American Airlines to buy 260 new planes from Boeing, Airbus and Embraer
DALLAS (AP) — American Airlines announced a massive order for new planes on Monday, 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 aircraft-makers 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 U.S. 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 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 U.S. 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 modernize and simplify its fleet, which is already the largest among U.S. 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 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% by 2026. That is key to the airline’s strategy: American said Monday that members of its frequent-flyer program and other customers who buy premium seats will account for 80% of company revenue this year, up from 70% 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 $1.9 billion last year to $2.3 billion this year and to between $3 billion and $3.5 billion per year to 2030.
Shares of American Airlines Group Inc. fell more than 5% by the end of regular trading.