FLEET REALLOCATION

Tim Smith

Tim Smith: [Our] first goal is to replace aging, fuel inefficient aircraft that also have less than sterling interiors.  We’ve also got options on top of the 460 [current] orders, [which could enable us to grow our fleet] if the industry and economic conditions warrant it. Obviously we’d prefer to have some growth but we aren’t at the point where we can make that commitment. Right now [the goal is] to modernize the entire narrow-body fleet within five years, which is pretty quick by industry standards.

JS: Is there a phase-out schedule for what’s going to be retired? 

TS: The priority is clearly the MD-80s. We’ve already retired between 55 and 60 of them, and we’re still flying about 214 right now. So clearly that aircraft, both from an age standpoint and from a maintenance and fuel standpoint, is a priority. I mentioned the 767-200s are in that mix, maybe a little farther down. The 757s are not as old but they’re getting about 17 years average.

JS:  I presume the 767-200s aren’t being replaced by single-aisle aircraft, but perhaps the 787?

TS: We’re not sure of that.  The 767-200s are much older than the 767-300s that we fly. They average 24 years old.  Numerically, not weighted by number of aircraft, average age [of the 767-200 type] on a statistical basis is the oldest in our fleet, even older than the MD-80s, which are in the high teens right now.  If we wanted to continue with wide-body, we could use the 767-300 or we could conceivably use the 787 once you got a whole bunch of them in the fleet.  I know they’re not the favorites, but we do some routes with the 757s in two-class configuration as well.  I wouldn’t be surprised to see some kind of domino [effect]: as we get some of these new aircraft into the international missions it might free up some 767-300s to perhaps take over [transcontinental flights]. But that’s not a firm decision by any means.  We’re not saying that we’re going to fly a bunch of 737s or Airbus A321s on the transcons.  We’re just saying it opens some new possibilities for those aircraft.

JS: So this gives American a tabula rasa that allows you to rethink how to deploy your fleet. 

TS: Yes, it gives us flexibility as to which markets we serve with which aircraft.  There are also significant benefits to customers in terms of amenities [as well as to the airline].  [It’s important to recognize that] all of these aircraft families have common cockpits, common maintenance, and common basic engine types with minor differences. So there’s a lot of cost-savings here. We mentioned fuel economy and anything about fuel economy also means [a reduced] environmental footprint, which we’re very committed to.

JS: So has there been any thought that possibly the 787 deliveries might be accelerated?

TS: I don’t know if that’s possible given the fact that we’ve [seen] multiple delays [from Boeing].  In fact, our first 787s [were originally scheduled] for 2012.  But in the meantime we have the 777-300ERs coming in.  We’re now up to 8 firm orders on those.

JS: When do the 777-300ERs start to arrive?

TS: All 8 are set for 2012 and 2013. We still have seven 777-200 deliveries for 2013 through 2016 that are on the books. Now, whether those might be changed to 300s, I don’t know.

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