Sponsor Message:
Civil Aviation Forum
My Starred Topics | Profile | New Topic | Forum Index | Help | Search 
Why Did AA Wait So Long To Replace Its Aircraft?  
User currently offlinemia305 From United States of America, joined Mar 2013, 319 posts, RR: 0
Posted (1 year 6 months 3 days 1 hour ago) and read 11082 times:

I'm just wondering why did AA wait so long to do so?
Wouldn't it have helped them now if they started replacing
their airplanes in the late 90's early 2000's?

Why didnt they order the 319's, 321's 773 eairler?

I understand about the 787 comming on line late last year & this year.
Also why didn't they get the MD90's as a longer replacement for the S80's
since they're more efficient.

29 replies: All unread, showing first 25:
 
User currently offlineSASMD82 From Netherlands, joined Mar 2007, 774 posts, RR: 0
Reply 1, posted (1 year 6 months 3 days ago) and read 10973 times:
Support Airliners.net - become a First Class Member!

Good question but doesn't this apply to - let's say - UA and DL as well?
I think the main reasons are price of fuel (which was a sort of nothing by the late 90s) as well as Chapter 11 which now allows them to introduce fuel efficient planes easier.

For a much longer periode I was wondering too why the MD90 did not receive much more sales.


User currently offlineAmerican 767 From United States of America, joined May 1999, 3827 posts, RR: 12
Reply 2, posted (1 year 6 months 3 days ago) and read 10940 times:
AIRLINERS.NET CREW
FORUM MODERATOR

Because they had one main idea in mind: reducing the number of fleet types.

9-11 is one reason I can think of. That was probably why they stopped phasing in 738s for a while, after the first batch of 75 units were delivered. A few years later they decided they would eventually ground the whole MD-80 fleet in the long run so they ordered more 738s in the late 2000s.

At that time, they had in mind phasing out the 727, the DC-10 and the MD-11.

Also, in the early 2000s (2001/2002), they were busy with the TWA merger and some of the MD-80s they got from them were still very young so there was no need to buy hundreds of new planes right away.

The 77W was still under study.

Another reason I can think of is back then American and Airbus weren't "friends" at that time. They weren't getting along well because of the crash of flight 587 in 2001. Nobody thought American would ever buy A32Xs from Airbus.

They went Airbus again a decade later, after the phase out of the A300, because they thought it would make sense to rely on two manufacturers with such a huge fleet.

They knew the 738 would be 30% more fuel efficient than the MD-80 so they chose the NG737 over the MD-90. Even after the QQ take over in 1999, they decided not to keep the 90 and after the TW take over in 2001, they decided not to keep the 717. Again, to reduce the number of fleet types.

The TWA buyout, at the time Don Carty was the CEO at American, was a mistake.

Ben Soriano



Ben Soriano
User currently offlinemia305 From United States of America, joined Mar 2013, 319 posts, RR: 0
Reply 3, posted (1 year 6 months 2 days 23 hours ago) and read 10735 times:

Quoting American 767 (Reply 2):

All valid points.

Even if AA wasn't "friends" with Airbus. They should've seen the benefits
of the 319's & 321's. If they would've done the fleet replacements sooner
they would be in a better position.


User currently offlinethegeek From Australia, joined Nov 2007, 2638 posts, RR: 0
Reply 4, posted (1 year 6 months 2 days 22 hours ago) and read 10619 times:

They had 738s on the way at the time of Sep 11,2001. These went to QF instead. So that's a small part of the answer.

User currently offlineIndependence76 From United States of America, joined Jul 2007, 252 posts, RR: 0
Reply 5, posted (1 year 6 months 2 days 22 hours ago) and read 10603 times:

Quoting American 767 (Reply 2):

As stated, yes, those were all valid points.

I personally believe that the analysts within AA regarding future fleet maintenance and fuel prices around 2005 were far too over-optimistic about the type's future. MD-80's became known as "gas guzzlers" more quickly than anticipated. In between 2008 and 2012, AMR spent $36bil. on fuel expenses alone.



"In general, pride is at the bottom of all great mistakes." - John Ruskin
User currently offlineAA737-823 From United States of America, joined Mar 2000, 5846 posts, RR: 11
Reply 6, posted (1 year 6 months 2 days 22 hours ago) and read 10486 times:

Quoting mia305 (Reply 3):
Even if AA wasn't "friends" with Airbus. They should've seen the benefits
of the 319's & 321's. If they would've done the fleet replacements sooner
they would be in a better position.

Not really. The A320 classic family isn't anything better than the 737NG. There's no point in ordering A320's when you have a fleet of 737-823's.

Additionally, you seem to be ignoring the fact that airplanes cost a LOT of money, and money is something American has struggled with for a while, as their competitors cut costs through bankruptcy protection. Sure, an A319 burns less fuel than an MD-80, but you'd have to get a LOT of life out of the 319 before the fuel burn difference paid the $60 million acquisition cost.
And the MD-80 is a reliable, rugged airplane. They aren't exactly hangar queens, like the Fokkers were.


User currently offlineus330 From United States of America, joined Aug 2000, 3871 posts, RR: 14
Reply 7, posted (1 year 6 months 2 days 16 hours ago) and read 9981 times:

Quoting mia305 (Thread starter):
Wouldn't it have helped them now if they started replacing
their airplanes in the late 90's early 2000's?

I believe they wanted to skip a generation of aircraft, and were waiting for Boeing to come out with the Y1--a 737/shorthaul aircraft replacement with a brand new design, but it soon became clear that production of the Y1 within the lifetime of the MD80s was a pipedream at best.


User currently offlineN737AA From United States of America, joined Aug 2008, 270 posts, RR: 0
Reply 8, posted (1 year 6 months 2 days 16 hours ago) and read 9951 times:

In short, 9/11. After that fatefull day, there was no money!

Until then there was a robust fleet plan that included 400+ 738's.

Pretty simple answer.

N737AA


User currently offlineLHCVG From United States of America, joined May 2009, 1585 posts, RR: 2
Reply 9, posted (1 year 6 months 2 days 15 hours ago) and read 9807 times:

Quoting N737AA (Reply 8):
Until then there was a robust fleet plan that included 400+ 738's.

Just to be clear, do you mean to say 400+ 738s, or 400+ 737s of mixed variants? Surely they would have gotten at least a few 73Gs even if they didn't get 739s.


User currently offlineghifty From United States of America, joined Jul 2010, 891 posts, RR: 0
Reply 10, posted (1 year 6 months 2 days 10 hours ago) and read 9193 times:

Quoting SASMD82 (Reply 1):
and DL as well?

DL has a habit of acquiring used aircraft and flying them to the scrapper. Lower up-front cost.. reduced ancillary mx costs because they own so many of them (717's coming in, etc). Heck, they recently placed a large order for 737NG's instead of the MAX. Again, the NG is cheaper up front.. DL seems to always be interested in minimizing up-front cost.

Quoting N737AA (Reply 8):

In short, 9/11. After that fatefull day, there was no money!

They had to make do. It would be interesting to see what AA's fleet makeup would be had 9/11 not happened. Would they even have placed an order for A320's?



Fly Delta Jets
User currently offlineckfred From United States of America, joined Apr 2001, 5251 posts, RR: 1
Reply 11, posted (1 year 6 months 2 days 10 hours ago) and read 9004 times:

In the late 1990s, AA and Boeing entered into an agreement to replace its entire fleet over a span of 20 years. Boeing was to be AA's exclusive aircraft supplier, but that language was dropped, in order to get EU approval of the Boeing-McDonnell Douglas merger.

As it was envisioned, the 737-808 was to replace the 727-200. The 737-700 was to replace the MD-80. The 737-600 was to replace the F100. The idea was that having over 400 737NG aircraft would cut AA's costs in terms of parts, training, and crew staffing.

Of course, it became clear that the 737-600 wasn't the plane that Boeing envisioned. It only works on longer, thin routes. It isn't a replacement for such aircrat as the 737-200/500, the F100, or similarly-sized DC-9s.

9/11 caused AA (and most everybody else) to cancel or delay deliveries of new aircraft. Cash was tight, and passenger traffic was down.

But, what caused AA to hold off on getting more 738s until 2009 was the rumor that Boeing was going to develop an all-new narrowbody. When Boeing decided to go forward with the 787 program, it touted a significant cost savings over the 767s that the 787 were to replace. Southwest told Boeing that if it developed a new narrowbody that had similar cost savings over the 737NG, it would immediately order 100 and put another 100 on option.

Before the 787 and 747-8 started developing all of their problems, supposedly, Boeing was looking to see if it could start work on a new narrowbody, and what sizes would make sense. (Not only were airlines wanting to replace Classic 737s, MD-80s, and older A320 series, but there were plenty of 757s getting up there in years.)

My understanding is that AA didn't want to commit to a large order of 738s, only to see Boeing come out with a new narrowbody as deliveries started. So, AA waited and waited. It appeared that no new narrowbody was going to be announced, and the price oil started its march towards $140, IIRC. That's when AA put in the 738 order that started deliveries in March or April of 2009.

As for the 787s, AA used the order as a stick to get its pilots to agree to a new contract. AA wouldn't confirm its order, until a new contract was ratified. In fact, the order wasn't confirmed until late last year.


User currently offlineairbazar From United States of America, joined Sep 2003, 8412 posts, RR: 10
Reply 12, posted (1 year 6 months 2 days 9 hours ago) and read 8739 times:

Quoting SASMD82 (Reply 1):
Good question but doesn't this apply to - let's say - UA and DL as well?

It applies to everyone. Few airlines have the luxury to be able to replace their fleet every 5-10 years. LH, arguably the most successful airline of our time to date, still operates 733's, 735's and A343's. Even EK which could become the most successful airline of all time still has A343's and A345's in their fleet, and it's not like they can't afford to replace them.
In AA's case, with a huge fleet of MD-80's, 737's and 757's, they didn't need to replace them with A319's and A321's. The 773 isn't a replacement as much as an expansion.


User currently offlineN737AA From United States of America, joined Aug 2008, 270 posts, RR: 0
Reply 13, posted (1 year 6 months 2 days 9 hours ago) and read 8534 times:

Quoting ckfred (Reply 11):
As it was envisioned, the 737-808 was to replace the 727-200. The 737-700 was to replace the MD-80. The 737-600 was to replace the F100. The idea was that having over 400 737NG aircraft would cut AA's costs in terms of parts, training, and crew staffing.

Not really, the plan was only for the -800 variant, I was involved in it from day 1 and took delivery of the first 77 that came into the fleet until defements started. I am sure that over the course of a 20 year deal for over 400 aircraft that there may have been the opportunity to talk about the -700/900 for MD80/757 replacements, but 9/11 came way before any of that planning had even begun. The 77 aircraft plus the young MD80s from TWA were more than enough given the reduction in flying that has taken place since that time until the second order was announced and we began receiving them in early 2009.

Quoting ckfred (Reply 11):
But, what caused AA to hold off on getting more 738s until 2009 was the rumor that Boeing was going to develop an all-new narrowbody.
Quoting ckfred (Reply 11):
My understanding is that AA didn't want to commit to a large order of 738s, only to see Boeing come out with a new narrowbody as deliveries started. So, AA waited and waited.

This is true, and this is also what lead to the A319/321 order as well, BOE couldn't produce enough a/c to meet the demands needed in the next few years......ala...A319/321 order.

N737AA


User currently offlineikramerica From United States of America, joined May 2005, 21534 posts, RR: 59
Reply 14, posted (1 year 6 months 2 days 8 hours ago) and read 7889 times:

Pilot contracts...

AA has been trying to right size their fleet, modernize, but also work out pay scales and work rules that make sense to them. For the longest time, the pilot union has been the most militant against management, forcing out some in 2003 only to foster the same distain for the group they hand picked to run the airline. It boiled over when AA had to cancel some LR route plans because of pilot refusal.

It took bankruptcy and finally a pilot contract for AA to announce their major fleet orders. I'm sure that many at AA wish they had just succumbed to pressure in 2003 and filed bankruptcy at that time. The fleet might look very different already had they done so. A330s? 788 launch customer? 739ERs already in the fleet replacing 757s?



Of all the things to worry about... the Wookie has no pants.
User currently offlinedirtyfrankd From United States of America, joined Apr 2011, 190 posts, RR: 0
Reply 15, posted (1 year 6 months 2 days 8 hours ago) and read 7694 times:

All good points. From a pure MD-80 replacement perspective, AA was also waiting for the longest time for a the new clean sheet replacement for the 737 (Boeing Y1?) rather than ordering more 737NG, etc.

User currently offlineSTT757 From United States of America, joined Mar 2000, 16878 posts, RR: 51
Reply 16, posted (1 year 6 months 2 days 8 hours ago) and read 7393 times:

AA did some belt tightening during the 2002-2006 period that in retrospect were really short sighted and caused more long term headaches.

1.) Deferring 738 deliveries
2.) Eliminating most Eagle flying from JFK
3.) Scaling back the JFK terminal project, it's half complete.



Eastern Air lines flt # 701, EWR-MCO Boeing 757
User currently offlineORDTLV2414 From United States of America, joined Mar 2013, 302 posts, RR: 0
Reply 17, posted (1 year 6 months 2 days 7 hours ago) and read 6989 times:
Support Airliners.net - become a First Class Member!

I ask myself the same question all the time, about AA and LY.

User currently offlineikramerica From United States of America, joined May 2005, 21534 posts, RR: 59
Reply 18, posted (1 year 6 months 2 days 7 hours ago) and read 6550 times:

Quoting ikramerica (Reply 14):
AA has been trying to right size their fleet, modernize, but also work out pay scales and work rules that make sense to them.

What I mean here, is that the management thought what they were asking for made sense. The pilots didn't even come close to agreeing. It's not a judgment thing, just a statement of fact. Not taking the AA management side, as I don't think they have been well managed during this period (ultimately ending up in BK anyway).



Of all the things to worry about... the Wookie has no pants.
User currently offlinebobloblaw From United States of America, joined Jan 2012, 1725 posts, RR: 1
Reply 19, posted (1 year 6 months 2 days 6 hours ago) and read 5970 times:

After 9-11, they didn't have any money. Also in the late 1990s the F100s were less than 10 years old. While their CASM was high, it wasnt too bad. There was no mission for the airbus narrow body in 2000, at AA.

User currently offlinejfk777 From United States of America, joined Aug 2006, 8387 posts, RR: 7
Reply 20, posted (1 year 6 months 2 days 5 hours ago) and read 5440 times:
Support Airliners.net - become a First Class Member!

9/11 is what killed the AA re fleeting plan, they has about 75 737-800's when they sold some later deliveries to Qantas and cancelled the rest. Mad Dogs were less fuel efficient but were also more depreciated then new 738's. Yes they stayed longer then we would like but what was AA supposed to do ? AA had to fly the fleet it had not the one which not be paid for.

User currently offlineTrijetsRMissed From United States of America, joined Oct 2006, 2364 posts, RR: 7
Reply 21, posted (1 year 6 months 2 days 2 hours ago) and read 4191 times:
Support Airliners.net - become a First Class Member!

Some valid points made in this thread.

In short, here is a timeline as it relates to the MD-80 retirement - the oldest fleet type:

- Q4 1991 - AA cancels remaining MD-80 options, citing decreases in revenue following the 1990/91 recession. Firm orders to be completed with remaining MD-83 deliveries through 1992.

- Q3 1993 - AA cancels remaining MD-11 options. The MD-90 is no longer considered and the relationship with MDC terminates.

- Q4 1996 - AA sign "gentleman's agreement" with Boeing for all future mainline aircraft purchases for the next 20 years. Immediate 738 order follows.

- Q1 1997 - AA officially announce replacement plan for the MD-80, with retirements and phaseout to occur between 2000-2010.

- Q1 2001 - AA complete the acquisition of TW. This includes the addition of 104 MD-80 aircraft. Phaseout timeline for the 350+ MD-80 fleet is revised.

- Q3 2001 - 9/11 and aftermath lead to an indefinite hold on the MD-80 replacement plan. Additionally, fuel costs are not yet a concern and most legacy aircraft are paid off and owned outright.

- 2004-2008 - AA retire older ex-TW MD-82s and oddball ex-QQ frames. Fleet remains at ~300. Replacement orders delayed to hold off Ch.11 bankruptcy and see what Boeing develops for Y1.

- Q3 2008 - AA places firm 738 to resume MD-80 replacements, in response to increased oil costs.

- Q3 2011 - With Y1 now out of the question, AA places landmark A/B order to complete the phaseout. Phaseout estimated to occur in 2017.

Quoting AA737-823 (Reply 6):
And the MD-80 is a reliable, rugged airplane. They aren't exactly hangar queens, like the Fokkers were.

   Or the A300's, for that matter.



There's nothing quite like a tri-jet.
User currently offlinejfklganyc From United States of America, joined Jan 2004, 3508 posts, RR: 5
Reply 22, posted (1 year 6 months 1 day 17 hours ago) and read 3277 times:

Post 9/11 was not like the bankruptcies that followed...

The immediate aftermath was just trying to stay in business. They were burning the deck chairs for warmth.

What AA did, which was its biggest mistake, was avoid BK while all its rivals did not. If even some of the carriers did what AA did, costs would have been higher all around and AA would have likely been ok. If US was allowed to go under (they were about a month away several years ago) AA's no BK plan likely would have worked.

However, in the end, capacity wasn't reduced quick enough...along with AAs higher costs...and the company was a sinking ship for most of the 2000s. It is hard to order 400 new aircraft in that environment.

Quoting STT757 (Reply 16):
AA did some belt tightening during the 2002-2006 period that in retrospect were really short sighted and caused more long term headaches.

1.) Deferring 738 deliveries
2.) Eliminating most Eagle flying from JFK
3.) Scaling back the JFK terminal project, it's half complete.

BOS, getting rid of the F100s and not replacing them with a large RJ, TWA 757s to Delta (may favorite stupid move), A300s with no replacement, RJ city at ORD against 2 class aircraft at ORD...

There were so many bad moves. It wasn't even in retrospect...we were calling them bad moves as they were going on.

They esentially allowed B6 to open full hubs in JFK, BOS, and SJU...and now they may pay a lot of money just to buy that back. Ridiculous


User currently offlineSTT757 From United States of America, joined Mar 2000, 16878 posts, RR: 51
Reply 23, posted (1 year 6 months 1 day 16 hours ago) and read 3231 times:

Quoting jfklganyc (Reply 22):
TWA 757s to Delta (may favorite stupid move),

That's a good one, excellent example of short sightedness. Allow them to go to a competitor at JFK, smooth move.

Quoting jfklganyc (Reply 22):
getting rid of the F100s and not replacing them with a large RJ,

While not as cut and dry as the boneheaded 757s to DL move, the 717s could have been useful to AA. Even in their small numbers dedicating them to ORD would have been an opportunity for AA. Later on they could have been supplanted by larger RJs, but it would have been a good interim solution.

Quoting jfklganyc (Reply 22):
A300s with no replacement,

The 757-200 really wasn't the answer, and the 763s needed to stay on longer International segments. While SJU probably was on the way out at some point no matter what aircraft they were flying. AA, and DL who later got them from NWA, missed the boat with the 753. While it has no where near the cargo capability of the A300, it was the lowest cost equipment available to move 220 passengers from one point to another. MIA-Caribbean, Colombia, Lima, Caracas, JFK-Dominican Republic, DFW-LAS, LAX-HNL etc..



Eastern Air lines flt # 701, EWR-MCO Boeing 757
User currently offlineckfred From United States of America, joined Apr 2001, 5251 posts, RR: 1
Reply 24, posted (1 year 6 months 1 day 14 hours ago) and read 3060 times:

Quoting ikramerica (Reply 14):
It took bankruptcy and finally a pilot contract for AA to announce their major fleet orders. I'm sure that many at AA wish they had just succumbed to pressure in 2003 and filed bankruptcy at that time. The fleet might look very different already had they done so. A330s? 788 launch customer? 739ERs already in the fleet replacing 757s?

I've talked to some pilots, before the Chapter 11 filing, and they agree. Everyone agrees that trying to reorganize outside of bankruptcy is cheaper, faster, and leaves employees and vendors in better shape. Management is still in control, as opposed to creditors, the bankruptcy trustee, and the judge, who may have different agendas. When AA's main competitors (UA, NW, and DL) all went through Chapter 11, it was clear that the reorg. of 2003 didn't go far enough.

Quoting STT757 (Reply 16):
AA did some belt tightening during the 2002-2006 period that in retrospect were really short sighted and caused more long term headaches.

1.) Deferring 738 deliveries
2.) Eliminating most Eagle flying from JFK
3.) Scaling back the JFK terminal project, it's half complete.

Again, that goes back to trying to do a reorganization, without the benefit of a bankruptcy, especially when major competitors are getting the benefits of a bankruptcy reorg.

Quoting STT757 (Reply 23):
While not as cut and dry as the boneheaded 757s to DL move, the 717s could have been useful to AA. Even in their small numbers dedicating them to ORD would have been an opportunity for AA. Later on they could have been supplanted by larger RJs, but it would have been a good interim solution.

It all goes back to the fact that the lease rates for the 717s were very high, because of TWA's bad credit, and the fact that AA and Boeing couldn't agree on lease rates that were in line with AA's credit rating in 2001-02, which was much higher. In retrospect, a lot of AA people believe that AA would have been better off keeping the 717s they had, and probably taking some of the remaining deliveries, with the best deal that Boeing offered.

By the same token, the F100s were owned outright, and the fact that Fokker had gone out of business wasn't the issue in 2001 and 2002 that it became just a year later. AA was fabricating its own parts, since spares were hard to find, and that was becoming a cost issue.

The 757 issue was a little harder to call boneheaded. Remember that if the UA/US merger had gone through, AA would have swapped the TWA 757s for the US fleet.

At the time, AA was trying to reduce the number of aircraft types, and having a subfleet of P&W powered 757s didn't make sense. Further, the FAA limited AA to 5 variations of the 757/767. Before the TWA purchase, AA had the 762, 762ER, 763ER, 757, and 757 used for extended overwater flying. The TWA 757s represented a 6th type, since it was P&W powered and had cockpit switches that threw in the opposite direction for AA 757s.

A friend of mine had been a 757/767 F/O from 1994 to 2008, and he was never trained on the TWA 757, and most of the pilots who flew the TWA 757s were former TWA pilots.

I'm not saying that sending the TWA fleet to DL wasn't boneheaded, but keeping them would have presented some issues. The costs and headaches of keeping the TWA 757s apparently outweighed the problems of getting rid of them.


25 Deltal1011man : uh... Delta has one(the?) of the oldest fleets in the US yet they are making money hand over fist.... The ATL hub is mostly M88s and 757s(the airplan
26 WesternA318 : This is EXACTLY why AA chose the AB6 over the 763 for the Caribbean operations. AA hauls a TON of cargo on those routes, and they wanted a plane that
27 ckfred : Remember that DL (and NW) have had the benefit of Chaper 11. As honorable as AA management was for trying to avoid Chapter 11 for so long, it should
28 Post contains images Deltal1011man : Delta is mostly parking 57s because they are hitting the cycle limits. Also replacing a good chunk of the A320 fleet. Funny, they just green lights c
29 ckfred : I was reading a recent Fortune magazine, and it doesn't paint a rosey picture for the merger. The opinion was that with the AA bondholders believing
Top Of Page
Forum Index

This topic is archived and can not be replied to any more.

Printer friendly format

Similar topics:More similar topics...
Why Did TWA Wait So Long To Order The 757? posted Wed Mar 7 2012 14:20:03 by MaddogJT8D
Why Did Airbus Wait So Long To Build A Narrowbody? posted Tue Jul 29 2003 20:48:00 by IslandHopper
IAH-Hawaii, Why Did It Take So Long? posted Sat Jun 19 2010 10:20:32 by thomasphoto60
Delta - Why So Long To Dim Lights On Red Eye? posted Fri May 25 2007 03:31:58 by Gh123
United Premier Card, Why So Long To Deliver posted Mon Feb 26 2007 04:46:39 by HAMAD
Why Will It Take Airbus So Long To EIS The A350 posted Wed Dec 6 2006 22:21:39 by Clickhappy
Why So Long To Clear Us To The Assigned Altitude? posted Thu Nov 16 2006 18:48:32 by Golftango
777-200LR Why So Long To Take To Skys? posted Sat Sep 9 2006 16:35:38 by Joffie
Why So Long To Get Into Skyteam? posted Fri Mar 31 2006 23:15:15 by RobertS975
Why Did AA Give Up ORD - FRA? posted Tue Sep 4 2012 22:19:48 by usa4624