The current crisis has opened up a new opportunity for American Airlines. After inheriting a complex fleet with a merger with US Airways, but balancing a need for connections across the country and abroad, fleet simplification has been on American’s mind. Still, the process has been relatively slow and steady. Now, however, the airline is accelerating those plans with a significantly trimmed flight schedule.
American has accelerated its fleet simplification
After operating eight distinct families of aircraft, American Airlines is now down to four:
- Airbus A320ceo and neo family
- Boeing 737 Next Generation and MAX
- Boeing 777
- Boeing 787
American retired the following families thus far:
But that is not all. American Airlines has also pursued a significant harmonization strategy to reduce the airline’s subfleets. Robert Isom, President of American Airlines, stated the following in the third-quarter earnings call:
“Just from a revenue perspective, the really nice thing about retirements is that we’ve really accelerated where we wanted to be down the road. And so, I think one of the things that we had said before is that we’re looking for efficiency, just because of the different number of aircraft type seating configurations. And also, when you take into account our regional partners, the number of operators as well. So over the course of the last five years, we’ve gone from really over 50 different subfleet types down to now about, I think, 23 or so.”
Understanding efficiency
Southwest Airlines is one of the most efficient airlines in the world. Operating an all-Boeing 737 fleet, the airline can standardize pilot operations, better handle aircraft swaps, and reduce maintenance inefficiencies. While this does come with some drawbacks, look no further than the 737 MAX global grounding, the airline still, generally and in the long-run, comes out as one of the most efficient airlines not just in the United States, but the world.
American Airlines will not be able to get down to only one fleet type, given the fact that it requires both widebodies to conduct long-haul missions and flies narrowbodies across the United States. Instead, the airline is seeking to minimize those inefficiencies as much as possible.
The harmonization of the Airbus A321 and Boeing 737 Next Generation fleet is one way American is doing so. These planes are undergoing cabin densification projects. While the Boeing 737-800s will maintain the same interior configuration as the 737 MAX 8s, the A321neos will have just a few more seats than the retrofitted A321s.
Some inefficiencies will remain. American Airlines has a subfleet of Airbus A321Ts that fly transcontinental routes with a very premium configuration. Other than that, once retrofits are complete, no other fleet will have more than one configuration onboard the aircraft. Some planes also have different seats onboard. Newer 787-8s have a better business class cabin than the old ones.
American can also then reduce the number of pilot pools it needs. That means fewer complexities when it comes to pilot training and crew scheduling.
The best part of this is that these efficiencies are permanent. Not only do they reduce costs for the carrier now, but it will also keep costs low in the future once the airline is back on a strong growth trajectory.
Maintaining a young and robust fleet
Another goal for American Airlines to maintain a young fleet. The 757s and 767s, in particular, were some of the oldest planes in American’s fleet entering 2020, and waving goodbye to those planes means money saved on maintenance and fuel. American does still have some older planes, especially some older Airbus A320s and A319s, Boeing 737s, and 777s.
The ungrounding of the MAX and new deliveries of the type will enable American to retire some older 737s and perhaps some A320s. Meanwhile, the delivery of new Boeing 787s will replace some of the A330, and 767 capacity lost and enable some older 777 retirements.
A young fleet comes with plenty of advantages. Airlines have to spend less on fuel, the planes offer a competitive advantage since they are newer, and some passengers may appreciate the additional comforts new technology offers. It means fewer maintenance-related issues that could arise as newer jets typically have better operational reliability.
Modernizing the airline’s fleet was one reason the airline ordered billions of dollars worth of new planes. The airline previously had plans to retire its 757s, 767s, and others, but the crisis has accelerated those retirements.
In addition, 51 aircraft have lease expirations through 2022, which means American has flexibility. The airline could choose to retire those aircraft outright or else seek options to hang onto those planes at, perhaps, a cheaper rate. It is too early to speculate what American will do for some of the later expirations, but it will likely go for a mix of retirements and extensions.
With over 200 jets on order, comprising Boeing 737 MAXs, 787s, and A321neos (including the highly-anticipated A321XLRs), American’s future fleet plans also promote efficiency. The A321XLRs are long-range versions of the Airbus A321neos, and this will be the only new fleet American will be adding, though it will not be too different from the A321neo. American will not need to completely retrain (or hire) a new set of pilots.
The A321XLRs will take over most routes where American previously flew the Boeing 757. This also includes new routes. For example, the A321XLR would be perfect on a Philadelphia to Casablanca route once the airline gets its first of the jets on order in 2023.
Again, the upcoming 787s will help replace some 777s and replace capacity from the Airbus A330 and 767 retirements. If American needs more widebodies in the future, the airline will likely stick with the 787. A wild card option would be the Boeing 777X, though that plane might be a little too big for American.
Do you think American’s fleet simplification strategy will pay off? Why or why not? Let us know in the comments!