American Airlines May Ditch A350 Order, Slows New Aircraft Growth

Thursday morning’s American Airlines earnings release and investor call brought a slew of news — from management hinting at higher airfare to come to details about AA economy getting worse. In addition, there were also some interesting updates about American Airlines’ fleet. Here’s what they are and what it means for flyers:

Uncertain Future for the A350 Order

If things went according to the original US Airways order, American Airlines would already be flying a small fleet of Airbus A350s. Instead, in 2016, the airline deferred the first deliveries from spring 2017 to late 2018. Then, in April 2017, the airline delayed the initial deliveries two more years to late 2020.

In Thursday morning’s detailed fleet forecast, the initial A350 deliveries showed up on the schedule for 2020. That indicates that the airline still expects to have two of the 22-aircraft order in its fleet by the end of 2020. But, based on the deferrals so far, we’ve learned to be skeptical that these plans will materialize.

American Airlines management didn’t soothe those suspicions in its earnings call. When asked about the A350, Chief Financial Officer Derek Kerr made it seem like keeping the order for the 300-seat Airbuses was just one of the options the airline had, rather than a firm order on the books. To fill a need in its long-haul fleet, AA’s “options are to take the A350, turn that into an A330-900, or another option is to take the 787-9.”

While the airline could likely work with Airbus to convert its A350 order into A330-900s — which are about the same size, but with less range —  switching to the 787-9 would mean cancelling its A350 order or a more drastic conversion to single-aisle aircraft.

At this point, I’d be surprised if AA ends up taking delivery of an Airbus A350. American reportedly has 52 different aircraft arrangements and it has plans to reduce this number to 30 by “harmonizing” its fleet. A completely new aircraft type would certainly not help simplify its fleet.

Reduction in New Aircraft

Another big shift is American Airlines’ cutback on new aircraft deliveries starting in 2018. From 2014 to 2017, the airline averaged 97 new aircraft per year. In 2018, the fleet plan includes just 65 new aircraft — 22 mainline and 43 regional aircraft. (In the earnings call Thursday, Kerr seems to have misspoken when he referenced plans to add just 22 mainline and 5 regional aircraft.)

Retiring Old Aircraft Types

As mentioned above, American Airlines operates 52 different interior arrangements across 23 different aircraft types. As part of its efforts to simplify its fleet, the airline plans on completely retiring some older aircraft types over the next few years.

First to go will be the 14 regional Dash-8s, which will all be retired in 2018. In 2019, American Airlines will finish phasing out its McDonnell Douglas MD-80s (19 retirements in 2018, 26 in 2019) and Embraer E-190s (all 20 to be retired in 2019).

Finally, in 2020, American will retire all nine of its current Airbus A330-300 aircraft, while maintaining its 15 retrofit A330-200s through at least the end of 2020.

Only a Few More Dreamliners Coming

After taking delivery of its first Boeing 787 Dreamliner in January 2015, American has averaged nearly one new 787 per month. As of the end of 2017, it has 34 in the fleet, including 20 787-8s and 14 Boeing 787-9s, factory-installed with premium economy. These are the planes that get my vote for the best business class seat in the fleet.

But there aren’t many more left on the order book. As of Thursday’s report, just eight more Dreamliners are expected to join American Airlines’ fleet. Six of those will be delivered in 2018 with two more in 2019. All eight of these will be 787-9s, bringing the total to 20 Boeing 787-8s and 22 Boeing 787-9s.

No Plans to Scrap Ancient 767s

If you’ve flown on American Airlines’ 767s, you’re aware of just how bad they are. In economy, there’s no personal in-flight entertainment and no standard power plugs either. Instead, only some seats have DC power plugs, and entertainment is via a few overhead screens.

That’s bearable for a short flight, but American Airlines flies these aircraft between the US mainland and Europe, South America and Hawaii. That’s a long flight for no power and limited, shared entertainment.

Even in business class, there’s no built-in entertainment. American Airlines recently retrofit these business class cabins, installing lie-flat business class seats. However, it passed on the cost of installing in-flight entertainment screens, justifying that it’s phasing out these aircraft soon.

Turns out, the 767s aren’t going away anytime soon. As of the fleet plan released Thursday, American Airlines plans on keeping all 20 in its fleet until at least the end of 2020.

More 737 MAX Are Coming

In 2018, the world’s largest airline is taking delivery of 22 new mainline aircraft. Six of these are the aforementioned Dreamliners. The rest are the already-infamous Boeing 737 MAX.

Despite traveler and flight attendant complaints, the airline isn’t reconsidering its plans to install 172 seats — with less pitch than Ryanair has on its 737 MAX — tiny bathrooms and no in-flight entertainment screens. The airline has firm orders for 100 of these, with 20 by the end of 2018, and taking delivery of 20 more per year from 2019 to 2022.

Entire Fleet Plan

If you’re like me and love to dive into the numbers, here’s the current state of American Airlines’ fleet at the end of 2017 and the plan for the fleet at the end of 2018, 2019 and 2020:

And the regional fleet:

Featured image courtesy of Airbus

The best beginner points and miles card out there.

Chase Sapphire Preferred® Card

With great travel benefits, 2x points on travel & dining and a 50,000 point sign up bonus, the Chase Sapphire Preferred is a great card for those looking to get into the points and miles game. Here are the top 5 reasons it should be in your wallet, or read our definitive review for more details.

Apply Now

More Things to Know

• Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $625 toward travel when you redeem through Chase Ultimate Rewards®
• Chase Sapphire Preferred named "Best Credit Card for Flexible Travel Redemption" - Kiplinger's Personal Finance, June 2018
• 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
• No foreign transaction fees
• 1:1 point transfer to leading airline and hotel loyalty programs
• Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 50,000 points are worth $625 toward travel
• No blackout dates or travel restrictions - as long as there's a seat on the flight, you can book it through Chase Ultimate Rewards

Intro APR on Purchases

N/A

Regular APR

17.99% - 24.99% Variable

Annual Fee

$0 Intro for the First Year, then $95

Balance Transfer Fee

Either $5 or 5% of the amount of each transfer, whichever is greater.

Recommended Credit

Excellent Credit