American’s Widebody Plans Crystallize with 787 Order, A350 Cancellation

What American would do with its widebody fleet has been top of mind for a whole lot of people lately. In the last couple of weeks, the airline broke off negotiations with Airbus for the A330neo as a replacement for its orphaned A350 order, so it was pretty much a foregone conclusion that the 787 would win the day. Now that (with some options as well), we get a real sense of where American wants its widebody fleet to be. This dovetails nicely with a recent discussion I had with Vasu Raja, VP of Planning for American, about how the airline is using its 787s today.

Let’s start by looking at American’s widebody fleet including orders that existed before this announcement. It’s, um, diverse.

Aircraft Capacity # in Fleet # on Order
767-300ER 209 24
787-8 226 20
A330-200 247 15
777-200ER 273* 47
787-9 285 15 7
A330-300 291 9
A350-900 ? 22
777-300ER 304^ 20

*American has a 260-seat configuration on the 777-200ER as well, but that’s being standardized
^UPDATED: Addition of premium economy has reduced seats from 310 to 304 and retrofit is halfway done

This looks like the fleet of an airline in transition, and really, it is. The Airbus fleet is something of a relic. It comes from US Airways before the merger, and it was really focused on flying East Coast to Europe since that’s almost all of the intercontinental flying that US Airways did. Pre-merger American, however, had a much broader network, but it also had some really old airplanes which needed to go away. (*cough* 767s *cough*)

In this mix, you had a whole bunch of issues that needed to be resolved.

  • The 24 767-300s need to be retired sooner rather than later (or American needs to pour money into them).
  • The 9-strong A330-300 fleet is tiny and has the same capacity as the 787-9, so it was on its way out.
  • The A350 order would have created a small subfleet for a big airline, and it didn’t provide a benefit over the existing 777 fleet, so that needed to be modified.
  • Some of the 777-200s will be getting long in the tooth in the next few years and will need to be replaced.

So, yeah, there’s a lot going on here. With all of that, American had to find a way not only solve these problems but also simplify the fleet. Originally it was thought that American might simply convert its order for the A350 into A330neos, but a couple weeks back American said Airbus was out of the running. That made the 787 the obvious winner, as mentioned, and now we know the details.

  • American will get 22 787-8s starting in 2020 to replace the 24 767-300s
  • American will get 25 787-9s starting in 2023 to replace the 9 A330-300s and some early-model 777-200s
  • American has canceled the A350 order
  • (American will also defer some 737 MAX deliveries, but I’m not dealing with narrowbodies in this post.)

In visual form, this is what the fleet will eventually look like:

Aircraft Capacity # in Fleet
787-8 226 42
A330-200 247 15
777-200ER 273 < 47
787-9 285 47
777-300ER 310 20

In the long, long range you can imagine the A330-200s and 777-200s will go away as well, but there won’t be as much of a hurry to make that happen, because if you think about it, this kind of fleet mix makes a lot of sense. I think of these as falling in three categories:

Small Widebodies
The 787-8s can do a few missions, and this is something I talked about with Vasu when we discussed the new Latin America strategy. First, these airplanes can serve routes with limited demand but decent premium cabin needs. Think of something like Chicago – London which has high frequency and doesn’t need bigger airplanes. I’d imagine this might also show up on something like Philly-Zurich (which is a 767 today). Second, these airplanes are good “range” airplanes. Something like Dallas/Ft Worth – Beijing which needs a lot of legs under it but also isn’t a terribly-large market. That’s how they are mostly deployed today, but now there will be a third role as a 767 replacement.

Today the sexiest thing a 767 does is act as a pathfinder to develop new routes like the new Miami to Cordoba run. But most importantly, it’s a workhorse airplane that provides 1985-levels of service (in coach, at least) to swaths of leisure travelers in thinner markets over the Atlantic (as well as hub-to-hub and some shorter-haul Latin American flying). The 787-8 in the current configuration seems a little premium-heavy for these roles, so I wonder if we may see a more dense subfleet come out of this. Or maybe we’ll see the A330-200 take over more 767 routes while the 787 takes over current A330-200 routes. Either way, the 787 isn’t the perfect airplane to serve these markets, but it’s the best option currently available in American’s eyes. And once it starts coming in the fleet in 2020, those 767s can finally be put out to pasture.

The A330-200, however, is well-suited for Transatlantic flying, even if it’s an older-generation airplane now. Those 7- to 9-hour flights are probably just about ideal for the A330, and like I said, I imagine it’ll step in on some of those 767 routes today that could absorb a little more capacity.

Medium Widebodies
The 787-9 seems to be one of American’s favorite airplanes right now. You get most of the benefit of the 787-8 but with more capacity to drive operating costs down even further. Excluding London and Hong Kong, this airplanes flies all long-haul routes from Los Angeles for American now, for example. It seems to increasingly be the backbone of the Pacific. I imagine we’ll see it stretch into Europe more over time, as well, especially on routes with stronger demand.

The 777-200 may look smaller than the 787-9 in my chart, but that’s because it’s premium-heavy. This airplane has 37 business class seats (vs 30 on the 787-9), 24 premium economy (vs 21), 78 Main Cabin Extra (vs 36), and 134 coach (vs 198). So if American needs more premium capacity, this is the airplane to choose over the 787-9. In the long run, I imagine the 777-200 will go away, but that’s a very long way down the line. Even the early models won’t start going away until the new 787-9s start to show up in 2023.

Big Widebodies
Lastly, we have the 777-300ER all alone at the top. This is the big boy which will go on routes that a) need a lot of seats and b) have a lot of premium demand. After all, this airplane is the only one with first class onboard. It also has a whopping 52 business class seats. Look for it in the usual business spots like London, Sao Paulo, and Hong Kong.

Overall, this seems to solve American’s shorter-term fleet issues, and it creates a coherent fleet plan for the long run, especially with those options ready to be executed.

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