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Originally Posted by MD-11Loader
(Post 2758349)
The question is whether AA can afford to play copycat and fall further behind an already expanding revenue gap between DL and UA.
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Originally Posted by RawHide
(Post 2758763)
The issue here is United’s scope clause is different than Americans. At United a 700 is equal to a 175 so they are parking 700s to get new 175s. Now they figured out a way to reconfigure them into 50 seaters that some bean counter thinks will make a profit.
AA scope is 50-65 seats is a small RJ, hence why PSA, Envoy, and SkyWest already have 63 and 65 seat CRJ700s. |
Originally Posted by ninerdriver
(Post 2758333)
Because:
- The announcement came from left field. - The announcement instantly removed one (maybe two?) regionals from death row and instantly put one (maybe two?) other regionals on it. - AA and DL probably will play copycat. Who knows how that will change the regional playing field? The announcement is a game-changer. Everyone flying for a regional ultimately is playing that same game. We're all taking notice. |
Originally Posted by RawHide
(Post 2758763)
The issue here is United’s scope clause is different than Americans. At United a 700 is equal to a 175 so they are parking 700s to get new 175s. Now they figured out a way to reconfigure them into 50 seaters that some bean counter thinks will make a profit.
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Maybe they'll get the premium dollar that currently faces single class aircraft w/ the competitors into many of these markets.
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This works when oil is cheap, CPASM will go through the roof on these if oil spikes.
If they are filling up all the premium seats with full fare passengers then the above may be a moot point. -Keep the dirty side down |
Originally Posted by 3GreenKSNA
(Post 2758928)
This works when oil is cheap, CPASM will go through the roof on these if oil spikes.
If they are filling up all the premium seats with full fare passengers then the above may be a moot point. -Keep the dirty side down That being said, although seating density is the best way to minimize CASM, it is often not the best way to maximize RASM, and the real gold standard of profitability...RESM. Why do you think AA flys around a 77W with 304 seats in a tube that can easily fit 546? From an outsider, the business case of the CRJ-550, is as follows: Attract consultants whom are buying near full fare flexible economy tickets, (whom are elite tier upgradeable) to UA, thus maximizing aircraft RASM/RESM. Additionally, I bet the analysis showed that the marginal revenue upside of flying the same CRJ7 tube with 65 seats vs. 50 seats was not worth the lost opportunity being able to add E175s elsewhere in the system. At the end of the day, system profitability is more important than route profitability. Overall I think this is a very clever strategy, but one I don’t see AA following in the short term. |
Originally Posted by pitchattitude
(Post 2758414)
It sounds like it is NOT a new type as it has commonality with the others. But it sounds like these are new purchase aircraft. They may be a change of 700s that we’re already on order. Whether or not any others get reconfigured is yet to be seen.
And for what it’s worth, when RW was talking about getting rid of the CRJs, he said AA was looking for a new 50 seater, but there was nothing out there unless Bombardier did something else with the CRJ. Maybe he was speculating, maybe he knew something. https://www.bloombergquint.com/business/united-air-plans-upgrade-of-regional-jets-in-luxury-travel-push#gs.PJde4QPF (Bloomberg) -- United Continental Holdings Inc. is revamping some of its regional jets to add more first-class seats and amenities as part of a wider push to attract more business travelers. The airline’s remodeled short-haul aircraft, dubbed the CRJ550, will be an adaptation of a plane made by Bombardier Inc. that typically flies with 70 seats. That’s 20 more than in United’s new configuration. From ALPA Daily. And specifically say remodel and revamp, so not new airframes, but not to say you couldn’t get a new one in the configuration. |
Originally Posted by FlyPurdue
(Post 2759021)
This website is blowing up with CRJ-550 (and don’t come to Atlas threads). Having spent 5 years in commercial planning at AA, I think it is worth mentioning that nothing in this industry gets approved without mountains of data, scenarios, models, stress tests, and other department stakeholders poking holes in your strategy to find ways to make your analysis even more conservative.
That being said, although seating density is the best way to minimize CASM, it is often not the best way to maximize RASM, and the real gold standard of profitability...RESM. Why do you think AA flys around a 77W with 304 seats in a tube that can easily fit 546? From an outsider, the business case of the CRJ-550, is as follows: Attract consultants whom are buying near full fare flexible economy tickets, (whom are elite tier upgradeable) to UA, thus maximizing aircraft RASM/RESM. Additionally, I bet the analysis showed that the marginal revenue upside of flying the same CRJ7 tube with 65 seats vs. 50 seats was not worth the lost opportunity being able to add E175s elsewhere in the system. At the end of the day, system profitability is more important than route profitability. Overall I think this is a very clever strategy, but one I don’t see AA following in the short term. Like he said, contrary to what we might think at our operational level, there isn’t a single decision that isn’t made without money on a spreadsheet to back it up. Someone at the Willis Tower has already demonstrated the revenue upside to this configuration. It’s probably also a partial admission by Kirby that he’s not going to get scope concessions anytime soon from his pilot group. |
Originally Posted by FlyPurdue
(Post 2759021)
This website is blowing up with CRJ-550 (and don’t come to Atlas threads). Having spent 5 years in commercial planning at AA, I think it is worth mentioning that nothing in this industry gets approved without mountains of data, scenarios, models, stress tests, and other department stakeholders poking holes in your strategy to find ways to make your analysis even more conservative.
That being said, although seating density is the best way to minimize CASM, it is often not the best way to maximize RASM, and the real gold standard of profitability...RESM. Why do you think AA flys around a 77W with 304 seats in a tube that can easily fit 546? From an outsider, the business case of the CRJ-550, is as follows: Attract consultants whom are buying near full fare flexible economy tickets, (whom are elite tier upgradeable) to UA, thus maximizing aircraft RASM/RESM. Additionally, I bet the analysis showed that the marginal revenue upside of flying the same CRJ7 tube with 65 seats vs. 50 seats was not worth the lost opportunity being able to add E175s elsewhere in the system. At the end of the day, system profitability is more important than route profitability. Overall I think this is a very clever strategy, but one I don’t see AA following in the short term. |
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