Sunday, May 22, 2016

A Look Back at American’s Shifting Fleet As It Plans to Retire Two More Types

In an internal memo last week, American explained that it was going to retire two more fleets in the next couple of years with both the Embraer 190 and A330-300s hitting the road. Both these moves make sense in the context of the airline’s future plans, but it made me think about the evolution of American’s fleet through two mergers and plenty of crises. I went back to the year 2000 to illustrate just how much things have changed.

Here’s a chart showing the fleet mix at the end of each of the shown years. This is for mainline only and it includes TWA, America West, and US Airways in years where those were separate entities. (While most data was procured from financial reports, the TWA fleet in 2000 was estimated from data and may not be completely accurate.) 
Keep in mind that my seat count here is somewhat generalized. American has changed configurations and seat counts multiple times on these aircraft so it’s more about general aircraft size than it is about exact counts. Besides, it’s going to change again on the widebodies when premium economy arrives later this year.
American Airlines Fleet Mix
A quick scan of this shows two pretty large trends. One is at the bottom end, where aircraft with less than 120 seats have virtually disappeared from the fleet and the other at the top end where American has been deploying more airplanes with more seats.
Aircraft With Fewer Than 120 Seats
Let’s start at the bottom end.
American Fleet Mix Under 120 Seats
Back in 2000, the 717s (TWA), DC-9-30s (US Airways), 737-200s (America West and US Airways), and Fokker 100s (American and US Airways) were everywhere. By 2005, those were completely and totally gone from the fleet. After 9/11 airlines cut their fleets dramatically, and a rise in fuel prices meant those older and smaller airplanes became less economical. Beyond that, these airlines began contracting for larger regional jets. This all but killed this size fleet with mainline operations at the time.

It was only later when US Airways agreed to take 20 Embraer 190s to re-enter the space that had been virtually abandoned to the regionals. But now, with only 20 in the fleet and big maintenance work due in 2019, American had to make a decision. In this case, it made sense to just retire the fleet rather than grow it and invest in it. 
The Next Generation: American has nothing on order right now in this size, but that doesn’t mean it won’t. The C-Series and the new Embraer E2 aircraft will be good options here. I don’t expect we’ll see anything happen soon, however. I’ll bet American is holding that decision as a carrot to use during the next pilot negotiations.

Aircraft with 120 to 140 Seats
Moving up the chart, you can see the next size up has shrunk as well, but not nearly as much. That’s thanks only to a huge shift in the aircraft type being flown.
American Fleet Mix 120 to 140 Seats
This is a category which pre-merger American largely sat out for many years. (Sure there were some that fell into this category during the “More Room Throughout Coach” years, but that was a density issue.) It didn’t bring this size aircraft back again until it started taking A319s just a couple years ago. America West and US Airways, however, had plenty of 737-300s. While those are now all gone, the A319 fleet has grown to nearly match the original size. American likes these for longer, thinner routes but my guess is we’ll probably see some of the pre-merger US Airways aircraft disappear over time as they come off lease.

The Next Generation: There really isn’t one on the horizon right now, but my money is on either a larger C-Series or E2 aircraft if American feels it needs something here.

Aircraft with 140 to 160 Seats

 The 140 to 160 seat size is a staple in the airline industry these days, and American has had a ton of different airplanes that have fit the bill over the years.
American Fleet Mix 140 to 160 Seats
Back in 2000, the MD-80 ruled the skies for both American and TWA. The 727s were nearly retired and larger 737s still weren’t in vogue yet. America West and more recently US Airways had A320s, but as you can see, after 2005 that fleet didn’t grow much. American was late to the game, but it started retiring MD-80s in force and you can see that here. In its place? The 737-800. That won’t change. We’ll continue to see more 737-800s while the MD-80s disappear entirely in the next couple of years.

What about those A320s? They don’t have much of a place at American anymore, and as they come off lease, the airline has been retiring them. I imagine those will go away completely in time since they just don’t fit in the fleet plan.

It’s important to note how many fewer aircraft are operating in this space compared to 2000. Part of this was simply TWA. That was a bunch of capacity that American ended up cutting because it failed to see that the acquisition was a bad strategy in the first place. But another part of it is the growth in A321s.

The Next Generation: The 737 MAX8 will carry the torch here with 100 on order.
Aircraft with 175 to 200 Seats
And now on to the A321s. In terms of manufacturer, this is the opposite story of the last one.
American Fleet Mix 175 to 200 Seats
If anyone needs an example of how Boeing has screwed up in this category, American provides it. Back in the day, the 757 was the king. Yes, the 767-200s had longer range but those were niche airplanes. It was the 757 that served as THE high capacity narrowbody. But then Boeing messed up. Instead of investing in a new version, it decided the 737-900 would be good enough. It wasn’t.
At the same time, the A321 proved to be a rock star. American has been rapidly retiring 757s since the US Airways merger, and it will be keeping a fleet only to serve the markets the A321 can’t. That’s primarily short Transatlantic routes, Phoenix to Hawai’i, and some Latin American flights.

The Next Generation: It’s all about the A321neo here. That airplane is going to be a category killer, even moreso than the A321 is today. American has 100 of these on order.
Aircraft with 200 to 240 Seats
Now let’s look at widebodies
American Fleet Mix 200 to 240 Seats
These aircraft might be technically in the same competitive set, but they did different things. American used to use the A300 back in the day to pack in a bunch of people (maybe even more than the 240), but that’s because it was in a domestic-style configuration. It was useful for flying to the Caribbean and some shorter European stages, but it long ago outlived its usefulness, and that’s flying handled by narrowbodies now. It was the 767-300 that really hit the spot for smaller-gauge, long-haul flying.

As part of this fleet announcement, American said it will retire a further 8 767-300s so that only 17 are left flying in 2018. Those can’t be more than a couple more years away from being gone completely.

The Next Generation: There’s something of a split here. As new narrowbody aircraft come out with greater range than even the 757, American can use those to fly some routes that don’t need the capacity of a 767 today. But the true replacement is the 787-8 which is already on the property. That airplane can do everything the 767 can do and more.

Aircraft with 240 to 260 Seats
The next level up we’ll call the mid-size widebody.
American Fleet Mix 240 to 260 Seats
American’s 777-200s with 247 seats used to fall into this category but only because American had a very generous layout on this airplane that was not very dense. US Airways, however, had the A330-200 as a relatively recent member of the fleet to fill that gap.

While American has kept 13 of the 777s in a slightly denser 260 seat capacity, that’s primarily for the New York-London route. It’s really the A330-200 that is the workhorse of this category.
The Next Generation: American has 22 787-9s on order which are going to fit right into this category. The A330-200s still have plenty of life in them and won’t be going away anytime soon, but the 787s are the future.

Aircraft with 270 to 300 Seats
And now we keep getting bigger.
American Fleet Mix 270 to 300 Seats
The A330-300 is on death row, and you can see why. With 34 of the 777-200s being reconfigured to have 289 seats, the A330-300 becomes redundant. Further, the 9 A330-300s in the fleet have a Pratt & Whitney engine that’s not on any other aircraft American owns. You can see why this is gone.
The Next Generation: There are 22 A350-900s on order which will slot into this space.

Aircraft with More Than 300 Seats
Lastly we have the big boys. There’s no point in showing a chart here. American had nothing in this range at all since it (along with TWA and yes, America West) retired 747s years ago. But American’s previous management team came to realize that the 777-300 was a good fit for the airline, and that was as smart move. With 18 aircraft in the fleet now, this hits a sweet spot on many big long haul routes.

The Next Generation: Good question. There’s nothing on the books now, but an A350-900 or a 777X could come in the future. The 777-300s have a lot of life left in them, however, so I wouldn’t look for this to come soon.

One thing you might have noticed is the decrease in overall fleet size. Back in 2000, there were more than 1,400 airplanes flying between American, TWA, US Airways, and America West. Now there are less than 1,000. Most of this is because TWA and US Airways had a lot of bad capacity out there that wasn’t sustainable, but it’s important to note the fleet size has been steady for the last several years.
Though we’ll always see some fluctuation, that seems like a pretty good place for the fleet at this point in time. I’m hopeful that eventually American will bring back some smaller aircraft into its fleet in much greater quantities than that in which the Embraer 190 exists today.

If you enjoyed this look back, let me know. In the future I can try to do the same for Delta and United.