American Airlines is suspending or delaying Seattle – London and Bangalore, Dallas _ Santiago and Tel Aviv, Miami – Sao Paulo, and Los Angeles – Sydney. They’re blaming delays in the delivery of Boeing 787-8s for this, a result of production and regulatory issues faced by the airframe manufacturer.
They’ll get compensation from Boeing – covering money they’d have made with these planes, and they don’t even need to fly! – but the truth is that the lack of available aircraft is at least as much American’s fault, maybe more so than Boeing’s.
American Airlines has already pulled down its China schedule and dropped Hong Kong flying, along with dropping Edinburgh, Shannon, Dubrovnik and Prague.
Two months ago I explained why American’s lack of planes was their own fault.
It isn’t really true that American ‘doesn’t have’ the widebodies to operate the schedule they’d like. They do have the planes. And [any] lack of aircraft is as much their fault as Boeing’s.
During the pandemic they retired their Boeing 757s and 767s. They retired their Embraer E-190s. And they retired their Airbus A330s. This simplified the fleet. It means they don’t have to train pilots on as many planes, or pay for spare parts on all of these aircraft. But it means they have far fewer planes.
Some of the planes they sold, for instance 767s that now fly for Amazon’s delivery service. American is still paying leases, though, on the Airbus A330s they retired. Pilots are no longer current to fly the planes, but there’d be time to get them ready for summer 2022. American has decided it’s too expensive to return the planes to service.
American didn’t have to retire their A330s. Those could have flown routes they were hoping to use the Boeing 787-8 for, obviating the need to cancel flying with Boeing 787-9s to places like Sydney in order to substitute aircraft. But American chose not to ‘remain ready to fly when customers were ready to return’ even though that was the narrative they offered in exchange for $10 billion in taxpayer cash.
They chose not to spend money, for instance, keeping pilots current and ready to fly the planes. They’ve decided not to bring the planes back from the desert and re-train pilots, either, preferring Boeing compensation over transportation passengers where they’d promised to go.
Schedule changes should run overnight tonight. If you want to book mileage awards (likely at inflated prices) on routes that are being suspended, on the expectation that American will reaccommodate you (e.g. if you want to fly to Australia, and get reaccommodated on Qantas) you’d best book those flights today. If things don’t work out as hoped schedule-wise, awards can be cancelled and mileage redeposited at no cost.
Didn’t AA fly 777s on the LAX-SYD? Why can’t they do that again? Plenty of 777s sitting in the desert ready to be called back to duty.
This makes me wonder if United is getting any compensation for not being able to fly their P&W equipped 777-200. I don’t think they were technically grounded, but voluntarily grounded. While there was some schedule impact, Covid allowed United to redirect international route planes to domestic routes. The 777-200 are coming back in time for summer tourism, but they still need business travel to pick up to keep the planes full the rest of the year.
While I realize it is great sport to bash AA these days, and for many reasons rightfully so, attempting to place blame on AA for the reduction in capacity for retiring the 757/767/A330s is misplaced.
There was precious little demand for international travel during the pandemic. They didn’t need those aircraft and, being older aircraft, they would require additional–expensive–maintenance and higher fuel costs.
AA was contractually entitled to new aircraft to use on these routes. It is not AA’s fault the aircraft were not delivered by Boeing. It is Boeing’s fault. Full stop.
Had Boeing complied with its contractual obligations, AA wouldn’t be facing these problems.
Why would AA put the A330s back in service? They are being paid for those routes without flying them.
Weird science…..
@1KBrad – United, for instance, made a strategic choice not to retire planes, taking a wait and see approach, suggesting there wasn’t much benefit to giving up on the aircraft versus leaving them parked and deciding later. The 767s, sure, there was market demand for those. The A330s are still parked, and American *is still paying for them*.
1KBrad is correct – American made plans based on Boeing’s promise, it’s not up to American to incur unprofitable expenses just to keep a schedule flying – and they’ll be compensated by Boeing for Boeing’s failure to perform. I’m sure they’ve looked at the pluses and minuses of bringing back aircraft, recertifying, maintenance, etc vs. not flying the schedule. They have all the costs and revenue numbers in front of them, we don’t. Sometimes it’s a judgment call, but sometimes the numbers are pretty clear, it just doesn’t make sense financially to do what you want in a particular situation. Sure, it’s easy to hindsight it, it’s a lot more difficult to know what to do in real time.
It’s always easy to spot the amateurs – they’re always the ones to say, “Well, I would have done X!”. To which I reply, if you would have made all those smart decisions, why are just a keyboard warrior and not in the C suite or on Wall Street, making beaucoup bucks for all your clairvoyance?
Surely promoting the replacement of older equipment that burn mire fuel and are worse for the environment is a good thing. Have to say there is a notable personal preference for ceryaim characters is evident in many posts here.
@Gary: I don’t believe UA had planes on order that it planned to use to replace those that were retired during the pandemic.
While AA is paying lease fees for the A330s, they are not paying for maintenance and fuel bills.
And AA is being paid for the routes anyway so it makes no sense to bring them back at this point.
Cheers!
Yet AA has added their 34th destination to Austin since 2021. So they can grow if they want to.
I’m surprised they are still operating their very inefficient flights from JFK to Delhi launched last November that takes 2 hours longer each way than United or Air India on same route due to not having permission to overfly russian airspace (& probably not a great time to now ask for the permission!)
Didn’t American just change their contract of carriage terms to say they don’t actually have to get you to your destination? I could totally see them cancelling any award tickets and refunding the miles, rather than accommodating passengers to Qantas or another carrier which would be more costly for them. They don’t care about passengers anymore, it’s all about the $$$.
And option three, as much as some want to avoid mentioning it, was to aggressively retire less fuel efficient widebodies – in Delta’s case their 18 777s – and replace them w/ more fuel efficient aircraft – both new and used – that ARE being delivered.
Delta now has by far the most fuel efficient international fleet among US airlines and that is due to fully replacing all of its 777 capacity and then some.
The 777 whether as the -200 or -300 is the most fuel inefficient aircraft. American is absolutely right to not try to start a bunch of routes and substitute 777s that burn 30% more fuel per seat than their B787-9s or Delta’s A330-900s or A350s. At $2.50/gallon for jet fuel and climbing as Russia invades the Ukraine, there are a whole lot of routes that don’t make economic sense.
American might be short of international capacity if international demand was strong and fuel prices supported aggressively flying their entire international fleet but neither are true right now. United is the carrier that is taking enormous international risk which will cost them a half billion dollars more in costs than Delta which has the aircraft and the low fuel efficiency to make money when international demand and appropriate costs are aligned.
In hindsight maybe AA made a mistake cancelling their A350’s.
One downside to bringing back the A330’s temporarily is that they don’t offer Premium Economy cabins. On the other hand the 2-4-2 configuration in coach is more comfortable than most other widebodies.
American Airlines is so wrong! They should see thAAt this is AAn enhAAncement!
Have a heart attack? That’s an enhAAncement!
House flooded? AAnother enhAAncement!
One model of A330 (200 or 300) had an average age of 13 years when sent to the desert. Maybe the “experts” here care to do the math on continue paying for mid life aircraft sent to the desert while spending on more costly 787’s & 777 to fly low yield domestic routes.( nyc-Florida, etc)
@Bill in Ohio: The widebodies are only flying domestic routes because there is little international demand at present and the pilots have to be kept current.
Within the next few months, as international travel resumes, the only domestic widebody route will be MIA-LAX.
Gary,
Do you have some particular intel on the AA/Boeing contracts for sale of the 787’s? Rather than the default remedy of lost use, I would anticipate that the contract provides for liquidated damages in the form of $X per day of late delivery. Such liquidated damages provisions relieve both parties from going down the complex rabbit hole of proving/defending actuals. And they are often provide terribly inadequate compensation.
American has planes, and if not mistaken they even deferred deliveries until 4quarter of 22 for 787s just easier to balmer Boeing but I could be off a little.
The real reason is unlike Delta and United people aren’t coming back to fly AA and their crappy product.
People going to Europe and places where people with triple digit incomes and IQs go wouldn’t want to fly on that 3rd world airline like AA.
AA is a dying airline.
My AA flight SYD – LAX on Apr. 22 is still showing in my reservation. Should I expect it will be cancelled at some point before my Apr. 9 departure to SYD on another airline?
This Boeing-AA “issue” seems to be a lot of hot air over very little. If the media reports I read our correct, there is a sum total of three 787s that Boeing promised to American that will not be delivered this year. AA seems happy to take Boeing’s money for this modest snafu. Meanwhile, AA seems to have adequate aircraft to fly to places where there is actual demand. Like I’m not seeing a great need for AA to rush back to Sydney. Do you? The other delayed routes can best be described as “experimental” Personally, I think AA along with DL and UA are poised to make a lot of money on their widebody aircraft later this year as international demand returns, perhaps stronger than ever in the rear cabin given pent-up demand..
Monday morning quarterback from people who.nothing about running an airline..
I agree that this is absolutely self-inflicted on the part of AA. Whacking almost their entire widebody fleet, thereby introducing outsize business risk for the critical recovery phase and foregoing tons of business opportunities. Not just that, but mission-irreplaceable 757s and 767s. Unbelievable.
If you own stock in the AAL shipwreck, sell now. In addition to the current fiasco, Chapter 11 in 18 months will be needed to address AA structural cost disadvantages vs. DL and UA because AA took too many labor concession shortcuts in order to expedite the merger with US Air.
UA will be the best airline equipped to seize the opportunities forward – fully preserved long-haul fleet, strongest hubs, best loyalty program, and biggest alliance network.
This is interesting combined with low air travel at the moment I can see how dropping routes would make sense especially if ties to federal funds were no longer in place. I just did a Seattle to Heathrow trip and I was surprised that Americans 47 777-200ER’s were all over 20 years old. Also, out of 279 seats I think there were approximately 30 passengers on the outbound and Inbound flight. We were at a one flight attendant to 3 passenger ratio!
American is the worst for customer service and now games discontinuing flights.
Misusing government funds while laying off pilots, flight attendants, and other workers. I’ve been an American AAdvantage member since 1989. I have a million miles to use and I can’t find award flights to the most basic European cities.
As soon as my miles are used, I’m moving to Delta. They still know how to run an airline AND have excellent customer service.
American deserves all the bad press they get
So So sad
As I wont be able to give them 475k for a one way in business class seat and still not be entitled to use the fist class lounge in Sydney 😉
Quite glad I booked other One World partners!
Would AA have been able to fill the schedule of Boeing hadve fulfilled it’s orders: Yes
End of debate. AA shouldn’t have to keep old inefficient planes running just incase Boeing don’t stick to their commitments. If they had and there’d been subsequent price hikes coz of doing so then you’d now be complaining about that instead.
The fanboy cope for Boeing is cringesome
Makes sense they are partners with Qantas. That’s exactly what Qantas does. Takes taxpayers money and inflates prices especially with frequent flyer points. Flew once with American….never ever again!
There’s nothing disingenuous about this announcement. There’s no lying or pretense. It’s a simple statement of fact. For a blog that labels itself as a “thought leader” this article shows extremely little rational thought, but a lot of knee-jerk emotion and hatred.
This tirade is just like sports fans second-guessing a coach’s play call after the outcome is known. Howard Cosell, a well-known broadcaster of my younger days, used the phrase “20/20 hindsight” to characterize this human tendency. People and companies can only make decisions based on what they know at the time. Did American know Boeing would have serious issues delivering the 787s it ordered a number of years ago? I tend to doubt it.
When did it become a crime to expect an order to be delivered in a timely manner? More to the point, when did it become a crime to adjust to changing circumstances? Apparently, those are crimes to the author.
It’s pretty sad when people rejoice when bad things happen to others. It’s even sadder when those same people are actively pursuing an emotional and irrational vendetta against a company; hoping it gets liquidated, and costing thousands of hard-working people their livelihoods.
“We’ve suspended the sale of all Burgers due to the late delivery of meat from a new supplier” A spokesman said ” It is now more profitable not to run our core business, due to the compensation we are receiving. So we don’t have to satisfy our Consumer demand for the time being. Anyway, who cares about our Customers when we can be more profitable by not selling food to them”.
“Meantime restaurants will be mothballed, further cutting costs whilst adding more profit to our bottom line. We thank our Customers for their patience and once our balance sheet has been repaired we hope to find another innovative way to screw them”.
Gary, as a former AA employee who worked with the fleet, I can tell you retirements of 757 and 767 fleets began long, long (years) before the pandemic started. Pandemic had absolutely nothing to do with those retirements.
@M Jones – I suggest you stick to flipping burgers over writing satire about them.
Nice post M Jones!
CM is jealous.
Oops! Poked the hyena!
I wish that Iran Air and Iraqi Airways maybsteal all Boeing 787-8s and Boeing 787-9s to fly to I trnational routes like USA, Asia, South America and Oceania for all long haul routes from the main base in Tehran, after American cancels all 20 787-8s and 787-9s.
There will be the right solution worked out with the airline regardless of what it is.
Did American Airlines lose your luggage or something? This column has been nothing but AA bashing for months now. It’s diminishing this column’s value. Drop the vendetta.
@C_M Thanks. How do you like your Share Rewards, Dividends, Bonus or Share buy-backs grilled.. rare, medium rare or most likely well done, perhaps? When we next decide to service our Customers, I’m on it.
Why provide service when they can profit for free. The American Way.
Anyone remember Carl Icahn and the end of TWA?
Even if the had the planes…there is a shortage in ground equipment to work them! From what ive been told cargo loaders, LD3, Dollies and cargo flats are in short supply…most of the cargo loaders are 30 yrs OLD! Gate share equipment and management is clueless ..
Mark Basnight
100%. You are on the money.