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American Air to increase regional fleet


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#1
usa1

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American Air to increase regional fleet ...

http://www.reuters.c...E9CHFH520130117
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#2
WorldTraveler

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The chances are high that Bombardier and Embraer will get big chunks of AA's orderbook as well as just about any other manufacturer.

Add in that UA is in a position to increase their large RJ fleet, DL still has a few more large RJ orders they could place, and US has said they want to order more large RJs and the US industry alone is looking at a massive RJ refleeting initiative.
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#3
Bob Owens

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The chances are high that Bombardier and Embraer will get big chunks of AA's orderbook as well as just about any other manufacturer.

Add in that UA is in a position to increase their large RJ fleet, DL still has a few more large RJ orders they could place, and US has said they want to order more large RJs and the US industry alone is looking at a massive RJ refleeting initiative.


Sounds good but who is going to fly them or fix them?

The advantage of bigger planes is you can move more people with fewer workers, the supply of Pilots and mechanics is plummetting. RJs fed off the fact that there were a lot of people willing to work for the crap wages they offered as a means to get to the majors, well now most of the majors suck, so why would anyomne want to invest in a carreer and put in what amounts to internships at commuters?
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#4
TWU informer

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Sounds good but who is going to fly them or fix them?

The advantage of bigger planes is you can move more people with fewer workers, the supply of Pilots and mechanics is plummetting. RJs fed off the fact that there were a lot of people willing to work for the crap wages they offered as a means to get to the majors, well now most of the majors suck, so why would anyomne want to invest in a carreer and put in what amounts to internships at commuters?

Latest rumor I heard was Obama will give amnesty and free education to illegals in exchange for getting on tax roles. Look for hispanics, to get free government A&P training and manuals to have spanish option. The shortage you speak of will be short lived.
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#5
FWAAA

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Sounds good but who is going to fly them or fix them?

The advantage of bigger planes is you can move more people with fewer workers, the supply of Pilots and mechanics is plummetting. RJs fed off the fact that there were a lot of people willing to work for the crap wages they offered as a means to get to the majors, well now most of the majors suck, so why would anyomne want to invest in a carreer and put in what amounts to internships at commuters?


For the most part, these larger RJs are to replace the 37-50 seaters, not just at AA but at the other majors as well. Sure, bigger planes fly more people at lower per seat cost, but they generally have higher per-trip costs, so if you don't fill most of the seats of the bigger plane, it ends up being more expensive than the smaller, lighter plane.

AA wasn't chomping at the bit to get a pilot scope clause (and TWU scope clause) allowing 300 or so 76-seaters so that it could stop flying 737s; it went to war with the pilots and other employees so that it could replace a lot of the 37-50 seaters with 76-seaters. As you point out, larger planes can move people more efficiently, and 76 seaters are a lot larger than 37-44 seaters. The overall size of the AA regional fleet probably won't grow by much, but more of it will have 76 seats and the 37 and 44 seat planes will become beer cans. Even a bunch of the 50 seaters will be grounded.

Who will fly them and who will fix them? Cyborgs, of course.

When there aren't enough pilots and mechanics, then airlines will offer higher pay, which will eventually coerce young people to become pilots and mechanics.

Most of the legacy airlines had essentially a 10 year hiring freeze on new pilots and mechanics. Sure, there were a few exceptions, but with stagnant pay and no new jobs, it's no surprise that fewer kids became pilots mechanics over the past decade. Now that the glut of pilots and mechanics is disappearing, I expect that the companies that want to hire them will offer higher pay.

In the old days, nurses didn't make as much as they do now - and the high demand for nurses is well-known to most people who have been paying attention (including you). Eventually, airlines will offer high enough pay to attract new employees. That's the way the world works.
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#6
WorldTraveler

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true except that part of the increase in gauge that other carriers are able to do w/ their RJ fleet is driven by mergers which have created duplicate hubs serving the same region.
As duplicate hubs have been closed, it is possible to centralize RJ services at larger hubs on larger aircraft with an equal number or even fewer total seats than were offered before.
Frequency is still a major purchase driver for airline passengers but it isn't necessary to duplicate flows over multiple hubs at the same hour - and the growth of 50 seaters created that - at one time that duplication was between competing airlines but as those competing airlines have been swallowed up by other airlines, the duplication has been eliminated.

Part of the challenge AA faces is either to grow their existing network enough to fill the larger RJs while maintaining frequency or to merge as other carriers have done in order to reduce duplicate hubs.
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#7
FWAAA

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WT, you may be completely correct (I'm not smart enough to even follow most of the post), but here's a simple example: AA replaced a lot of 66-seat Super ATRs in Chicago many years ago with 37/44/50 seat RJs, and in many cases, did not increase frequencies (at the time, of course, ORD was capacity-limited and AA could not increase frequencies). In some of those markets, AA won't have much trouble filling most of a 76 seat RJ. In some 50-seat RJ markets from other hubs, AA may have increased frequencies beyond what business travelers demand - in other words, perhaps AA could reduce a couple of frequencies if it replaces the planes with 76 seat two-class RJs and not spill much of the business demand.

In any event, AA is not going to buy 300 or so large RJs to supplement the current 250+ small RJ fleet. Some AA employees mistakenly think that's what is happening. For the most part, these larger RJs will replace smaller RJs. Just like the new DL 76-seaters will permit DL to retire a bunch of 50-seaters. I don't know if the plan will work.
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#8
usa1

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http://www.bloomberg...agreements.html
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#9
eolesen

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Nah, I get what WT is saying, and he's right about the effects of frequency and dilution from competing hubs. We've done some work analyzing AF/KL and BA/IB's traffic and the effects of feeding AMS/CDG and LHR/MAD respectively. Having the smaller airplane helped push feed over the lesser performing hub.

When the regionals started going to RJ's, they didn't add a lot of pilots due to the switchover -- they were parking at least one prop for every RJ added, and some carriers actually went down in the number of aircraft because they were able to get more segments per day at the higher speeds.

This time around, it will be like when AA was parking the F10's and getting the 738's. They got a heavier, more versatile aircraft, but there was minimal crewing impact (one additional FA).

No idea about who the supplier would be. I personally like the Embraer, but there's an argument for sticking with the CRJ profile so there's the common rating (as well as common rotables) between the 50 and 76 seaters.

The other possibility is that AA won't care who the supplier is -- they'll just be bidding out the capacity, and the bidder owns the decision.
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#10
WorldTraveler

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FWA,
I think you are smart enough to understand the hub dynamics... you are correct that there will be replacement of smaller RJs. Embraer basically gave AA as much relieve on their existing fleet via the BK process, although Embraer could take back more older aircraft if AA orders new larger aircraft.

The Ejets have so much higher passenger appeal than the Canadair RJs - even the 900s - that it is doubtful that AA can build a large RJ fleet solely on Canadair models, even if they do have lower costs.

The large RJs are necessary to allow AA's hubs to compete against those of other airlines; AA's smaller domestic size than other competitors makes it necessary for AA to use large RJs to remain in some markets where other carriers are using mainline aircraft.
Based on UA's experience when they added 70 seaters, it is very possible that large RJs could lead to parking small mainline aircraft; AA's challenge is to redeploy mainline capacity elsewhere such as to Latin America where AA has a greater ability to add capacity so that AA mainline's overall size does not shrink.
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#11
NewHampshire Black Bears

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FWA,
I think you are smart enough to understand the hub dynamics... you are correct that there will be replacement of smaller RJs. Embraer basically gave AA as much relieve on their existing fleet via the BK process, although Embraer could take back more older aircraft if AA orders new larger aircraft.

The Ejets have so much higher passenger appeal than the Canadair RJs - even the 900s - that it is doubtful that AA can build a large RJ fleet solely on Canadair models, even if they do have lower costs.

The large RJs are necessary to allow AA's hubs to compete against those of other airlines; AA's smaller domestic size than other competitors makes it necessary for AA to use large RJs to remain in some markets where other carriers are using mainline aircraft.
Based on UA's experience when they added 70 seaters, it is very possible that large RJs could lead to parking small mainline aircraft; AA's challenge is to redeploy mainline capacity elsewhere such as to Latin America where AA has a greater ability to add capacity so that AA mainline's overall size does not shrink.


You 'Nailed-it'.. W T.. on your assessment of R J's, basing them in 'excess' hubs, and the Large 'likeability' factor of (especially) the E-jet.
We need look-no-further than DL and MSP ! Practically ALL those domestic westbound destinations from Minny ; FAR/MOT/BIS/RAP/BIL/HLN/GTF/FCA/BZN/MSO/BOI/GEG/ are being flown with the E-jet, as DL..DECIMATES the once Proud HUB of MSP !
(This sucks of course for non-rev's trying to get in and out of these places) !!
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#12
WorldTraveler

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oh, please,
DL is still the 2nd largest private employer in Minnesota behind Wal-Mart and has not cut capacity at MSP any more than it has been cut in the US as a whole.
In case you missed it, many of those cities were flown by DC9s or perhaps 319s from MSP but also are served from SLC. SLC and MSP are unique enough hubs that DL has not rationalized those two hubs based on different traffic flows from each.
Let's also not forget that NW ordered a whole bunch of large RJs including the Ejets and had a plan to dramatically cut DC9 flying before DL acquired them. DL, like NW, has kept the DC9 in service far longer than oriiginally planned which has allowed more mainline flying to continue until adequate mainline replacement aircraft are acquired.

Take a look at traffic statistics for the network carriers as of the end of the year. DL's capacity carried on regional jets is down over 5% for the year and 9% for December.
It is the regional carriers who are bearing the brunt of DL's capacity reductions, not DL mainline. It is precisely because DL has duplications in its network that it has been able to shift flying from regional carriers to mainline while also growing mainline in other places in the network....that is the type of internal growth and shfiting of resources that has to occur to avoid laying off large numbers of mainline employees - and is the challenge AA and US face if they choose to merge. AA faces it even if they don't merge by virtue of the need to grow the network from where mainline flying doesn't make sense to where it does - primarily Latin America for AA right now.

No other carrier is doing the same thing. It is possible that the mergers between UA-CO and AA-US - if it occurs could result in the same dynamic but so far those trends are not occurring.

There is a good chance a few years down the hub that MSP-mountain states flying will see the 717 but that is not the first target for them.

We now return to our previously scheduled programming about AA....
and you might want to share how much flying AA is doing in STL and SJC compared to what existed before the mergers at those hubs - not to speak of the headquarters jobs that previously existed in those cities.
Oh, and how many UA headquarters employees exist in Houston today?
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