American Airlines tries to sell unions on codesharing, bigger regional jets

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By LM Otero, AP

American Airlines will keep increasing its emphasis on international flights and hopes to change how regional jets fit into its fleet.The carrier also will look to add more passenger-sharing "codeshare" deals with U.S. partners, a move AA says will help it funnel more fliers to its lucrative international routes.
Those initiatives are among details AA outlined Monday in a memo to its employees.

The memo – which AA billed as a progress update on the implementation of its business plan to emerge from bankruptcy protection – comes as the company's unions are pressing the bankruptcy court to consider a takeover bid from US Airways.
American insists its turnaround plan is best for the company and its stakeholders.
As part of its turnaround plan, AA appeared to be making a case for loosening "scope clause" restrictions in its pilot contracts. Such clauses restrict the number and size of regional jets that American and its regional affiliates can fly under the AA brand.
"We sometimes fly too many seats at times of day when there is not enough demand to profitably fill them," AA says in its memo to employees Monday.
AA adds: "For example, (at Chicago O'Hare), our competitor United flies mainline jets in the peak demand periods, and then fills in the gaps with larger RJs (regional jets) to better match demand. Since American has limited RJ ability, we often have to fly all mainline aircraft, which means we offer fewer flights per day" and have a difficult time making a profit when forced to fly bigger jets.
AA continues:

Larger RJs have lower per departure costs than our 140-seat MD80s, which enables us to offer a better schedule without increasing capacity, since each larger RJ has far fewer seats than an MD80. And with this superior frequency pattern, American can earn higher yields because we can better schedule flights at times when customers are most willing to pay higher fares.

Another issue raised in the memo is AA's desire to add more codeshare partners.
AA tells employees the company could achieve a "large portion" of $1 billion in "in revenue improvements" it is seeking by "increasing our ability to do certain codesharing domestically, which will allow us to expand the reach of our network."
AA says in its memo "there are cities we simply cannot effectively service because of airport constraints, or because we cannot operate the route profitably on our own. … (New York) JFK is a good example: The airport is slot-constrained, but with certain codeshares, we can increase our presence in New York City and feed customers on our domestic and international flights out of JFK."
Codeshares, however, are often met with trepidation from labor groups, who sometimes argue such deals essentially "outsource" flying to another airline.

Credit : USA Today