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American : No Single Airframer Could Meet Order Demand

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Darren Shannon for Aviation Week - The pure size of American Airlines’ narrowbody order placed yesterday, and the carrier’s desire to turn its domestic fleet from the country’s oldest to youngest in just five years, ensured that Airbus and Boeing would share some of the spoils from the largest such deal in commercial aviation history.


American’s order, which numbers as many as 925 aircraft if all options and purchase rights are included, has still to be firmed, with American requiring new contract terms from its pilots for all the new types involved and Boeing the approval from its board of directors for its offer of a 737 re-engined with a CFM International Leap-X powerplant.


But these issues aside, this deal heralds a new era in order negotiations, says American President and CEO Gerard Arpey. For one, it shows that Airbus and Boeing are able to recognize the limits of their production capacity, while acknowledging that exclusivity with a single airframer does not always meet an airline’s needs.


American’s plan is still being developed, and this is reflected in the terms of each order with Airbus and Boeing. While numbers are basically set, American has retained flexibility to choose from all the variants available in Boeing’s current 737 family of aircraft and all but the A318 from Airbus’.


What is known is that 100 Boeing 737 Next Generation and 130 aircraft from Airbus’ current A320 family will join American’s fleet in short order, starting in 2013. Top executives from Airbus, Boeing and American also tell Aviation Week these will all be leased, aided by some $13 billion in financing provided by the two manufacturers.


Jim Albaugh, president and CEO of Boeing Commercial Airplanes, also confirmed that the U.S. manufacturer will lease some of these aircraft through its own Boeing Capital division, although lessors also will be involved. Airbus President and CEO Tom Enders, meanwhile, would only say, “Airbus is not attempting to become a leasing company.”


Boeing’s initial obligation is to add 100 more 737 Next Generation aircraft to an American fleet that already includes more than 150 737-800 variants. Delivery of these 737s is scheduled to start in 2013, when American could have close to 200 737-800s in operation. A further 100 737s have been optioned, although only 40 of these are for current model 737s.


These are the only aircraft from today’s announcement that are permitted under the labor agreement with American’s pilots, which specifies pay rates according to aircraft type, rather than weight or seating capacity.


The remaining 60 options, and a proposed firm order for 100 more Boeing aircraft are for a re-engined 737. This order, however, is contingent on Albaugh's gaining board approval for the program, which commits the type to a single engine, and pushes a proposed clean-sheet narrowbody into the middle of the next decade.


Read the complete story here!

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