American Airlines announced Wednesday it plans to purchase 460 “narrowbody” jets, splitting the order between Boeing and Airbus.A deal that could total more than $16.2 billion, it’s the largest aircraft order in aviation history.
Single-aisle jets, narrowbody designs arrange two to six passengers abreast along a single, centre aisle.
According to USA Today the deal was being closely watched to see if American would shift away from its Boeing-only strategy and welcome Airbus back into its fleet for the first time since 1987.
The deal breaks down as follows:.
- From Boeing AA will acquire 200 additional 737s with options for another 100
- American can convert the order into 737-700s, 737-800s, and 737-900ERs
- From Airbus AA will acquire 260 new A320s and will have 365 options and buying rights for more aircraft
- American can convert the order to planes within the A320 family, like the A319 and A321
- Counting options and future purchase rights the order could total 900 planes
Bloomberg reports Boeing’s proposal includes upgrading its 737s with new engines to counter Airbus’s improved A320neo.
About the planes
The world’s best selling jet aircraft of all time, the Boeing 737 is a twin-engine jet that will seat 85 to 215 passengers. The 737-700 was the first of Boeing’s Next Generation series launched in 1993.
Introduced in 1994, the 737-800 is the stretched version of the 700, seats 162 passengers in a two-class layout, and is the direct competitor of the A320. The 737-900 is the most powerful model to date and competes with the Airbus A321.
The Airbus A320 is manufactured in Toulouse, France and Hamburg, Germany, holds about 148 passengers and has a range of between 1,700 to 6,500 nautical miles depending on model.
The A319 is a shortened version of the A320 with extended range. Going the other direction the A321 is the stretch version of the A320, holds about 180 passengers, and is the largest of the A320 family.
The deal on the books and the stock price
Boeing is also looking to match Airbus’s financing options, with both companies leasing about half the jets to American, keeping the planes off the airlines’ balance sheet.
AMR rose 2 cents to $4.93 in NYSE trading yesterday. Boeing gained 98 cents, 1.4 per cent, to $70.53. Airbus parent European Aeronautic Defence & Space Co. added 72 cents, 3 per cent, to €24.65.
Today’s deal comes on the heels of two straight years of losses for American with the company hoping to increases its fleet’s fuel efficiency and customer amenities.
The current average age of American’s fleet is 16 years, tied for the oldest with Delta.
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