American Airlines may have to park regional jets as 737 MAX grounding drags on
This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.
The Boeing 737 MAX grounding has forced American Airlines to cut flights and cede passengers to competitors since it began nearly a year ago. Now, the carrier faces a new challenge: having to park some of its American Eagle fleet.
The Fort Worth, Texas-based carrier may be forced to reduce the number of regional jets in the Eagle fleet by June in order to stay in compliance with limits set in its contract with pilots. The reductions will be necessary as the number of smaller jets operated by American’s regional partners has continued to grow even as mainline fleet growth has been hamstrung by the MAX issues.
These limits on the number of regional aircraft are known as “scope clauses.” The clauses are designed to protect the jobs of pilots at major U.S. carriers — such as American, Delta Air Lines and United Airlines — from being outsourced to cheaper regional operators.
“We’ll comply with our agreement with pilots,” American spokeswoman Andrea Koos told TPG. “To do that, we are making minimal regional fleet adjustments, including retiring up to four regional aircraft a few months early.”
The early retirements are understood to be those with fewer than 50 seats, potentially 44-seat Embraer ERJ-140s, and will be removed ahead of a June deadline stipulated by the contract. The early removal would minimize any additional disruption, on top of the MAX, on American’s peak summer schedule.
“We have no signal that they wouldn’t be compliant with scope going forward,” Dennis Tajer, a representative of the Allied Pilots Association that represents pilots at American, told TPG. “Scope is a religious issue for us.”
American’s pilots agreement limits the number of regional jets in the Eagle fleet to 75% of the mainline narrow-body fleet count, according to the contract. The number of large regional jets — those outfitted with 66 to 76 seats — is limited to 40% of the same mainline count.
The carrier operated 768 mainline narrow-body jets at the end of 2019, its latest fleet plan shows. That number would have been around 808 aircraft if the 40 737 MAX 8s that it planned to by flying were not grounded. American also took five fewer Airbus A321neos than planned last year due to industrial issues at the planemaker’s factory in Hamburg, Germany.
At the same time, the Eagle fleet stood at 605 jets, or nearly 79% of the mainline count.
American was not violating its pilots agreement despite the excess regional jets at the end of December. Several factors kept it in compliance, including a force majeure clause that allows the airline to consider jets that it cannot operate due to “conditions beyond the company’s control” as part of its mainline fleet for purposes of scope. This clause applies for up to 15 months, or until June 13 (the MAX was grounded on March 13, 2019).
The mainline carrier may, however, be forced to remove more regional jets if the MAX remains out. Scope compliance is assessed on a regular basis and considers the number of both mainline and regional aircraft over a six-month period, either January-June or July-December, Tajer said.
Not including the MAX, American plans to add 18 Airbus A321neos and one used Airbus A319 to its mainline narrow-body fleet in 2020. On the regional side, it plans to add 10 Bombardier CRJ700s, two Bombardier CRJ900s and 20 Embraer E175s this year.
What flights could be cancelled?
American is unlikely to cancel any feeder flights on its large regional jets, the Bombardier CRJ900s and E175s. These largely operate in markets with demand for both premium and economy products or — in other words — routes that are more financially lucrative for the airline.
Impacted routes will likely be to destinations served with the airline’s smallest jets, the ERJ-140, to minimize disruptions. American operates the most ERJ-140 flights from its Dallas/Fort Worth (DFW) base to cities including Abilene (ABI) and Harlingen (HRL) in Texas, and Gulfport/Biloxi (GPT) in Mississippi, according to Cirium schedules for April.
However, American just expanded its Dallas/Fort Worth hub to more than 900 peak day departures. In expanding the schedule there, American cited the hub’s above-average profitability compared to the rest of its route map. Cutting feeder flights there could have an outsized financial impact on the airline’s bottom line.
A more likely scenario would be cutting flights from a less profitable hub like, for example, New York John F. Kennedy (JFK). JFK had the fourth largest concentration of ERJ-140 departures in American’s system in April, Cirium shows, and the carrier has already trimmed its schedules there citing the MAX grounding.
American operates flights between JFK and Cincinnati (CVG), Montreal (YUL), Nashville (BNA), Norfolk (ORF), Pittsburgh (PIT), Raleigh/Durham (RDU) and Richmond (RIC) — all of which it also serves from nearby New York LaGuardia (LGA) — with ERJ-140s, according to Cirium.
Koos declined to comment on what markets could be impacted by accelerated regional fleet retirements.
“We’re working continuously to manage our fleet until the Boeing 737 MAX is re-certified by the FAA,” she said.
Featured image by DANIEL SLIM/AFP via Getty Images.
Welcome to The Points Guy!
WELCOME OFFER: 80,000 Points
TPG'S BONUS VALUATION*: $1,650
CARD HIGHLIGHTS: 2X points on all travel and dining, points transferrable to over a dozen travel partners
*Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.
- Earn 80,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $1,000 when you redeem through Chase Ultimate Rewards®. Plus earn up to $50 in statement credits towards grocery store purchases within your first year of account opening.
- Earn 2X points on dining including eligible delivery services, takeout and dining out and travel. Plus, earn 1 point per dollar spent on all other purchases.
- Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards®. For example, 80,000 points are worth $1,000 toward travel.
- With Pay Yourself Back℠, your points are worth 25% more during the current offer when you redeem them for statement credits against existing purchases in select, rotating categories.
- Get unlimited deliveries with a $0 delivery fee and reduced service fees on eligible orders over $12 for a minimum of one year with DashPass, DoorDash's subscription service. Activate by 12/31/21.
- Count on Trip Cancellation/Interruption Insurance, Auto Rental Collision Damage Waiver, Lost Luggage Insurance and more.
- Get up to $60 back on an eligible Peloton Digital or All-Access Membership through 12/31/2021, and get full access to their workout library through the Peloton app, including cardio, running, strength, yoga, and more. Take classes using a phone, tablet, or TV. No fitness equipment is required.