American Airlines to buy 260 new planes from Boeing, Airbus and Embraer to meet growing demand
AMERICAN AIRLINES has announced a massive order for new planes, splitting 260 new aircraft between Boeing, Airbus and Embraer in a move designed to meet growing travel demand and increase the airline’s supply of premium seats.
American said it placed options for up to 193 more planes over the next several years.
The airline and the aircraftmakers did not disclose financial terms for the orders.
The package of orders includes 85 Boeing 737 Max 10s – a larger version of the Max that has not yet been certified by United States regulators. The plane is already years behind schedule, and United Airlines – which has 277 on order – removed the Max 10 from its plans, at least temporarily.
Boeing is under intense scrutiny by the US Federal Aviation Administration to fix problems in its manufacturing system, particularly since a panel blew off an Alaska Airlines Max 9 in midflight in January.
American gave the US plane maker a vote of confidence, however, even converting a previous order for 30 Max 8s to the larger Max 10s.
It also ordered 85 A321neo planes from Airbus, Boeing’s European rival. The A321 and Max 10 are about the same size.
The Fort Worth, Texas-based airline also ordered 90 smaller E175 aircraft from Brazil’s Embraer.
The planes are all single-aisle, so-called narrow-body aircraft that American will use for flights within the United States and to nearby international destinations. In a presentation for analysts Monday, American called its short-haul network “the foundation of value for customers and investors.”
American CEO Robert Isom said the airline has invested heavily in the last decade – more than 600 planes, including those used by its regional affiliates – to modernise and simplify its fleet, which is already the largest among US carriers.
“These orders will continue to fuel our fleet with newer, more efficient aircraft so we can continue to deliver the best network and record-setting operational reliability for our customers,” Isom said in a statement.
American now has orders for 440 planes, some of which aren’t scheduled to be delivered until the next decade.
American is joining rivals Delta Air Lines and United Airlines in chasing premium passengers. American said it will retrofit its current Airbus A319 and A320 jets with power outlets at every seat and more first-class seats.
Those upgrades and new planes will help American increase the number of premium seats in its fleet by more than 20 per cent by 2026. That is key to the airline’s strategy: American said Monday that members of its frequent-flyer programme and other customers who buy premium seats will account for 80 per cent of company revenue this year, up from 70 per cent in 2017.
American announced the aircraft order — which had been widely expected – a few hours before an investor day meeting with Wall Street analysts in New York.
American executives did not update their January forecast of first-quarter and 2024 earnings. They said capital spending on aircraft will rise from US$1.9 billion last year to US$2.3 billion this year and to between US$3 billion and US$3.5 billion per year to 2030.