In a move that highlights the rapid rebound of the travel industry, American Airlines has announced that it is in discussions with both Airbus and Boeing to place an order for new narrowbody jets. These talks come at a time when there is a rush by airlines to increase their fleets amid a burgeoning travel boom.
“We are talking to Boeing and Airbus about our narrowbody aircraft needs for the latter half of this decade and beyond,” American Airlines said in a statement.
While the exact details are not yet available, Bloomberg News reported that the order could consist of at least 100 jets, with the possibility of it topping 200, citing sources familiar with the matter. Commitments for future purchases may also be included in this deal.
Selection of Aircraft Models and Order Size
According to reports, American Airlines has been in negotiations with both manufacturers for several months and is considering Boeing’s 737 Max and Airbus’s A321neo as potential replacements for its current 737-800, A319, and A320 single-aisle models. These negotiations are a reflection of the airline’s forward-thinking strategy to replace its existing fleet later this decade.
The size of the deal could indeed be significant, but American Airlines has also emphasized the young age of their current fleet. “Due to the young age of our aircraft, our fleet replacement needs are very limited. Therefore, we expect aircraft capex for the next several years and likely through the end of the decade to average about $3.5 billion per year,” they noted during an investor call last month.
Current Stage of Talks and Manufacturer Responses
At this point, the discussions between American Airlines, Airbus, and Boeing are reportedly in the early stages, and no decision appears to be imminent. Industry insiders who spoke to Reuters confirmed this information.
Airbus, when questioned by Reuters, remained tight-lipped, stating, “we have no comment on our confidential commercial talks, which may or may not be happening.” Boeing, on the other hand, has not yet responded to a request for comment.
Airbus and Boeing’s Current Standing in the Industry
As American Airlines explores a potential new order with Airbus and Boeing, both manufacturers are showing varied trends in their business dynamics.
Airbus has been flourishing, with an impressive backlog of 8,000 aircraft and over 1,000 new orders placed through 2023, mainly from Air India and IndiGo. Among these, at least 80% are for its A320 family aircraft, including a staggering 4,000 orders for the A321neo. This success enabled Airbus to overtake Boeing in year-to-date deliveries as of April, reaching a total of 181 aircraft compared to Boeing’s 156.
On the other hand, Boeing faced challenges with stagnation in its backlog, due in part to delays with the 737 MAX and 787 Dreamliner. However, 2023 has brought a turn of fortune, proving to be a relatively profitable year for the US-based manufacturer. As of May 2023, they closed with 4,634 aircraft on order, according to FlightGlobal.
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