Airbus has stated pretty much this when the A220 was unveiled this summer. The cost to produce a 321 over 319 is minimal, and they’d rather give a ‘deal’ on the 321’s as it still ensures profitability to Airbus as a whole.

If you look at some of the aviation business propaganda rags, occasionally you’ll discover a gem of an article talking about the dynamics of the 330Neo flagging sales and the anchor that is the A380. Airbus has a winner in the 321Neo, LR and newer (but not yet greenlit) 321XLR. The XLR, if launched, will attempt to preempt the success of the Boeing NMA/797 by being ‘good enough’ and available before the 797’s maiden flight.

All of that basically signals that the 319Neo, while available, will not be sold on the cheap.






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The last, several year old, purchase price on the 319ceo I saw was $44m but that was several years old and also not the NEO. Suffice to say it’s easily over $50m.

Both Delta and jetBlue purchased their C series aircraft for around $20m a copy. It was, if you believe Boeing, below the cost to manufacture the airplane.

 

Oh I believe it. Bombardier was desperate to have it flying for anyone.

I’ve heard nothing but amazing things about the airplane, it’s just that no one trusted Bombardier would be around long enough to service it’s lifecycle costs.

Now with Airbus running the program, I expect sales to get much better.

One thing that may stop AA from buying the A220 is I believe Delta signed an exclusive deal to do all MRO operations in North America. Too bad there’s no money in maintaining aircraft... or putting cargo on them


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Honestly I think managements goal is to keep as little flying from creeping into mainline as possible. There are a ton of markets the 100-120 seat mainline plane would be nice to have but keep in mind the total ramifications of it. Not only pilots, but filtering all the way down to station ops that have contracts that dictate mainline above and below wing personnel.

Delta doesn’t have that issue. They outsource all their ground ops pretty much system wide to DGS (now spun off to get rid of flying benefits) but do use Delta agents above the wing. Also our mtc contract stipulates mainline mechanics as well. Delta...not so much.

There are so many variables that you can’t real compare us to Delta. Just adding another mainline flight might trigger a cost structure that suddenly makes the station unprofitable.

Not that long ago the DC9 didn’t even have 70 seats and was a mainline aircraft. Obviously that ship has sailed but just goes to show you what we've lost. Long term, we will grow ASMs by upgauging seating capacity on mainline planes, example for every AA 737 Doug switches to 172 seats vs premerger 150, we essentially expand by 15% overnight for almost no increase in operating cost.

 

NameUser - 160 seat 737's started coming on line in early 2011 (pre merger, pre BK) if not sooner.

 

Do you think an A220-100 (100 seat) would be contractually settled as a regional plane? I think it would be a Group 1.

Do you think an A220-300 (130 seat) would be contractually settled as either a regional plane or a Group 1 plane? I think it would be a Group 2.

 

He’s saying no matter if it’s group 1 or group 2 if it is operated by mainline it then triggers mainline station personnel as well.

 

Yep that's it. And their contracts get interesting between LAA and LUS on the ground side. For example, going to RDU, Envoy handles certain gates that LAA parks at and mainline US handles the LUS gates. Keep in mind AA has a 777 in RDU. This is part of the contention between the company and ground unions, they basically want to combine the best of LUS contractual staffing requirements with the best of the LAA vacation, days off, etc. It would trigger a huge staffing increase on the mainline ground side pushing Envoy rates of $10/hr to mainline where they start at $18 IIRC. Caught in the middle are the mechanics who can't get away from them and presto, you have instant stalemate.

 

The numbers still work but not as dramatic. Putting 12 additonal seats on a 737 means for every 13 airplanes we had before we now have one free one. Wih 350 airplanes that means we just added 26 to our fleet for the cost of a cabin refurb.

 

Exactly. The company and financial people talk about growth in terms of ASM. Increasing 1/3 of our fleet by 7.5% equates to a system wide ASM increase of approx 2.5%. Pilot pay hours, which is what we care about, went up zip.