rate adjustments based on fleet size.

I am not privy to the specific details of any RR and AA discussions, but having been involved in many such issues, I am fairly confident that RR would not let AA out without some form of compensation.

PresRDC

As noted above, extremely unlikely. Airlines would love this type of provision, but they don't get it. Airlines are like vultures with their suppliers; they pick and pick until nothing is left, but once a deal is reached, the service provider has the leverage.

You can structure a package for an airline that minimizes the cost of having multiple engine types in a fleet. Engine commonality concerns are greatly overstated on FT and airliners.net.

PresRDC

Indeed. Even BA ordered 77Ws.

hillrider

Yep.

One thing that came out quite clearly from the official reports of the QF A380 incident is that QF practically "rents" the engines by the hour, and all of the maintenance, spare parts, etc. for those engines are all taken care by the engine manufacturer.

IflyonAA

The official presentation from AA can be found here: LINK

FWAAA

Don't know. My WAG is that they will be converted to 77Ws.

The truly surprising thing for me is that this strategy represents a reversal of the Crandall-era philosophy that smaller planes generally make more sense than the largest planes. 777-300s are essentially a two-engined 747 (capacity-wise), and I didn't think AA would ever fly anything that large again.

As to additional 77W orders: Except for the 747SPs acquired to permit AA to fly DFW-NRT while it waited for the MD-11s, AA has never flown a fleet of just two or three airplanes. That's why I'm certain the three orders will be joined by more in the coming months.

Then again, I might be completely wrong. A while back (after last summer's 738 orders) I predicted that AA would order several dozen additional 738s and so far, that hasn't happened. With jet fuel prices well north of $3/gal today, each MD-80 represents an additional $2.4 million of fuel burned per year on average compared to a new 738 (AA's numbers). At today's prices, AA's present fleet of MD-80s will burn an extra half billion dollars of fuel this year over an equivalent fleet of 738s. Years ago, when NW refurbished its fleet of DC-9s instead of replacing them, fuel cost about 20% of its price today. Old fuel guzzlers made economic sense when fuel was practically free but not when it's $3/gal.

Jacobin777

Excellent analysis and you very much might be correct.^ As I posted, it was one possible scenario.

-That being said, as you also mentioned, you don't know what the situation/contracts are between AA and RR-though they have a good relationship.

-As you know, options, purchase rights and actual orders have different contract structures, clauses, etc.

-We have seen many orders changed, canceled, ect. in the aviation industry so I don't see it as anything new or "ground breaking"...

-We have also seen many orders where there has been no engine contact for months/years.

-One thing I do know is that AA's contract with Boeing was for "any variant" of the Boeing 777 (after the first 12 being the B777-200 variant) so that obviously gave AA some flexibility as well.

There are just too many variables to be honest to know exactly what the situation between AA, Boeing and RR's order is.

Life_Platinum

I've followed this discussion on this thread for a number of months now, and when I called the EXP desk today about another matter I asked the DFW EXP agent why AA ordered just one 777-323ER. He said that it was part of the JAL bankruptcy and that another half dozen 777-300s and many more 777-200s from JAL were on their way to AA. Some had been taken out of service and were being painted (scraped??), and the interiors were being changed.
He said the questions were what airports AA would add with these planes, but suggested that most would be dispatched to Asia (where the $$$$ were). He also said that all FAs now were recalled, and that many 767 crews were being trained on the 777s.

Three days ago on my way home from SCL, I was told that the "schoolhouse" at DFW was packed with crews being retrained for the 777s and that something big was about to happen.

Could this be what many of us were hoping would soon happen or is still the old rumor we have heard over the past few months?

sdsearch

Yes, but who says it has to absolutely positively be daily?

Besdies the obvious (the route simply existing every other day period), consider the "metal neutrality" day-swapping that AA's starting on some of the TATL routes, where AA's flights (at some hours, anyway) don't go every day, but someone's (AAs or BAs or IBs) does. So a flight exists at that hour every day, but isn't flow by the same-ownership metal everyday.

Not that I'm sure whether these 777-300ERs will make sense to introduce on any such "metal neutrality" shared routes*, but I just want to throw out all the possibilities.

Too many people in this thread seem to be assuming one non-stop daily or nothing at all.

(And this is question that isn't answered by increased numbers of 777-300ER acquisitions. Any given new route still might or might not be exactly one daily, no?)

*While I realize the only "metal neutrality" shared routes so far may be TATL, isn't the possibility of them coming TPAC?

Microwave

I have a funny feeling your EXP agent isn't in on the top-level discussions, as some of this information is incorrect and other information seems highly improbable. First, JAL have no 77Ws parked anywhere; they are all currently operating. JAL's new 77Ws are supposed to be the cornerstone of their recently-shrunken fleet, as they need intercontinental capacity to fill the hole left by all of their 747s that are out of service. They've gone and purchased one of the most efficient large long-haul aircraft in the world, at no small cost, so it would make very little sense for them to acquire these aircraft only to turn them right around and give them to another airline that will be in a profit-sharing arrangement with them for TPAC traffic to operate. Indeed, when looking at the entire world market for secondhand airliners, there are no used 77Ws available anywhere--they're simply too new and too scarce. Furthermore, all FAs most definitely have not yet been recalled, as I can assure you APFA would be patting themselves on the back with a message to members if this were true. Instead the announcement APFA put out very recently about the agreement to hire 30 new Mandarin-speaking FAs specifically pointed out that there were still hundreds of FAs on the recall list and that APFA was still fighting to get them recalled despite the new hires. I think much if not all of what you were told was speculation, unfortunately.

kebosabi

Last I heard, JAL was parking their entire 744 fleet (I believe the last jumbo flight happened yesterday) to be replaced with more fuel efficient 777s, not scrap or give them away to another carrier.

Unless of course, AA is interested in those former JL jumbos. That'd be really cool to see though!

FWAAA

These employee rumours are completely nonsensical. The three 77Ws ordered by AA are shown by Boeing as new orders. AA has said they represent the exercise of options. AA's purchase agreements with Boeing (filed by AA with the SEC with very heavy redactions) were recently amended to include 777-300s. Even redacted, they are interesting reading.

JAL has no outstanding orders for 777s, so the AA deliveries don't look like JAL orders or old JAL planes. JAL operates only 11 772ERs and 13 773ERs. The remainder of its 772s and 773s are shorter-range domestic A-market models in which AA would have zero interest. If AA were to acquire a half-dozen JAL 777-300ERs and "many more" JAL 777-200ERs, JAL would have almost no long-range intercontinental aircraft left in its fleet. The EXP agent has not convinced me.

AFAIK, JAL has not removed any 777ERs from service.

Like you said, the rumour that refuses to die.

Life_Platinum

Microwave, Kebosabi, and FWAAA:
Thanks for your informed responses to the recurring rumor of AA increasing their 777 fleet by obtaining JAL 777s. I have been following the JAL fleet over the last two months, and you are correct according to the info I was able to find that JAL's 747 flleet has been taken out of service and now flies for other carriers, that JAL has a number of 777 subtypes in service, and has no incompleted orders from Boeing. I'm still puzzled why AA would order just one 777-332ER at this time, and why rumors continue to occur about AA expanding their 777 fleet with JAL equipment. Like many I can only speculate, but when the moon, sun, and stars align, these rumors appear reasonable. I was convinced that nothing would happen with AA's 777 fleet for a couple of years until I heard of the purchase of a single 777 (the moon is now aligned), then when pursers told me of what they heard was happening at the schoolhouse (the sun now is aligned), and my conversations with the agent today at the DFW desk about JAL planes (the stars were now aligned), I began to think that maybe we all were missing something. It will be interesting to see what new aircraft AA has in their fleet or will be getting in their fleet one year from now. I suspect you three are correct and this is just the same old rumor we have heard for the past couple of months.

Microwave

I think there are some celestial forces at work for sure, just not sure they involve JL's current fleet. I think it's more likely that they involve AA's outstanding 77E orders (at least they're on Boeing's order books as 77Es; it may very well be possible to convert these to 77W orders pending some possible wrangling with Rolls) and their existing orders for three 77Ws. I think some likely scenarios (and I admit I'm parroting here) are conversion of 77E orders to 77W, additional 77W orders on top of the existing 77E orders, or no news at all until AA have a few months to play with their new 77Ws and fall in love with them (and for the economy to improve hopefully), with more news later. In any case, I do think we'll be hearing more, and I agree with you that something is probably in the works.