Based on the narrown body fleet as of EOY16

NB = 787
SRJs = 276 (E40/45, CR2 & CR7 with 65 seats or less)
LRJs = 296 (E75, CR9 & CR7 with 66 seats or more)

Based on a the APA Scope clause, AA can operate an RJ fleet equivalanet to 75% the size of the mainline NB fleet. So based on the EOY16 NB fleet, AA can operate 590 RJs, the EOY estimate is 572. In 2017 we will see CR2 parked and 12 additional E75 and 15+ CR7 deliveries. AA can operate the equivalent to 40% the size of the NB fleet as LRJs, based on the NB fleet at EOY16 this is a cap of 315 LRJs and AA will have 296 by EOY16.

AA is nearly against the limit for total RJs and LRJs, what will happen is that some of the CR7 that are coming online will be configured with 65 seats as not to take away room required for the remainder of the E75 deliveries taking place in the first half of 2017. After all of the CR7 and E75 are in service with those heading to DFW likely being configured at 65 seats, AA will have around 60 CR7 that will be configured as LRJs and if AA desires can be reconfigured in order to deliver the equivalent number of E75/CR9. However, as this happens an E40/45 or CR2 will have to be parked to make room under the total RJ cap.

With regards to flow, AA has projected over 750 new hires for FY17. Currently we are 40 pilots above the 50% threashold and minimum requirement for when AA has hired 1648 pilots (824). If AA is to hire evenly across the first eleven months we would see 68 pilots hired per month, if metered to 30 we would fall below 50% by May. Understanding how airlines normally do hiring, we know that they slow down during summer months and holiday season, with the current hiring estimates we will the 824 agreement finish in the 3rd QT of 2017. Since AA is likely to hire a significant number of pilots in the 1st QT and first part of 2QT, we are seeing a scenario that AA sends more than 30 per month in order to reach the 50% threashold at the end of the 824. So the whole 40 per month discussion isn't because of new hires coming in, yes they are required if the carrier doesn't want to shrink drastically... it isn't because they want to change the culture... it's because the agreement requires that when AA reaches 1648 new hires, 824 of them are from Envoy via the flow. With AA likely hiring 80+ per month over the next 6 months, they have to send more than the metering number in order to achieve the 50% in agreagate.

*I ran these Scope numbers on my phone as I typed, I will review them for 100% accuracy but should be correct and give you an idea of what AA is doing. They are maxing their RJ fleet, parking 50 seat RJs as they take delivery of over 66 seat RJs, as they take 76 seat RJs and achieve the limit they will reconfigure the CR7 to 65 seats as to allowed them to field more 76 seat RJs.

As far as Network, they are having SKW pick most of the large RJ feed in ORDwith their 70 seat CR7, the CR7 ASA is deploying in DFW will be 1:1 replacement for the CR2 on paper and Scope implications however they will allow AA to add 15 seats per frame. As I have illustrated above,AA has the ability to easily adjust the fleet and execute upon ⅔ of the 90 E75 options. There is also a number of CR9 at Mesa that will come off CPA in the near future and these could allow for the remainder options to be exercised. Will the economical environment present itself and AA have the desire to do so is the real question here.

One thing not to forget is that has been seeking to increase the Small RJ scope limit to 70 seats, this not only would allow them to operate all those CR7 and 70 seats with the same Scooe footprint of a 50 seater but will open the door for the MRJ70, and aircraft that at 70 seats fits under the MTOW allowed under SCOPE with a lower operating cost than the CR7. AA is falling behind Delta and United under compensation, they will see to increase it and I presume AA management will want SCOPE in return.