American moves ahead with 757 modifications for transatlantic routes

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Oneworld alliance member American Airlines is making headway in its reconfiguration of 18 domestic Boeing 757-200s destined for transatlantic services and flights from Miami to the Northern Rim.

Two aircraft have already been modified with winglets and lie-flat business-class seats in the front of the cabin.

The first of these begin transatlantic operations this month on seasonal service between New York JFK and Brussels, the carrier confirms to ATI. Boeing 757 flights linking Barcelona with JFK are due to start in August.

"These 757s replace [Boeing] 767-300s and going forward the 757s will used to replace larger-capacity types, augment current service and possibly to launch service to new European destinations," says American.

Company senior vice-president, planning Henry Joyner adds: "The product that we put in the front cabin will be perfectly competitive with anyone else. Its size and economics at that range make it pretty attractive."

American has been reluctant to predict whether it will implement further capacity reductions this summer in the highly-competitive North Atlantic market, saying it is "waiting on more visibility" about how the season appears to be shaping up "before deciding whether more must be done" on the international side.

But after seeing transcontinental routes take "the steepest unit revenue declines" in American's entire system during the first quarter, the Oneworld alliance member "probably" expects mainline system capacity to be down about 6.5% versus 2008 and mainline international to be down about 2.5%, said Tom Horton, CFO of American parent AMR Corp, during a recent earrings conference call.

The carrier has already announced that it will cull a single frequency from Boston to London Heathrow in August, resulting in two daily flights on the route instead of three. However, it is adding a third daily Heathrow-Dallas service on selected days of the week operated by 767-300 aircraft.

Joyner explains why forecasting the summer schedule is so difficult. "It is hard to tell because a lot of leisure traffic is booking much closer to departure than before. March is typically a heavy period for us because of holidays [in the US] and we saw people booking closer to departure and one school of thought is that may be what we will in the summer too."

One of the challenges right now, he says, is that "for the last year when the dollar was relatively weak it was very attractive for Europeans to come to the US". With that no longer the case, and in the face of a lack of consumer confidence, North Atlantic traffic "is very challenged this year".

American's capacity additions across the North Atlantic over the last two or three years have been pretty modest and generally a good match up to its partners. For example, on 1 May American launched daily nonstop service between its Dallas hub and Madrid in anticipation of anti-trust immunity with Spanish carrier Iberia and British Airways (BA).

"Given the state of the traffic across the North Atlantic, we are very cautious. The connectivity with Iberia will be better and [because of open skies] we can codeshare [beyond Madrid] more effectively on the other side," says Joyner.

Indeed, American believes it has answered all of the Department of Transportation's questions about its antitrust immunity application with BA, Iberia, Royal Jordanian and Finnair.

"While we can't make promises about the outcome of the process we believe we have made a very strong case and we continue to expect that approval will occur in the second half of this year," says Horton.

As part of its strategy to shrink capacity to combat then-escalating fuel costs, American last year eliminated service from New York JFK to London Stansted, after premium carriers Eos and Maxjet ceased operations. Since that time, fuel prices have moderated.

American has effectively "swapped the oil prices of 2008 for the travel demand crisis of 2009", says CEO Gerard Arpey.