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Reasoning Behind American Choosing A320 & 737?  
User currently offlinedkramer7 From Australia, joined Jun 2008, 133 posts, RR: 0
Posted (2 years 4 months 3 weeks 3 days 7 hours ago) and read 14246 times:

So American have decided to go with both the A320 family NEO and 737MAX.

Would it not have been better to choose 1 only? Especially given they are trying to reduce their costs

43 replies: All unread, showing first 25:
 
User currently offlinevaus77w From Australia, joined Aug 2011, 143 posts, RR: 0
Reply 1, posted (2 years 4 months 3 weeks 3 days 7 hours ago) and read 14188 times:

Quoting dkramer7 (Thread starter):
So American have decided to go with both the A320 family NEO and 737MAX.

Would it not have been better to choose 1 only? Especially given they are trying to reduce their costs

Sigh...I'm sure this was discussed extensively at the time of the orders. I think the main reason is that neither manufacturer could meet the volume of planes AA requires in the necessary timeframe for retirement of ther oldest fleets (762s, 752s, MD80s etc). They can also probably leverage A and B off each other for future orders in the future.


User currently offlinenws2002 From United States of America, joined Feb 2008, 926 posts, RR: 0
Reply 2, posted (2 years 4 months 3 weeks 3 days 6 hours ago) and read 14123 times:

I've heard many on here say that once you reach a certain fleet size there isn't much to gain my sticking to it and you might gain advantages by using the different types in different roles. Don't know if that is true, but it seems to be the party line from DL.

User currently offlinedkramer7 From Australia, joined Jun 2008, 133 posts, RR: 0
Reply 3, posted (2 years 4 months 3 weeks 3 days 6 hours ago) and read 14019 times:

Quoting vaus77w (Reply 2):

I searched but could not find any reference to this


User currently offlineB377 From United States of America, joined Apr 2005, 142 posts, RR: 0
Reply 4, posted (2 years 4 months 3 weeks 3 days 5 hours ago) and read 13802 times:

Quoting dkramer7 (Thread starter):
Would it not have been better to choose 1 only? Especially given they are trying to reduce their costs

My recollection of the July 2011 deal, was that both Airbus and Boeing both offered such a cost effective deal, including all financing, so AA's BOD decided to accept both offers.


User currently offlinestarrymarkb From United Kingdom, joined Apr 2011, 174 posts, RR: 0
Reply 5, posted (2 years 4 months 3 weeks 3 days 4 hours ago) and read 13623 times:

Also in a further split IIRC the A319s are planned to have CFM engines and the A321s will have IAEs

User currently offlineolddominion727 From United States of America, joined Jan 2012, 395 posts, RR: 0
Reply 6, posted (2 years 4 months 3 weeks 3 days 4 hours ago) and read 13477 times:

it was purely for the volume reasons. I believe it went along with their announcement. My only question is the A321NEO going to have the same range as the 757? That way they can use them to HI and EU?

User currently offlineXT6Wagon From United States of America, joined Feb 2007, 3432 posts, RR: 4
Reply 7, posted (2 years 4 months 3 weeks 3 days 4 hours ago) and read 13470 times:

It came down to one critical thing.
Boeing could not produce enough frames to satisfy AA and their other customers at the same time.
Airbus could not produce enough frames to satisfy AA and their other customers at the same time.

So AA had to split the order since they failed to act on a narrowbody fleet renewal program in sufficent time to avoid having to replace massive portions of their fleet in a relatively short period of time.

I don't think it will matter outside of a modest increase in crewing and mx costs partialy offset by the ability to put the planes on the routes they are more suited for more of the time. Which is far less than the costs they would have seen trying to keep thier fleet limping along under the rates one company alone could have supplied.


User currently offlinesweair From Sweden, joined Nov 2011, 1833 posts, RR: 0
Reply 8, posted (2 years 4 months 3 weeks 3 days 3 hours ago) and read 13292 times:

Quoting olddominion727 (Reply 6):
My only question is the A321NEO going to have the same range as the 757? That way they can use them to HI and EU?

Actually it looks like the MAX-9 will have greater range than the A321 NEO, you will not see either A321 or MAX-9 go TATL, 757 have 4100nm range and the NEO/MAX have about 3600nm maximum range.

Hawaii, sure, they will make it and trans continental US as well.

757s will get replaced by 767/A330/787 on TATL. And A321/739 on domestic routes. There will be no true NB 757 replacement ever.


User currently offlineStitch From United States of America, joined Jul 2005, 31436 posts, RR: 85
Reply 9, posted (2 years 4 months 3 weeks 2 days 22 hours ago) and read 12699 times:
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Quoting dkramer7 (Thread starter):
Would it not have been better to choose 1 only? Especially given they are trying to reduce their costs

Yes, but as others have noted, AA's delivery timetable and volume (close to 500 aircraft), would have required either Boeing or Airbus to dedicate most of their narrowbody production to AA and that was not possible as they had other customer contracts.

So AA had no choice but to order both the A320 and 737 families.


User currently offlinedbo861 From United States of America, joined May 2004, 908 posts, RR: 1
Reply 10, posted (2 years 4 months 3 weeks 2 days 17 hours ago) and read 10766 times:

According to Wikipedia they only ordered 11 A319s. I wonder why so few. It'll be a nice bridge between the E145 and 738.

User currently offlinegigneil From United States of America, joined Nov 2002, 16347 posts, RR: 85
Reply 11, posted (2 years 4 months 3 weeks 2 days 17 hours ago) and read 10175 times:

I don't think Wikipedia knows, since the breakout in detail isn't available.

They ordered mostly A321s, true, as well as A319s. No need for A320s, since they have that size class very well covered with the 738.

NS


User currently offlineckfred From United States of America, joined Apr 2001, 5311 posts, RR: 1
Reply 12, posted (2 years 4 months 3 weeks 2 days 16 hours ago) and read 10092 times:

On the day that both orders were announced, I saw an interview with then AMR presdient Tim Hortonon CNBC. IIRC, Horton said that both A and B made very good offers in terms of price and equipment mix (A319/320/321 current and Neo and 737-700/-800/-900 NG and MAX). But, management felt that it needed a larger order than either A or B could handle. AA has a very large fleet of MD-80s that needs to be retired ASAP. AA needs to start replacing the 757s soon. The 762s are also getting older and have cost issues.

So, management and the BoD agreed to order from both A and B, and map out a fleet alignment between A and B: A319 for aircraft somewhat smaller than the MD-80, 738 for aircraft slightly larger than the MD-80, and the A321 for a similar size to the 757, as well as 762s on the trans-con routes.

It's been described at a win for Airbus and a loss for Boeing, since AA hadn't ordered any Airbuses since the A300 fleet. But I heard people from both A and B saying on CNBC, after the Horton interview, that neither manufacturer had the capacity to take the complete order. When AA management started talking about the size of the potential order, both figured that they were going to get part of the order.


User currently offlineLHCVG From United States of America, joined May 2009, 1642 posts, RR: 2
Reply 13, posted (2 years 4 months 3 weeks 2 days 16 hours ago) and read 9898 times:

Quoting dkramer7 (Reply 3):
I searched but could not find any reference to this

It has been mentioned countless times by mx and fleet management folk on here. It's just economies of scale - once you reach a certain fleet size where you can justify special parts and retain a critical mass of mx personnel for that type, the complexity issue goes away pretty fast. As nws notes above, for a big operator there are often advantages to be found in tailoring a/c to specific situations where their particular economics are superior. Small carriers and ardent single-type operators like WN and FR see this complexity as a negative and not worth the hassle, but to a large carrier, the benefits may outweigh the costs. Plus, you avoid the potential for an entire section of your lfeet getting wiped out by a major recall or etc. for one particular model.


User currently offlineStitch From United States of America, joined Jul 2005, 31436 posts, RR: 85
Reply 14, posted (2 years 4 months 3 weeks 2 days 16 hours ago) and read 9609 times:
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Quoting dbo861 (Reply 10):
According to Wikipedia they only ordered 11 A319s. I wonder why so few.

Per the Fleet Renewal presentation AA published, the 737-700/A319-100 fleet would be used for:

Secondary domestic markets
Select markets in Latin America
High-altitude or short-runway airports

(And yes, I know AA does not have any 737-700s in their fleet, but evidently they do have the option with Boeing).


User currently offlineDocLightning From United States of America, joined Nov 2005, 20362 posts, RR: 59
Reply 15, posted (2 years 4 months 3 weeks 2 days 16 hours ago) and read 9385 times:

Quoting starrymarkb (Reply 5):

Also in a further split IIRC the A319s are planned to have CFM engines and the A321s will have IAEs

Which isn't such a big deal. I believe that the NEO will have swappable engines and AA is going with power-by-the-hour with both, I'm sure, so they will know ahead of time precisely what the costs of operation are (aside from fuel, of course).

Quoting sweair (Reply 8):
757s will get replaced by 767/A330/787 on TATL. And A321/739 on domestic routes. There will be no true NB 757 replacement ever.

Exactly. Just as there will be no true 707 or 727 replacement, there will be no 757 replacement. There will be new aircraft with overlapping capabilities.

Does anyone know, will AA be keeping separate pilot pools for the A319 vs A321? If that's the plan, then ordering the 737-8MAX makes sense.


User currently offlineDeltaMD90 From United States of America, joined Apr 2008, 7980 posts, RR: 51
Reply 16, posted (2 years 4 months 3 weeks 2 days 15 hours ago) and read 9217 times:

If you think about it, introducing 1 frame of a new type is very expensive... there is a lot that goes into getting the new type. Add another one, the cost to maintain the 2 go up but the price PER frame goes down. Add more and more, and the price per frame goes down and down and essentially levels off at $X per frame... add more frames and the price will still be $X per frame. Because AA is ordering so many MAX and NEOs, they'll reach that point in both fleets so it isn't substantially more expensive to have the 2 fleet types. In return, they get the planes faster from the 2 manufacturers and have a little bit more of a diverse fleet.

If that was too confusing or flat out wrong, just ignore what I said  



Ironically I have never flown a Delta MD-90 :)
User currently offlinegigneil From United States of America, joined Nov 2002, 16347 posts, RR: 85
Reply 17, posted (2 years 4 months 3 weeks 2 days 15 hours ago) and read 9061 times:

Quoting DocLightning (Reply 15):
Exactly. Just as there will be no true 707 or 727 replacement

idk. the 757 is almost identical in size to a 727.

NS


User currently offlineDocLightning From United States of America, joined Nov 2005, 20362 posts, RR: 59
Reply 18, posted (2 years 4 months 3 weeks 2 days 15 hours ago) and read 8950 times:

Quoting DeltaMD90 (Reply 16):

If you think about it, introducing 1 frame of a new type is very expensive... there is a lot that goes into getting the new type. Add another one, the cost to maintain the 2 go up but the price PER frame goes down. Add more and more, and the price per frame goes down and down and essentially levels off at $X per frame... add more frames and the price will still be $X per frame. Because AA is ordering so many MAX and NEOs, they'll reach that point in both fleets so it isn't substantially more expensive to have the 2 fleet types. In return, they get the planes faster from the 2 manufacturers and have a little bit more of a diverse fleet.

This is called "economy of scale."

There are two sorts of costs associated with a fleet of vehicles (be they rickshaws or A380's). There are fixed overhead costs for the fleet. Training people to maintain them. Establishing a purchasing system for parts. Training people to operate them. These are systematic costs that change little with the overall number of vehicles in the system. The more units you buy, the more you spread these costs out among the units.

Then there are per-unit costs that are directly 1:1 variable with the number of units purchased. The cost of the units. The cost of fuel. The cost of paying for pilots (or rickshaw drivers). Maintenance costs. Etc.

After a certain fleet size, the first type of cost begins to approach zero per unit. Adding more units doesn't significantly decrease those costs. At that point, other considerations (delivery slots, specific performance considerations, etc.) become more important than reducing overheads.


User currently offlineAirbusA6 From United Kingdom, joined Apr 2005, 2038 posts, RR: 0
Reply 19, posted (2 years 4 months 3 weeks 2 days 14 hours ago) and read 8337 times:

Back in the 80s AA ordered both the 767-300 and A300-600, so it's not the first time when they've ordered similar products from both A and B


it's the bus to stansted (now renamed national express a4 to ruin my username)
User currently offlinetommy767 From United States of America, joined Aug 2003, 6936 posts, RR: 9
Reply 20, posted (2 years 4 months 3 weeks 2 days 14 hours ago) and read 8308 times:

Good call.

Wish UA would order some 320 NEOs



"KEEP CLIMBING" -- DELTA
User currently offlinemaxpower1954 From United States of America, joined Sep 2008, 1159 posts, RR: 7
Reply 21, posted (2 years 4 months 3 weeks 2 days 14 hours ago) and read 8061 times:

Quoting DocLightning (Reply 15):
Does anyone know, will AA be keeping separate pilot pools for the A319 vs A321? If that's the plan, then ordering the 737-8MAX makes sense.

Highly unlikely. It's a common type rating; at my company I fly the 319, 320 and 321 - sometimes on the same two day trip.

[Edited 2012-08-04 15:25:57]

User currently offlineDeltaL1011man From United States of America, joined Sep 2005, 9700 posts, RR: 15
Reply 22, posted (2 years 4 months 3 weeks 2 days 14 hours ago) and read 7777 times:

Quoting DocLightning (Reply 15):

Does anyone know, will AA be keeping separate pilot pools for the A319 vs A321? If that's the plan, then ordering the 737-8MAX makes sense.

I would think the A32S family will all have the same pilot pool as with the 737. My guess is the A321 will have a higher rate than that of the A320/A319. (and any 739s would have higher rates than the 738/G but with the same pool of pilots)

I don't think i have heard of airline keeping A319 pilots separate from 320 or 321.



yep.
User currently offlineKC135TopBoom From United States of America, joined Jan 2005, 12181 posts, RR: 51
Reply 23, posted (2 years 4 months 3 weeks 2 days 13 hours ago) and read 7575 times:

Quoting olddominion727 (Reply 6):
My only question is the A321NEO going to have the same range as the 757? That way they can use them to HI and EU?

No, they cannot use the A-321 to go west coast to Hawaii. It has the range but not I don't think it has enough fuel left for the holding requirements over an island destination.

Quoting sweair (Reply 8):
Actually it looks like the MAX-9 will have greater range than the A321 NEO, you will not see either A321 or MAX-9 go TATL, 757 have 4100nm range and the NEO/MAX have about 3600nm maximum range.

Hawaii, sure, they will make it and trans continental US as well.

Even though Hawaii has several airports, and military fields that can easily handle airliners, I believe airliners coming from the CONUS still have to have the holding fuel

Quoting tommy767 (Reply 20):
Wish UA would order some 320 NEOs

Why? They couldn't get them before about 2020 anyway.


User currently onlinejfk777 From United States of America, joined Aug 2006, 8513 posts, RR: 6
Reply 24, posted (2 years 4 months 3 weeks 2 days 13 hours ago) and read 7449 times:
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Quoting XT6Wagon (Reply 7):
It came down to one critical thing.
Boeing could not produce enough frames to satisfy AA and their other customers at the same time.
Airbus could not produce enough frames to satisfy AA and their other customers at the same time.

The principle reason AA ordered Boeing and Airbus is no one maker couls make enough planes fast.


25 gigneil : UA just ordered 100 737 MAX airframes covering any size ( but they specified the -9). An order for 320 NEOs following that would be incongruous. Yes
26 gemuser : OK, I think you need a cite or more information here. According to the manufactures web sites the B738 has a range of 3115 nm and the A321neo will ha
27 delawareusa : The 757-200 has ~ 40 more pax (in all economy) then 727-200. The 757 was a size replacement for the 707. When customers wanted something closer to a
28 SWALUV : Knowing AA they have tendency to operate 767-300's on there Hawaiian routes. Do you think this could be a viable replacement?
29 Stitch : Yes.
30 spink : GC distance is ~2350 worst case (SEA-LIH, with LAX/SFO/SEA ranging from 2126-2350 nmi to LIH which is worst case). The 737NG/320/?321/Max/NEO should
31 zhiao : Can anyone explain why AA only ordered 10 A319s?
32 crAAzy : AA has ordered 130 A319s and 130 A321s (options for another 130 of each in NEO version). The first A319s will be delivered in 2013 (starting Q3) and o
33 gigneil : My mistake. Are you sure? I thought the NEO orders were firm, and that there were 130 OEO and 130 NEO. That is, in fact, what the Airbus orderbook re
34 Post contains links crAAzy : You are correct ... my bad. I should have gone back to read the press release! 130 firm OEO (mix of A319 and A321 between now and 2017). 130 firm NEO
35 yyz717 : The 752 was designed as the 722 replacement. The additional 40 seats and the severe recession 1981-83 made early orders very slow to realize. By the
36 Stitch : Boeing lists the 100 frame 737-800 order placed in July 2011. The 737 MAX order remains an MoU. The 787-9 order remains an MoU as AA did not wish to
37 LHCVG : I think DL still only has a handful of 73G's too. As with AA's plans for the 319s, they specifically use them on various secondary routes when they a
38 BlueSky1976 : Thank you for this information and for the link. This should put all "AA Airbus order is not firm" rumours, spread by well-known Airbus bashers, to r
39 Post contains links and images someone83 : It's not firm according to Airbus This is Airbus official overview, and no A319 or A321 orders for AA are listed here: http://www.airbus.com/fileadmi
40 sirtoby : Yes and no! The neo order is not in the Airbus O&D spreadsheet, as AA went in under Ch11 before the order was finalized. And I think it was said
41 DeltaL1011man : Delta has 10 73Ws but also has 50+ A319s.
42 Burkhard : At this fleet size, no. The costs of an extra fleet are significant if you speek about fleets of 20, but if you have 50 each the extra costs compared
43 Northwest727 : I'm surprised that AA bought something Airbus...I though AA was still in dispute over Airbus with who's at fault in AA587. Then again, that was going
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