I talked about American’s retiring of Boeing 767s while they order more expensive Boeing 787s. They aren’t even utilizing the 787s well today, sending them to Cancun and Anchorage.
At this month’s Crew News employee question and answer session with American Airlines CEO Doug Parker, a 787 first officer asked about how they’re using widebodies – suggesting they didn’t buy these planes to fly Las Vegas turns.
American’s Vice President of Planning Vasu Raja said they have too many widebodies today but as soon as their joint venture with Qantas is approved they’ll be able to grow into them — taking a couple of planes that fly to Europe in the summer and using them on South Pacific routes in the winter starting in late 2019.
There’s always going to be some amount of seasonal flying because the reality is that especially with the widebodies the margin difference between flying Europe in the summer and flying Europe in the winter can be as much as 20 to 30 points. Those widebodies are expensive planes and we’ve got to move them to where they make the most money.
Now that said though what we want to do with the widebody in buying it is we didn’t buy a widebody to fly a domestic trip we bought it to fly long haul. In 2018 and early 2019 we’re kind of in a unique place. Part of it is that we cancelled some Chicago to China routes but the bigger part of it is that at this point in time we anticipated that we would have approval of our Qantas joint venture and some of those widebodies that you see flying domestic would otherwise be flying in the South Pacific.
So over the long run what we actually anticipate doing is growing into the widebody fleet count that we have where in the summer you probably will see us flying a lot more long haul trips transatlantic and in the winter you’ll probably see us flying a couple of those planes in South Pacific too.
The real key thing for us is approval of the Qantas JV, which I imagine people will ask then when does that get approved? We’re optimistic that will get approved in the next few months should that be the case we’re looking forward to starting service as soon as we can in 2019, likely in the winter time.
By the way this suggests that when we get estimates from the airline on how much they’re losing as a result of the government shutdown (American after all has a hub in DC), the number really ought to include the delay in approval of the joint venture with Qantas and the resulting underutilization of expensive assets like Boeing 787s.