American Airlines is pushing ahead with retrofits on parked aircraft. In an April 30th earnings call, executives indicated that the airline had budgeted and planned for additional fleet simplification by reconfiguring 737-800s and A321s into a standardized, denser configuration.
Full steam ahead on 737 and A321 changes
With domestic capacity at some of their lowest levels in recent history, American is making use of the time its Boeing 737 and Airbus A321 aircraft are on the ground by continuing retrofits of the planes. Both aircraft are undergoing a cabin densification project that has been unpopular with passengers.
While other airlines are working to limit expenditures by pausing some investments, American has budgeted for these retrofits and views this as a long-term cost-cutting measure. For the next few months, the airline has budgeted hundreds of millions of dollars to retrofit the narrowbody aircraft. Of the $1.1 billion in capital expenditures, 40% of that will fund the retrofits. This is about $440 million.
What are the changes?
Older Airbus A321s are being retrofitted to a 190-seat configuration. Previously, these aircraft either had 181 or 187 seats. 20 of these seats are in recliner-style First with a 2-2 configuration. Then, there are 29 Main Cabin Extra seats followed by 141 Main Cabin seats. These aircraft lack seatback screens, but will at least be equipped with wifi. However, this upgrade will give passengers in-seat power outlets as well as more room in overhead bins.
The Boeing 737-800s are also getting denser, moving up to a 172-seat configuration to match the MAX. Previously, these aircraft were equipped with 160 seats. On the retrofitted aircraft, there are 16 recliner-style First Class seats and 30 Main Cabin Extra seats– the same number as 160-seat 738s. However, Main Cabin gets denser with 126 economy class seats, up from 114. Seat pitch in all cabin classes has been reduced to accommodate these additional seats as has the lavatory width.
Why is American Airlines doing this?
American’s decisionmakers view this as a long-term cost-saving measure. Currently, the airline’s Airbus A321s are in two separate configurations. One configuration is legacy American Airlines while the other is legacy US Airways. Operating two distinct configurations makes the fleet inefficient from an operational aspect. In case of a maintenance or scheduling issue, the airline has to be careful with aircraft substitution.
However, some Boeing 737s may not receive this reconfiguration. American is evaluating retiring some Boeing 737s early– about 42 of these. No decision has been made yet. However, if demand remains low, then expect American to retire those planes.
Most of those planes likely have not been retrofitted yet and, if they do exit the fleet, it will end up saving some cash for the airline. This, however, may also depend on the 737 MAX certification timeline. If the 737 MAX does re-enter service in the summer and Boeing is able to deliver more planes, then American could wave goodbye to those older jets.
Do you think American is making the right move here? Let us know in the comments!