Despite New Aircraft Deliveries, AA Is Keeping Some Older Planes for Longer

Last week, American Airlines released its full 2018 profit -- which met analyst's adjusted expectations but fell 44% short of bold predictions from its CEO. The earnings call with analysts was full of fascinating nuggets, but it was an investor relations update that revealed American Airlines latest plans for its fleet.

Over the past few years, American Airlines has made a substantial investment in purchasing new aircraft and retrofitting existing aircraft -- whether that's installing lie-flat business class seats, installing premium economy in more than 100 widebody aircraft or cramming more seats in economy. Speaking about this investment in the earnings call last week, AA President Robert Isom claims the "$25 billion represents the largest investment of any carrier in the history of commercial aviation in such a short time period."

Now, American Airlines is slowing this investment. Instead of continuing to buy new planes, it's keeping some of its older aircraft longer than before and it's planning to lease used aircraft from the secondary market.

While there's only been incremental changes since the last fleet update, there's been a larger shift when you take a step back and look at the changes in the past year. So, let's take a look at what's changed in AA's fleet plans since this time last year:

Delaying A321neo Deliveries

With the government shutdown over, American Airlines is likely to take delivery of its first Airbus A321neo aircraft any day now -- with inaugural flights scheduled for April 2. Although initial deliveries were always planned for 2019, AA won't be taking delivery of as many new A321neo aircraft in 2019, 2020 and 2021 as expected at this time last year.

In both April 2018 and July 2018, AA shared that it'd deferred A321neo deliveries -- citing a combination of high fuel prices and a lack of a need for the capacity due to its "Project Oasis" densification project.

Deferring 737 MAX Deliveries

As AA phases out older 737-800 aircraft, the airline is planning to replace these with 100 brand new Boeing 737 MAX. Unfortunately for passengers, the new aircraft have 12 more seats, no inflight entertainment screens, less pitch and smaller bathrooms than the aircraft they're replacing. So, it's a bit of relief when American Airlines announced in April that it was deferring 10 deliveries from both 2020 and 2021.

Leasing Used A319s

Early in 2018, word got out that American Airlines was scouring the used aircraft market, looking for Airbus A319s. In July 2018, the airline confirmed that it'd leased eight used A319s -- aircraft previously used by Frontier. At the time, it expected to take delivery of three by the end of 2018, but only ended up getting one. Now, it expects to take delivery of the remaining seven by the end of 2019 and retain all 133 of the 128-seat aircraft through the end of 2021:

An American Airlines spokesperson confirmed that the aircraft will be arranged the same as its other A319s: 128 total seats with 8 first class seats, 24 Main Cabin Extra seats and 96 economy seats. There will be power at every seat, satellite-based Gogo 2Ku Wi-Fi and streaming in-flight entertainment with live TV. There will be no in-flight entertainment screens.

Retaining Airbus A330-300

As part of its decision on whether or not to retrofit aircraft with premium economy, AA bypassed retrofitting its nine A330-300 as the plan was to retire all of these aircraft in 2019. Then in April 2018, AA changed its mind and decided to keep the A330-300s instead of its 767s. Now, with this update, we know AA plans to keep these nine wide-body aircraft through at least the end of 2021.

With this extension, it'll be interesting to see how AA handles these aircraft. AA seems to want to have premium economy cabins on its intercontinental routes, and an AA spokesperson confirmed that these A330-300s will not be retrofit with premium economy. So, perhaps the airline will limit these A330-300s to domestic routes which have enough demand to justify a 291-seat aircraft rather than sending them overseas.

Retaining Older 737-800s A Little Longer

According to AirFleets' tracker, American Airlines has 46 Boeing 737-800 that were delivered in 2001 or earlier. And according to AA's fleet plan from January 2018, it planned to retire 45 Boeing 737-800 aircraft in 2019 and 2020.

Now, these retirements are being delayed. As of the latest update, AA plans to keep all 304 of its 737-800 aircraft in its fleet through the end of 2019 and retire just five in 2020. That means it'll have 40 more 737-800s at the end of 2020 than expected at this time last year.

Retaining E190s One More Year

The smallest aircraft in AA's mainline fleet are its 20 Embraer 190 aircraft. These 99-seat aircraft are the only Embraer aircraft in AA's fleet, and AA is aggressively reducing aircraft subfleets. So, it's no surprise that these are on the chopping block. As of January 2018, AA planned on retiring all 20 in 2019. Now, six of these are scheduled to leave the fleet in 2019 and the remaining 14 in 2020.

Accelerating 757 Retirement

AA currently has 34 Boeing 757 aircraft. 24 of these are in the international fleet, retrofit with lie-flat business class seats. The other 10 of these are fit with domestic first-class recliner seats and designed for domestic and Hawaii flights. And these 10 in the Hawaii fleet are on the chopping block. This time last year, these retirements were scheduled for 2020. Now, these have been accelerated to 2019.

Accelerating 767 Retirement

For those of us that don't care for AA's ancient 767s, we got good news in April 2018: American Airlines will begin to phase these diversion-prone aircraft starting in 2019. Previously, all 24 were scheduled to stay in the fleet through at least the end of 2020. Currently, the plan is to retire 9 of these in 2019, 9 more in 2020 and the final 6 in 2021.

New 787 Dreamliners

One way AA is bucking its general trend of keeping older aircraft longer and deferring new aircraft involves its Dreamliner fleet. In April 2018, AA confirmed a massive order of 47 new Dreamliners. Twelve of these newly-ordered aircraft are scheduled to join the fleet in 2020 with another 10 being added in 2021.

Plans for 2021

The investor update released last week was the first look we've gotten into what the airline plans to do with its fleet in 2021. Here's a quick rundown:

Narrow-body fleet

• Retire 4 aging Airbus A320
• Retire 23 aging Boeing 737-800
• Take delivery of 18 new Airbus A321neo
• Take delivery of 10 new Boeing 737 MAX

By 2021, American Airlines will have at least 33 Airbus A320 and 46 Boeing 737-800 over 20 years old. While older aircraft aren't inherently unsafe, they can lead to increasingly pricey maintenance issues -- as AA is learning the hard way with its aging fleet of Boeing 767s. So, AA plans to start phasing out some older A320s and will continue retiring older 737-800s -- which it'll start doing in 2020.

These narrow-body aircraft will be replaced by brand new Airbus A321neo and Boeing 737 MAX aircraft. While its retiring 27 and taking delivery of 28 aircraft, there will be a large net increase in seats. Between upgrading from smaller A320s to A321s and seat densification on the 737s, AA will add 948 more seats to its narrow-body fleet from these aircraft moves.

Wide-body fleet

• Retire its last 6 Boeing 767-300
• Take delivery of 10 new Boeing 787-8

The capacity-growth via trade-ins will also occur on the wide-body fleet. AA plans to retire its last maintenance-plagued Boeing 767s in 2021 while taking delivery of 10 of its new order of Boeing 787 Dreamliners. This will be a net increase of 1,136 seats on the wide-body fleet.

This trade-in will be a mixed bag for passengers. While the 767s lack power, in-flight entertainment screens and large overhead bins, the 2-3-2 seating arrangement and plush (by today's standards) seats will be missed by others. The 787s have a much denser 3-3-3 seating arrangement but will have premium economy, in-seat power, IFE screens (as of current plans) and other benefits of the 787 Dreamliner.