American Air in talks with Airbus, Boeing for 100-jet deal
Bloomberg
American Airlines is in talks with Airbus and Boeing to order at least 100 narrow-body jets to replace some of the oldest aircraft in its fleet, according to people familiar with the matter.
The U.S. airline is considering Boeing’s 737 Max and Airbus’ A321neo to replace aging 737-800, A319 and A320 single-aisle models late this decade, said the people, who aren’t authorized to speak publicly about the discussions. The order may be worth about $6 billion, according to plane-value estimates by Bloomberg Intelligence.
The deal size could top 200 aircraft, including commitments for future purchases, two of the people said. American has about 255 of the workhorse jetliners in its fleet that are near the two-decade mark where maintenance costs soar.
While the negotiations have been under way for several months, executives aren’t yet close to a final decision, the people said.
“We continually evaluate our fleet and our future aircraft requirements,” an American spokesman said in response to Bloomberg queries. “We are talking to Boeing and Airbus about our narrow-body aircraft needs for the latter half of this decade and beyond.”
Representatives of Airbus and Boeing declined to comment.
An order of that size by American would add to the trend of mega-deals as demand booms for narrow-body airliners. India’s dominant carrier IndiGo, European budget leader Ryanair and United Airlines are among the carriers ordering hundreds of airplanes at a time in recent months. Airlines are seeking to lock in delivery slots as production rates at Boeing and Airbus lag behind pre-pandemic levels.
American is still taking the last of the 460 narrow-body jets it ordered from the plane-making duo in 2011, a landmark deal that convinced Boeing to move forward with the 737 Max. Including subsequent transactions, the airline is due to take 148 more single-aisle jets through 2027.
Executives at the airline have begun to publicly discuss the possibility of longer-term orders in recent weeks, but say they’re in no hurry given American’s relatively young fleet. The company expects to spend about $3.5 billion a year on aircraft through the end of the decade, Devon May, the airline’s chief financial officer, said during a July 20 earnings call.
“Look, we’re going to need aircraft,” Robert Isom, American’s chief executive officer, said during a town hall meeting last month. “At some point, I wouldn’t be surprised if we make a commitment to some narrow-body aircraft as we get past 2027.” The comment was first reported by the View From the Wing blog.
Isom also told employees he wasn’t worried that Indigo’s 500-jet order would preclude American from securing new planes when it wants them.
“I do expect that we get appropriate regard in terms of their attention,” he said in a video viewed by Bloomberg.