Report: American Airlines to replace US fleet
Thursday, June 30, 2011
FORT WORTH, Texas (AP) — American Airlines is in talks with aircraft manufacturers Airbus and Boeing Co. to purchase at least 250 aircraft in a deal valued at about $15 billion, The Wall Street Journal reported Wednesday.
The newspaper cited unnamed persons familiar with the matter who said American wants to replace more than a third of its entire fleet.
Such a large order would represent a potential windfall for both aircraft makers and would provide an extra psychological boost for Europe’s Airbus if it can crack American’s all-Boeing fleet of 620 planes.
It also would mark a bold step by American to lift its fortunes by improving the comfort and fuel efficiency of its aging domestic fleet. Among the largest U.S. airline companies, only American parent AMR Corp. lost money last year.
The high price of jet fuel pushed AMR to a $436 million first-quarter loss this year, leading the company to scale back plans to add flights, retire at least 25 older, gas-guzzling MD-80 planes in 2011, and add newer jets.
American had more than 200 MD-80s at the start of the year, and they averaged 20 years old — five years older than the fleet-wide average. By speeding up their replacement, American could save money on fuel and maintenance.
American worked out a tentative agreement with Airbus several weeks ago without telling Boeing, then approached Boeing and asked it to make a counter offer, according to the report.
Airbus is offering American discounts, special financing terms and other incentives to win the deal, the Journal reported. It said that American is interested in Airbus’ A320 planes, including a model with a new, more-efficient engine that is scheduled to go into production in 2015.
American also is considering purchasing planes from Boeing’s roster of 737 models. The airline already expects to add 54 737-800s by 2013, has more 777s on order and is a customer for Boeing’s new 787, which it calls the Dreamliner.
Airlines often try to operate with fewer, not more, types of aircraft. It’s simpler and reduces costs for pilot training, maintenance and spare parts. Southwest Airlines Co. famously uses only Boeing 737s. In recent years, American has simplified its fleet from 14 types to five.
American wants to nail down the terms of the aircraft orders this summer, the Journal said, citing the persons familiar with the matter.
Representatives from American, Boeing and Airbus, a unit of European Aeronautics Defence & Space Co., declined to comment.
AMR shares ended the regular session down 13 cents, or 2.4 percent, to $5.41. Shares of Chicago-based Boeing ended up 63 cents to $72.72.
Use the comment form below to begin a discussion about this content.
Please review our Policies and Procedures before registering or commenting