American Airlines confirmed (01-Aug-2013) the commencement of 76-seat Embraer E175 operations on 01-Aug-2013. The aircraft will be operated by Republic Airlines under the American Eagle Airlines brand as part of a 12-year capacity purchase agreement, and will initially be based at Chicago O'Hare. The carrier expects two to three E175 aircraft to enter service per month, reaching the maximum of 47 in 1Q2015. The aircraft are configured with 12 first class, 20 'Main Cabin Extra' and 44 economy seats. American Airlines VP network planning Chuck Schubert said: "For the first time in American Airlines history we are offering large regional jet flying as an option. In addition to strengthening our longstanding partnership with Republic Airways, this is a strong step forward in the diversification of our fleet and an important enhancement from one of our key hubs. It’s also great news for our customers, who will now have even more flight choices and opportunities to travel in the first class cabin." [more - original PR American Airlines] [more - original PR New Orleans Airport]
American Airlines confirms launch of E175 oeprations
You may also be interested in the following articles...
Frontier to celebrate ULCC transition with an IPO: intensity grows in the US competitive landscape
After toying with the idea of engaging in an initial public offering for more than year, the US ULCC Frontier Airlines now intends to go public as its major shareholder, ULCC specialist Indigo Partners, sets its sights on Argentina. Frontier has arrived at and passed many ULCC milestones, including producing unit costs excluding fuel below the USD6 cent benchmark for the ULCC model, placing it on par with its fellow ULCCs Spirit Airlines and Allegiant.
Frontier markets its product differently from other US ULCCs, giving passengers the options to purchase product in a bundled form or a la carte, but it still maintains ultra low fares. However, Frontier couldn’t escape the pricing pressure that permeated the US market in 2016, joining the majority of the country’s airlines in posting distinct yield and unit revenue declines.
Obviously, despite the pricing pressure and changing dynamics in the US market, Frontier remains bullish on the opportunities for ULCCs in the market place, concluding that numerous markets exist for it to operate profitably with low fares.
During the past several years Frontier’s network focus has been somewhat murky. Now Frontier’s network strategy is targeting high fare, underserved routes. And like its rival Spirit, Frontier also singles out medium sized markets that offer some protection from larger competitors.
United Airlines' capacity growth spooks markets: investors react and stock price dives
An upward revision to United’s 2017 capacity guidance has created a minor market panic, fearing that US airline capacity discipline has been abandoned just as pricing in the domestic market was beginning to stabilise. The timing of United’s revised capacity guidance was unfortunate – occurring just days after its rivals American, Delta and Southwest revised 1Q2017 unit revenue guidance downward. United, which initially offered a more conservative forecast, has kept its guidance intact.
The ensuing plunge in United’s stock price is hardly surprising given underlying market fears that domestic capacity could creep up in 2017. In some aspects United, which has been a strict adherent to keeping capacity growth in line with GDP, took markets off guard, stoking fears that the capacity discipline integral to the industry’s turnaround is evaporating.
United’s argument is that the company is engaged in a comprehensive network review, and the changes triggering the capacity growth are ultimately margin accretive. The company and its new management are refreshingly unapologetic for the capacity increase, arguing that it is necessary to regain lost ground in the US domestic market. The logic for that argument is sound, but United finds itself balancing the short term focus of investors with its efforts to close margin gaps with its peers. The big question - will others respond?