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American Airlines to Upgrade Fleet With Boeing and Airbus Jets

July 20, 2011
Parent company claims multibillion-dollar order is the largest in aviation history.

The parent company of American Airlines and American Eagle said it is ordering several hundred single-aisle jets from Boeing and Airbus as part of a plan to overhaul its narrow-body fleet.

Claiming it is the "largest aircraft order in aviation history," Fort Worth, Texas-based AMR Corp. said it will be the first U.S. network carrier to take delivery of the Airbus A320neo and the first airline to commit to Boeing's expected new 737.

In all, the company plans to buy 460 narrow-body, single-aisle aircraft from the Boeing 737 and Airbus A320 families beginning in 2013 through 2022 - the largest aircraft order in aviation history.

AMR's overhaul of its fleet will include 260 Airbus A320 jets, half of which will be the NEO (new-engine option) version. (Photo courtesy Airbus SAS)
AMR will buy a total of 200 aircraft from the Boeing 737 family and 260 aircraft from the Airbus A320 family, the company said.

"This was an incredible opportunity for our company that presented itself from two great manufacturers," said Gerard Arpey, chairman and CEO of AMR and American Airlines.

Victories for Boeing, Airbus

Prior to AMR's announcement, Airbus had been grabbing headlines for reports that it had been courting the company in an aggressive effort to break Boeing's monopoly at American Airlines. Without any official plans announced yet for a new Boeing 737, Toulouse, France-based Airbus seemed to have an advantage.

That's why AMR's announcement marked "one of those rare occasions when you can call both competitors 'victors,'" aerospace analyst Richard Aboulafia told IndustryWeek.

"Getting into American and getting such a great endorsement for the A320neo, that's a terrific victory for Airbus," said Aboulafia, who is vice president, analysis, for the Fairfax, Va.-based Teal Group.

"Avoiding near-certain doom, that's a great victory for Boeing at this point."

The big surprise, Aboulafia added, was American's commitment to the new Boeing 737.

"I've never seen a product ordered before it was authorized for offer," Aboulafia said.

'Significant Cost-Reduction Opportunities'

With the purchase agreements, Arpey said "we expect to have the youngest and most fuel-efficient fleet among our peers in the U.S. industry within five years."

"This new fleet will dramatically improve our fuel and operating costs, while enhancing our financial flexibility," he added.

Under the agreement with Boeing, American plans to buy a total of 200 additional aircraft from the 737 family, with options for another 100 737s.

American has the flexibility to convert the new deliveries into variants within the 737 family, the company said, including the 737-700, 737-800 and 737-900ER.

American's most recent deliveries of the 737-800, with 160 seats, include the new Boeing Sky interior, offering larger overhead bins that pivot down and out similar to those on the 787 Dreamliner.

American will take delivery of 130 current-generation Airbus A320 aircraft beginning in 2013.

Beginning in 2017, American will begin taking delivery of 130 aircraft from the A320neo (new-engine option) family. The new aircraft are approximately 15% more fuel-efficient than today's models, according to Airbus.

Under the agreement with Airbus, American said it will have the flexibility to convert its delivery positions into variants within the A320 family, including the A319 and A321.

AMR said the 737 and A320 families "offer significant cost-reduction opportunities in replacing American's older fleet."

For example, Boeing and Airbus aircraft in the 737 and A320 families offer a 35% reduction in fuel cost per seat versus the MD-80 and a 12% and 15% fuel-cost reduction per seat, respectively, versus the 757 and 767-200," the company said.

More to Come?

Aboulafia and other analysts have speculated that the AMR order could trigger other orders from U.S. airline carriers.

"The thing about the North American airline market, particularly in the U.S., is that razor-thin pricing and high fuel prices mean that when one guy starts replacing his old jets, the others guys are going to follow too," Aboulafia said.

He added that Delta and United could be the next U.S.-based carriers to upgrade their fleets.

More "Boeing vs. Airbus" stories:

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