May 29, 2007

Blowing the Top Off of Paris - Massive Order for American Airlines

UNCONFIRMED BY OFFICIAL SOURCES
Reliable sources inside the aviation industry have told Flightblogger that American Airlines intends to place a "massive" narrow and wide-body order at the Paris Air Show that includes:

- Boeing 787s - 100-125 firm, plus another 100 options
- Additional Boeing 777s - firm number unknown
- Boeing 737s - 100 firm, options unknown

This reasoning behind this order makes sense for the long term growth and modernization for American Airlines. The Boeing 787 fills an important place in the American fleet as older model Airbus A300s and Boeing 767s are retired. American currently operates a fleet of 34 A300s that range from 19 to 14 years old, as well as 73 767s. American has already announced that they will be retiring their non-ER 767-200s which range from 22 to 25 years old. The fleet of 299 McDonnell Douglas MD-82/83 are set to be retired beginning in 2009. The oldest is 24 years old. These aircraft have already been slated for replacement by Boeing 737-800s.

The deal, following completed retirement of the McDonnell Douglas and Airbus fleets, will result in American Airlines becoming an all Boeing fleet, as well as consolidating eight aircraft types to just six. American currently operates the worlds largest fleet of aircraft.

As part of the deal, Boeing will award American Airlines the maintenance contract as part of the Goldcare program. The Boeing Goldcare program is intended to maintain aircraft value and minimize unexpected costs throughout the life-cycle of the 787. American Airlines just completed roughly $100 million worth of upgrades to its Tulsa maintenance facility.

If confirmed, this would be the largest single order for the Boeing 787 program. The details of this order are unconfirmed by official sources, but have been corroborated by sources within the aviation industry. The deal is expected to be officially announced at the Paris Air Show at Le Bourget Field from June 18-24.

22 comments:

Gordon said...

wow ... I guess that would mean a second line is in store for Everett

Ureshs said...

Boeing has the capability of producing up to 20/month off the current 787 line so there won't be any need to open a second line.

FleetBuzz.com said...

Certainly would take the shine off the already dull A350!

chaineezee said...

even though the 787 is a superior plane, IOP, you have to wonder what the execs in toulouse are thinking right now why they cant make up their mind about this "787 killer", like some sort of fantasy or something. Definately means a lot for U.S. legacy to be placing such a substantial order. Coincides with other events this summer just marvelously

Marko said...

What do you think, 787-3 order, yes or no??

chaineezee said...

definately, he mentioned replacing the a300s right?

Anonymous said...

All of the 762's currently operated by AA are ER models, the non ER 767's are long gone.

Interesting rumor, we shall see what comes to pass.

Anonymous said...

I buy it all except the 737 order. I cannot understand why AA would want to replace the MD80 fleet with an old updated jet that will be replaced with NGSA in another 5-7 years. Sure, replace 100 of the oldest MD80s, but the entire fleet no way.

Anonymous said...

I'm calling BS on this one.
Whilst I think there will be an announcement, it will not be anywhere near as significant as this post indicates. I suspect the 78 order will be much less. There may be a couple (no more than a dozen) triples, mostly to grow operations.
The 73 order doesn't make sense, when taken in context with the recent firm order with options, the retiral phasing of the MD80's and the impending new generation 737 model.

The big question in my mind on all of this - where is the money/capital coming from for this? Who will finance it? Will Boeing? Could they? The current fleet is heavily mortgaged and highly leveraged (including the MD8x's).

FYI, the $100M MRO upgrades have not been spent yet, and not all are destined for TUL.

I'd dearly love to see the whole order :
- Boeing 787s - 100-125 firm, plus another 100 options
- Additional Boeing 777s - firm number unknown
- Boeing 737s - 100 firm, options unknown
come to fruition, but I highly doubt it.

C

Anonymous said...

And I wonder which engines they would put on them all????

Will it be an all R-R fleet?

C

Anonymous said...

This is absolutely and categorically false. False, false, false.

Jacobin777 said...

some comments here are completely incorrect

1)most of AA's MadDog 80's are owned...that's why they still fly them even though they are semi-gas guzzlers...
2)AA management themselves have already stated they will be retiring their olderst MadDogs and replace them with a "rolling" B738 order, but will also probably be able to switch to the B737NNG when those come out
3)AA is the only legacy to not have been in BK and has recently had its debt ratings increased..which will give it much better financing than other carriers such as DL and UA
4)as another poster stated, Boeing has the ability to increase the rate of production with the current B787 line and will not open a 2nd line...especially since the bottleneck really is with the suppliers...

Anonymous said...

Jacobin777 said...

some comments here are completely incorrect

"1)most of AA's MadDog 80's are owned...that's why they still fly them even though they are semi-gas guzzlers..."
WRONG
"2)AA management themselves have already stated they will be retiring their olderst MadDogs and replace them with a "rolling" B738 order, but will also probably be able to switch to the B737NNG when those come out"
AGREE
"3)AA is the only legacy to not have been in BK and has recently had its debt ratings increased..which will give it much better financing than other carriers such as DL and UA"
NOT SURE WHAT DL or UA HAVE TO DO WITH IT. FINANCING SCMINANCING - SOMEBODY STILL HAS TO PONY UP THE $20B+
"4)as another poster stated, Boeing has the ability to increase the rate of production with the current B787 line and will not open a 2nd line...especially since the bottleneck really is with the suppliers..."
I don't recall anyone saying that there is /would be a production bottleneck at Boeing. It is likely though that several new lines may appear at Everett to handle an even better than expected order book, albeit probably not from this big order.
C

Lou Minatti said...

A bit more fuel for the fire:

http://louminatti.blogspot.com/2007/05/american-airlines-orders-boeing-787.html

Anonymous said...

"1)most of AA's MadDog 80's are owned...that's why they still fly them even though they are semi-gas guzzlers..."
This is correct. Not wrong.
"2)AA management themselves have already stated they will be retiring their olderst MadDogs and replace them with a "rolling" B738 order, but will also probably be able to switch to the B737NNG when those come out"
AGREE
"3)AA is the only legacy to not have been in BK and has recently had its debt ratings increased..which will give it much better financing than other carriers such as DL and UA"
NOT SURE WHAT DL or UA HAVE TO DO WITH IT. FINANCING SCMINANCING - SOMEBODY STILL HAS TO PONY UP THE $20B+." This means banks are more likly to loan them money.
"4)as another poster stated, Boeing has the ability to increase the rate of production with the current B787 line and will not open a 2nd line...especially since the bottleneck really is with the suppliers..." I don't recall anyone saying that there is /would be a production bottleneck at Boeing." The bottleneck is not at Boeing. The bottneck is the suppliers inablity to produce more parts.

Anonymous said...

"Reliable sources inside the aviation industry have told Flightblogger..."??? Really? I wonder who those "reliable sources" might be?

Anonymous said...

I highly doubt AA will place any orders in Paris this year. With negotiations comming up iwth APA, APFA, and TWU AA is not about to place a massive airplane order.
Possible AFTER the APA is ironed out, but not before. Look for an order in 2009 at the EARLIEST.

Anonymous said...

I don't think they can afford to wait until there is a new contract with the APA. Contract talks are not going well and it could very well take another two to three years to resolve. Also, keep in mind that it will likely take at least 18 months to take delivery of the first aircraft after placing the order. If AA waits until a contract is done with the APA, they may very well be looking at 2011 or later before taking delivery.

aminobwana said...

Answering the question of an anonimous blogger

[i]"The big question in my mind on all of this - where is the money/capital coming from for this? Who will finance it? Will Boeing? Could they? The current fleet is heavily mortgaged and highly leveraged (including the MD8x's)."[/i]

I would say that if all these orders are placed, the bulk of deliveries will be spread over many and relatively far away years.
As BOEING will surly contribute to the funding by asking low advance,
this would not be a to big cash flow problem

All this would have the characteristics of a frame order.

But of course, all this is speculation

aminobwana.

Anonymous said...

Geoffrey Thomas has picked this one up now too:

http://www.theaustralian.news.com.au/story/0,20867,21905994-23349,00.html

"Both manufacturers are expected to make significant order announcements next week at the Paris Air Show, with suggestions that giant American Airlines may order up to 125 787s."

Anonymous said...

any other news about the rumored impending order???

Anonymous said...

Time is running out as there are only two days left at the Paris airshow. At this point it appears that this rumor may be untrue. If it was true, it probably would have been announced already. In addition, AA management has indicated that it will be a while before any 787s are ordered.