AMR Corp yesterday announced that wholly-owned subsidiary American Eagle Airlines will retire its Saab 340B fleet by year-end, and realign its operations at San Juan by transitioning 12 66-seat ATR 72s to Dallas. Here is management’s memo to American Eagle employees (in two parts).
So what does this mean for the venerable Saab turboprop? I went to the only logical source for an answer, Saab Aircraft Leasing (SAL) president and CEO Michael Magnusson.
Since it is not yet clear if Eagle will dispose of the turboprops in the near-term, it is difficult to say what impact it will have on the market. However, says Magnusson: “As long as the phase out is structured the worldwide market should be able to absorb them. Since new 30-seat turboprops are not manufactured anymore there is demand for used aircraft.
“Our Saab 340A Cargo market is doing well and this could be another avenue for some of these aircraft as the supply of good 340As is drying up. We at Saab will obviously do our bit to ensure a smooth transfer of Saab’s to new operators.”
What is Magnusson’s reaction to AMR’s decision? “In many ways I am not surprised, the Saab 340 is the smallest type in the very large Eagle fleet and being just 25 operational aircraft I suspected it would come under the ‘microscope’,” he says.
“What happens when a large organization such as Eagle flies a small plane such as the Saab 340? It is often not cost-effective and hence if there are any cuts it will usually hit the smallest aircraft.”
Magnusson points out that Eagle previously flew 75 Jetstream 31s and again, as the carrier grew into larger aircraft and its cost-base increased, Eagle phased out all 19-seaters. “Now the time has come for the 30-seaters and I suspect they will focus on the 40-70 seaters going forward.”
He adds: “A few years ago, American Airlines phased out the Fokker 100 fleet with a similar logic and retained the MD-80s/B737s as their smallest aircraft. The F100 fleet was placed quickly with non-US customers.”