AMR continues to negotiate with lenders for 216 ERJs

[FWAAA]

AMR and the secured lenders agreed on 2/13/12 to extend the time for AA to decide under section 1110 for 216 ERJs (that's every 50 seater or smaller, flown by Eagle):

http://www.amrcaseinfo.com/pdflib/1123_15463.pdf

Boyd predicted right after the filing that Eagle would shed up to 100 small RJs quickly:

http://www.aviationplanning.com/Images/AMR%20Bankruptcy%20-%20Time%20For%20Reality.pdf

I agree with Boyd but it looks like a bunch of them might be hanging around for a short time to give Eagle some capacity until AA can acquire more 70 seaters.

 

[WorldTraveler]

The "AE problem" is one of the biggest challenges in AA's restructuring. They obviously don't want the 50 and less seaters for more than a couple years but lenders have little incentive to allow them to cut rates to nothing and then allow them to return on a moment's notice... removing the small RJs and replacing them w/ larger RJs - even when they are available - will require significant changes to AA's schedule... some markets simply cannot accept an increase on a one to one flight basis from 50 to 70 seats and some markets are too competitive to drop frequencies down by 25%.
This part of the process will perhaps be the most interesting part of AA's transformation.

 

[damajagua]

The "AE problem" is one of the biggest challenges in AA's restructuring. They obviously don't want the 50 and less seaters for more than a couple years but lenders have little incentive to allow them to cut rates to nothing and then allow them to return on a moment's notice... removing the small RJs and replacing them w/ larger RJs - even when they are available - will require significant changes to AA's schedule... some markets simply cannot accept an increase on a one to one flight basis from 50 to 70 seats and some markets are too competitive to drop frequencies down by 25%.
This part of the process will perhaps be the most interesting part of AA's transformation.

Don't worry AA is paying Bain & Co. millions to figure this out.