American Airlines Goes French, Orders Airbus

[Sabre86]

WFAA:

FORT WORTH - American Airlines is buying at least 460 new planes over the next five years in what it calls the biggest airline order in history. And in a victory for Airbus, it's splitting the work between the European plane maker and Boeing.

American said Wednesday it will buy 260 planes from Airbus and 200 from Boeing Co. It expects the new, better-mileage planes to provide much-needed savings on fuel costs. American's current fleet is among the least fuel-efficient in the industry.

The jets carry a sticker price of more than $38 billion, although big airlines routinely get discounts. And American might have played one aircraft maker off the other to get a better deal.

AMR Corp., American's parent, also announced that it plans to spin off its American Eagle regional-flying subsidiary as a separate company.

The twin announcements overshadowed the news that AMR lost $286 million in the second quarter, as rising fuel prices wiped out an increase in revenue. The loss equaled 85 cents per share. Wall Street was expecting a loss of 77 cents, according to FactSet. Still, AMR shares rose almost 4 percent to $5.11 in premarket trading.

In recent weeks, the airline industry was riveted by the drama of Airbus and Boeing making competing bids to overhaul American's fleet. American currently flies and all-Boeing fleet.

In discussions that lasted long into Tuesday night, American decided to buy 200 planes from Boeing's 737 family of workhorse single-aisle planes, with deliveries starting in 2013. Half are expected to be equipped with updated, more fuel-efficient engines. The airline said it will take options for another 100 737s.

American also will buy 260 planes from Airbus's A320 series with deliveries starting in 2013, and take options and purchase rights for 365 more. Starting in 2017, American will get the first of 130 copies of a new Airbus plane called the A320neo — for new engine option — which Airbus claims will be 15 percent more fuel-efficient than current jets when it goes into service in late 2015.

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Rumor has it that Airbus sold these at 75% off at least, possibly even more. They also bumped other customers very far down the line, despite those customers already have paid deposits for certain delivery slots. There is a reason Airbus has never made a profit in its entire history. When you get tens of billions a year in "aid" from the EU, you can see your crap dirt cheap. American was the last of the legacy carriers to not order Airbus in the recent future (Delta had some after taking over Pan Am, and now is infested with hundreds from Northwest. Continental inherited some from Eastern, and is also now infested with them after being swallowed up by United.)

The only U.S. carrier which is not going to majority Airbus is Southwest Airlines.

Anyway, I called and canceled my AAdvantage membership earlier today. I will not fly on an Airbus. I would drive before I would ever set foot on one of those things or fly with an airline that uses them. If I can't get somewhere without being forced on an Airbus or an airline that flies them, I will not go.

[Evad]

If I'm not mistaken, Airbus is heavily subsidized which makes it even more amazing that Boeing could get in.

[Sabre86]

If I'm not mistaken, Airbus is heavily subsidized which makes it even more amazing that Boeing could get in.

 

Airbus has never made a profit. They are fully subsidized by the EU and receive billions in "loans" to pay the 15-25 billion it costs to design and build a new aircraft. Then for some reason, the "loan" disappears and is never repaid. Airbus uses some of the money to make up for the losses they eat on every big deal like this one. In the past, they actually would give aircraft away for free.

 

Despite the fact that the WTO has ruled against Airbus, the EU just ignores it and keeps right giving Airbus billions a year.