Re: 747s and American Airlines

From:         h andrew chuang <chuang_hsin@ae.ge.com>
Date:         21 May 93 03:43:57 PDT
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>> I have noticed that American Airlines does not have any 747s. This
>> is surprising for one of the largest airlines in the world. Do they
>> know something that the rest of the airlines do not know?
>
> Difficult as it may be to believe now, the 747 had some fairly rocky
> beginnings.  Besides early technical problems, it was simply too big,
> especially for U.S. domestic-only carriers.

In the U.S. domestic market, flight frequency is very important, and there
is no market large enough to support high-frequency 747 services like
Japan's Tokyo-Osaka and many other short domestic routes which are served
by JAL and All Nippon with their 747SR's.  Other than the Japanese 
services, the Far East is the only market where 747 is regularly and
extensively used for regional services, because the airports there are very
congested.

On those extra long-hual services (e.g., U.S.-Asia and Europe-Asia-
Australia), in order to have "sensible" departure and arrival time and to
meet curfews of different airports, it's almost impossible to offer
multi-frequency services, thus, a high-capacity aircraft is desirable.  For
example, most of the Tokyo-bound flights from the West Coast depart around
noon so that people from around the country can take a morning flight to
the West Coast, make the connection, and arrive in Tokyo in the late
afternoon, and, if necessary, take another flight to other parts of Asia.
That's why the two major US airlines in the Trans-Pacific market, UA and
Northwest, are also the two largest 747 operators in the U.S.  On the other
hand, for the shorter Trans-Atlantic services, there are more possibities
for "sensible" departure times, the smaller twins become very economical
for multi-frequency services.  The twins are also ideal for secondary
markets like Milan, Stockholm in Europe and Charlotte, Pittsburgh in the
U.S.

> United's 1986 acquisition of Pan Am's Pacific Division included 11
> 747SPs, which were supplemented in 1987 by the five ex-American
> 747-100s and two new 747-200s for New York-Tokyo service.  Another
> seven 747-200s (ex-QANTAS) arrived in 1991 for the new U.S.-London
> service, and 747-400s began arriving in 1989.  I believe United now
> has the third largest 747 fleet, after Japan Air Lines and British
> Airways.

As of Dec 31,92, UA has the second largest 747 fleet in the world: it
operates 55 747's (13 -122's, 5 -123's, 2 -222's, 7 -238's, 10 SP21's,
[ ?? Karl said that  there were 11 SP's, my source shows 10 ?? ]
18 -422's) with 27 -400's on order and 30 -400's on option.  BA operates
one less 747 than UA (15 -136's, 18 -236's, and 23 -436's), but BA has
significantly less -400's on order and option, 19 and 15, respectively.
I think the gap will further widen because BA will probably retire its
-100's a lot sooner than UA will.  By the way, the largest 747 operator, 
JAL, operates 81 747's (plus ~5 747's operated by its subsidiaries) with
15 on order and another 34 on option.  [Note: once again, these numbers are
as of 12-31-92, since then both UA and JAL have switched a few 747 orders
to options or 767's.  Also, all the number listed here includes airplanes
being mothballed.]

Here is some more statistics to further support my argument stated at the
beginning: the twelve largest 747 operators account for nearly 60% of the
747's in service, and they are: JAL (81), UA (55), BA (54), Northwest (50),
Air France (45), Singapore (37), Lufthansa (37), All Nippon (33), Qantas
(33), Cathay Pacific (31), Korean (28), and KLM (27).  All 12 airlines have
extensive Trans-Pacific or Europe-Asia-Australia networks or both. Out of
these 12 carriers, the Pacific Rim operators (six of them, Qantas included)
have 243 747's, the European operators (four) have 163, and the US operators
(two) have 105.  Obviously, one can see where the balance falls.  Moreover,
the more significant orders are mostly held by Asian carriers: Singapore
(25 firm and 17 options), Korean (17+11), All Nippon (16+17), and JAL
(15+34).  That's why the Pacific Rim is the major target for the proposed
500-800 passerger aircraft.  (Some of the airlines metioned above have
pretty amazing fleet size if you consider the home market size:  Hong Kong,
home of Cathay Pacific, has six million people, and Singapore has only
2.5 million people.  If the US has the same "number of 747 per capita" as
Singapore has, the US would have ~3500 747's in service, and ~4000 on order
or option.)

>American and Delta were expanding into international carriers at the
>same time as United, of course.  The major difference was that their
>primary emphasis was across the Atlantic rather than the Pacific at
>first.  By this time the ETOPS 767 (and other twins) had made the 747
>unnecessary for most trans-Atlantic service; heavier routes could be
>handled by the DC-10-30 or L-1011-500.  Only recently has either of
>these airlines gained much of a beachhead across the Pacific, and the
>smaller MD-11 now offers them a more appealing aircraft than the 747
>for this service considering their niche markets.

Last year, Delta had an ambitious plan to expand in Asia by establishing a
hub in Taipei.  Supposedly, the plan was postponed to this year.  Now, with
all the cuts among the US airlines, the plan has not even been mentioned
lately.  However, if Delta does really want to be a major player in that
market, Delta will need the 747, eventually.  AA does not seem to be
interested in the Asian market other than Japan.  With its limited
Trans-Pacific services from "secondary" gateways (Dallas and San Jose) and
apparent limited interest in the market, AA is not likely to return to 
flying the 747 any time soon.

Andrew