American orders 47 787’s

AAL is being run like a Private Equity shop - take cheap debt while they can / could, and use it to fund every dollar of the share repurchase program (in reality they used it to buy the airplanes, but then used their excess cash after that to repurchase the shares...so what actually happened is they funded the share repurchases with the large amount of debt).

If the industry truly is reformed (a big if), it will have been a brilliant tactic by AA. Think of the share repurchase this way: at the moment, all of the airlines trade at tremendously cheap values relative to the rest of the stock market because of the historic stigma. So AAL is betting that in the mid-to-long run, the market will realize that the industry is "fixed" and the stocks will begin to trade more like the rest of the market. If that ends up being true, the potential unlocked value in airline stocks would be a far superior return than simply continuing to grow or investing in the product (potentially much higher). If the industry truly isnt reformed, and we have another round of bankruptcies, AAL will have wished they hadn't taken on all of that debt and hadn't spent as much in share repurchases.

It's a bit simplistic of a way to think about it, but as a company you are always seeking what generates the best returns: growing the airline/investing in the product, buying back your shares, or repaying your debt.

I see this fleet move as really nothing more than overall fleet simplification for American, not really an Airbus vs. Boeing (or A350/A330 vs. 787) debacle. American already has more 787's than A330's, and they are newer, so it makes sense to stick with that type and begin consolidating. I think they will eventually be an A319/738/A321 narrowbody operator, and 787/777 widebody operator. Lots of savings to be had by reducing all the overlapping fleet types.

Since Max brought it up, and you're the guy to ask...

Do you have an opinion on the A321LR vs an A322 (re-winged 321LR) vs the pseudo proposed 797? Will the 321LR fulfill the middle market, or is there room for a 5,000nm 200-250 seat jet?

If the market exists, is it an entry point for longer range ULCC products, or is that something legacy carriers will be interested in also?
 
Since Max brought it up, and you're the guy to ask...

Do you have an opinion on the A321LR vs an A322 (re-winged 321LR) vs the pseudo proposed 797? Will the 321LR fulfill the middle market, or is there room for a 5,000nm 200-250 seat jet?

If the market exists, is it an entry point for longer range ULCC products, or is that something legacy carriers will be interested in also?

The 797, will be a thing! :)
 
There has definitely been a major shift on this board from 5-10 years ago to now. Before it was "Airbus is the devil! They are subsidized by the government and don't play fair! Their planes are plastic pieces of junk! If it ain't Boeing, blah blah"

That sure has seen a 180 degree shift with guys here.
What doesnt get mentioned enough is how quiet the A320s are compared to the 737s. At our [dysfunctional] shop we take the headsets off at FL180 and dont put them back on until the approach checklist, definitely not something you could do in the BOEING (caps cus you'd have to yell to hear each other in the 737)
 
Do you have an opinion on the A321LR vs an A322 (re-winged 321LR) vs the pseudo proposed 797? Will the 321LR fulfill the middle market, or is there room for a 5,000nm 200-250 seat jet?


He knows WAY more about this than I do but... The 321 has about 10,000lbs more useful load still in the wing. Nobody seems to care about speed or climb performance (mostly) anymore So it's pretty conceivable you could get a 321LR+++ to go almost 5000 miles. Hell, Wow is running there 321neo (not LR) from KEF to SFO. Granted they are taking a hit in payload to get the gas on board but that's just over 4000 miles already. The problem comes from the crappy performance limiting it to long runway, but honestly, there aren't THAT many 5000 mile apart city pairs that have little runways. The other issue is cargo. There are a lot of city pairs that would be sustainable, but only due to the cargo demand. The 321 bins are already getting filled up with ACTs in order to carry gas, and every extra tank you add in knocks out cargo space (and payload weight if full of gas). I think the tipping point will come when the cargo line crosses the bin space line on the chart, prior to the wing running out of capacity.
 
the
The A330F is a bit bigger than the A300s.

Max was cold, as usual he was wrapped tightly in his all too familiar looking puke green colored patient blanket. That easily appeared to resemble a Sith cloak. The air from the AC was blowing on overdrive, it had to be about at least 60 degrees. It was dark here now with only the interior running lights providing their dim yellow colored illumination. He had long ago gone nose blind, to rank stench, that smelled like a horrible concoction of crotch rot, halitosis, ripe underarms and ass. Because you can totally say that here. He looked out over the landscape of the milieu that he now controlled, with an eagle-like eye. Like a powerful raptor riding high upon the roaring wind, while looking for festering carrion. Tonight was no different than any other at the psychiatric emergency room. The plethora of black recliners that littered the milieu, were now full of unwilling patients brought in against their will by local PD. The patients that had just hours earlier been sleeping or eating out of the dumpster, now like Jetway Jesus, became emboldened and entitled. Expecting to be treated as if the PICU, was the fracking Four Seasons.

Bored, tired and half asleep, while sitting out in the hallway on watch, on his portable computer. Max got notification, that he had a new message on his favorite web forum. It was from his arch-nemesis, @ASpilot2be. Excited now to have a purpose, for a moment of escape from his sheer insufferable boredom. He felt an adrenaline surge. His heart was racing now, beating in his chest like an 808 drum. He read the message. His first thought was. "Does. He. Know. Who. I. Am? Does he need to ask about me out here in these streets???"

Of course Max knew that an A330 was larger than a A300. But still Max, could not argue with the wisdom of truth. And simply, but reluctantly hit the like button.

"Well played Alec," Max said. "Well played. You win this round, you former A.Netter."

Still huddled underneath his blanket. A patient comes up to Max.

"How do you expect us to eat this crap? It's just two slices of bread, and a single slice of processed cheese."

"What were you eating before you came here?"

"I haven't eaten in a week, been hopped up on Crystal."

"Then this is an improvement."

Max looks up at the clock. It's 0245. Time to do that last 15 minute safety round of his two hour stretch of rounds before his lunch at 0300. Panic suddenly grabs hold of him tightly, never letting go. Causing an abrupt monsoon-like surge of sweat and adrenaline to pummel him. No time to proofread and make any grammatical corrections. He says fearing another foe will soon surface. That Fox, he sees everything. EVERYTHING! His displeasure will show again, if I have used commas incorrectly. PM's will be sent. A conversation will be had. But alas Max said surrendering to the restraints of time. What can I do? As he got up to go room to room, on the in-patient side, checking for suicides or overdoses.
 
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Doesn't your shop have a timeline for phasing out the MD's? Aren't the 300's being phased out eventually too? Wouldn't a new 330F be a good A300 replacement?

#anet
The timeline on both keeps changing. There's no direct replacement. The 767F can kinda replace the 10-10 but barely. There's no airplane currently produced that can carry what a -11 can for the burn. I've heard no rumors on the -330 coming here, it's kind of a bastardized freighter anyways with the whole nosewheel mod.
I'd imagine once a P to F conversion becomes available for the 772 we could see those get pulled out of the desert and flown domestically.
 
Doesn't your shop have a timeline for phasing out the MD's? Aren't the 300's being phased out eventually too? Wouldn't a new 330F be a good A300 replacement?

#anet
The timeline on both keeps changing. There's no direct replacement. The 767F can kinda replace the 10-10 but barely. There's no airplane currently produced that can carry what a -11 can for the burn. I've heard no rumors on the -330 coming here, it's kind of a bastardized freighter anyways with the whole nosewheel mod.
I'd imagine once a P to F conversion becomes available for the 772 we could see those get pulled out of the desert and flown domestically.
As a matter of fact, I read recently that Boeing was thinking of doing just that. For the glut of 772, coming off lease.

Sent from my SM-N950U using Tapatalk
 
You'd be surprised how little they do know. There is sort of an area focus and serious bias that goes on with that culture. It's about as bad as Ford vs. Chevy at times with them.
Kind of like a certain other employee groups obsession with side sticks, tray tables, and trim wheels ;)?
 
AAL is being run like a Private Equity shop - take cheap debt while they can / could, and use it to fund every dollar of the share repurchase program (in reality they used it to buy the airplanes, but then used their excess cash after that to repurchase the shares...so what actually happened is they funded the share repurchases with the large amount of debt).

If the industry truly is reformed (a big if), it will have been a brilliant tactic by AA. Think of the share repurchase this way: at the moment, all of the airlines trade at tremendously cheap values relative to the rest of the stock market because of the historic stigma. So AAL is betting that in the mid-to-long run, the market will realize that the industry is "fixed" and the stocks will begin to trade more like the rest of the market. If that ends up being true, the potential unlocked value in airline stocks would be a far superior return than simply continuing to grow or investing in the product (potentially much higher). If the industry truly isnt reformed, and we have another round of bankruptcies, AAL will have wished they hadn't taken on all of that debt and hadn't spent as much in share repurchases.

It's a bit simplistic of a way to think about it, but as a company you are always seeking what generates the best returns: growing the airline/investing in the product, buying back your shares, or repaying your debt.

I see this fleet move as really nothing more than overall fleet simplification for American, not really an Airbus vs. Boeing (or A350/A330 vs. 787) debacle. American already has more 787's than A330's, and they are newer, so it makes sense to stick with that type and begin consolidating. I think they will eventually be an A319/738/A321 narrowbody operator, and 787/777 widebody operator. Lots of savings to be had by reducing all the overlapping fleet types.
Thank you for dumbing it down :)

Hopefully the industry has transformed but I’m skeptical.
 
I think they will eventually be an A319/738/A321/797 narrowbody operator, and 787/777 widebody operator. Lots of savings to be had by reducing all the overlapping fleet types.

I think this order, along with their large orderbook of A321neo's, effectively kills an AAL 797. I only say that based on how much emphasis they placed on fleet simplification in their press release - it was mentioned on 4 separate occasions. If you can cover the 797's from below with the A321neo and above with 787-8's, it may not make sense to add the complexity of a 3rd type for a narrow operating profile. Who knows though - their priorities may change in 5-10 years.

Also, per various industry sources, it seems the 797 is categorized differently ;)

Since Max brought it up, and you're the guy to ask...

Do you have an opinion on the A321LR vs an A322 (re-winged 321LR) vs the pseudo proposed 797? Will the 321LR fulfill the middle market, or is there room for a 5,000nm 200-250 seat jet?

If the market exists, is it an entry point for longer range ULCC products, or is that something legacy carriers will be interested in also?

He knows WAY more about this than I do but... The 321 has about 10,000lbs more useful load still in the wing. Nobody seems to care about speed or climb performance (mostly) anymore So it's pretty conceivable you could get a 321LR+++ to go almost 5000 miles. Hell, Wow is running there 321neo (not LR) from KEF to SFO. Granted they are taking a hit in payload to get the gas on board but that's just over 4000 miles already. The problem comes from the crappy performance limiting it to long runway, but honestly, there aren't THAT many 5000 mile apart city pairs that have little runways. The other issue is cargo. There are a lot of city pairs that would be sustainable, but only due to the cargo demand. The 321 bins are already getting filled up with ACTs in order to carry gas, and every extra tank you add in knocks out cargo space (and payload weight if full of gas). I think the tipping point will come when the cargo line crosses the bin space line on the chart, prior to the wing running out of capacity.

@BobDDuck has summed it up well. An A321LR and any supposed A321+ or whathaveyou would probably have competitive operating economics vs. a 797, so it will all come down to what Boeing can build / sell a 797 for. If it's too expensive, it will get squeezed by the MAX 10 / A321LR / A321+ on the lower end, and the A330neo/787 on the upper end. Boeing has already come out saying that they are not planning on utilizing brand-new technology engines, so this is good news for keeping development costs down - but if it's an engine based on current technology, then that means even more efficiency must be extracted from the design of the aircraft itself, vs. fuel consumption improvements on the engine.

Per news reports yesterday, it sounds like Airbus has put their "Plus" aircraft developments on hold (A320neo+ and A321neo+). They claim it's to divert resources to support rate increases, but who knows if it's a game theory thing to force Boeing to show their hand on the 797. Should be an interesting 1-2 years, that's for sure.
 
He knows WAY more about this than I do but... The 321 has about 10,000lbs more useful load still in the wing. Nobody seems to care about speed or climb performance (mostly) anymore So it's pretty conceivable you could get a 321LR+++ to go almost 5000 miles. Hell, Wow is running there 321neo (not LR) from KEF to SFO. Granted they are taking a hit in payload to get the gas on board but that's just over 4000 miles already. The problem comes from the crappy performance limiting it to long runway, but honestly, there aren't THAT many 5000 mile apart city pairs that have little runways. The other issue is cargo. There are a lot of city pairs that would be sustainable, but only due to the cargo demand. The 321 bins are already getting filled up with ACTs in order to carry gas, and every extra tank you add in knocks out cargo space (and payload weight if full of gas). I think the tipping point will come when the cargo line crosses the bin space line on the chart, prior to the wing running out of capacity.
Yeah, that was while an A330 was down and instead an A321 oversold by 120+ people per day was doing KEF-SFO/LAX to keep the airline afloat lol. The flight would plan for a stop in YEG or GEG, but usually overfly them and go non-stop. The most impressive thing is that at least one day, WOW flew a normal(non-NEO) A321 to LAX with a fuel stop.

This went on at least 1 month I think, that $350 ticket from SFO to AMS via Iceland doesn't look so good anymore when you land in Iceland on the way home and find out the last leg is oversold by over 120 people, and so is the next flight which isn't for several days anyway, and you're given the $57 remaining on your ticket as the airline has no interline agreements and dumped in Iceland. Hopefully with a high credit limit.
 
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