When will AA replace its MD-80s?.
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Member of: QF Silver at last - no more useless Bronze
Posts: 365
Re: When will AA replace its MD-80s?
You'd think it would make sense to porgressively switch to the 737NG series, then in time switch to a newer airframe. Since they already operate so many 737s, there'd be some cost savings in that alone, plus as the article mentions, it is signifiantly cheaper per seat mile anyway. I think the lead time on the next generation narrow body aircraft is too long if they;ve got 25 year old jets flying around.
Alternatively, they'll need to go to boeing and demand they bild it, with a start oder of 100 airframes minimum. But boeing's resources are under the pump with 787 currently.
Also, looks like AA arent the only one in that boat..........and QF arent far behind either.
Member of: AA Exec Plat; QF LTG; PC Plat; HHonors Gold
Posts: 9,850
Re: When will AA replace its MD-80s?
Quote:
Originally Posted by docjames
You'd think it would make sense to porgressively switch to the 737NG series, then in time switch to a newer airframe. Since they already operate so many 737s, there'd be some cost savings in that alone, plus as the article mentions, it is signifiantly cheaper per seat mile anyway. I think the lead time on the next generation narrow body aircraft is too long if they;ve got 25 year old jets flying around.
The concern from AA's perspective is that if they invest in more 737NG aircraft now, they will be left operating them for the next 20 years. And when Mr Boeing or Mr Airbus eventually deliver a new generation narrow body aircraft with a further 20% operating cost reduction, they may be left competing unfavourably against other operators who have a large fleet of such aircraft.
So its a difficult situation to stuck in - buy now and be uncompetitive later, or delay the purchase and continue to operate the older MD80 for another 8-12 years.
Quote:
Originally Posted by docjames
Alternatively, they'll need to go to boeing and demand they bild it, with a start oder of 100 airframes minimum. But boeing's resources are under the pump with 787 currently.
Neither manufacturer is in a position to build their next generation narrow body aircraft at the moment. All their engineering resources and investments are tied up in the 787 and A350 development. And they need to wait for the next generation of engines, such as the new geared turbo fan, to deliver the full efficiency savings. Neither Boeing nor Airbus is going to build too early and have the other come in two years later with an even bigger efficiency saving by waiting for the next technology cycle.
Member of: QF Silver at last - no more useless Bronze
Posts: 365
Re: When will AA replace its MD-80s?
I just think that 8-12 or more years on 25 year old airframes will be problematical, not just on cost, but more on reliability, cancellations etc.
Alternatively do a lease deal on the 737NG. Then the lease company will carry it in the longer term, you just pay more upfront. Hopefully offest by the fuel economy gains by switching to the newer aircraft.
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Member of: AA Exec Plat; QF LTG; PC Plat; HHonors Gold
Posts: 9,850
Re: When will AA replace its MD-80s?
Quote:
Originally Posted by docjames
I just think that 8-12 or more years on 25 year old airframes will be problematical, not just on cost, but more on reliability, cancellations etc.
Indeed it is all part of the equation.
Quote:
Originally Posted by docjames
Alternatively do a lease deal on the 737NG. Then the lease company will carry it in the longer term, you just pay more upfront. Hopefully offest by the fuel economy gains by switching to the newer aircraft.
I expect the AA bean counters have run lots of models to determine the best approach. Also need to consider their ability to fund a large leasing program and how that would affect their current cash-flow situation having recently fought off bankruptcy.
Also, looks like AA arent the only one in that boat..........and QF arent far behind either.
I actually thing QF are ok, they have orders for many more B737's, A320's, B787's, A380's.
So they have a huge number of airframes on the order book, ie they have production slots for B737's, as the artical stated it could still be almost 5 years before the next production slow is available if current production rates continue.
All i can think is that it will be an interesting time for the American airlines (meaning not just AA, all of them) and they may have some short term pain yet to come. When you start talking a fuel cost difference of $20 a seat on the example they gave i would have thought it would have been worth investing in new A/C ASAP.
I guess the real issue for AA is that if they could get the planes today it may be a different story but after 2009 they would need to wait until 2013 for next production slots, by they a new aircraft should be close.
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