American Airlines' Order For 130 Airbus Aircraft Launches Massive Fleet Renewal Plan

Nov. 22-- American Airlines launched its $13 billion fleet renewal program on Monday with orders for 130 Airbus A319 and A321 aircraft, which it will begin taking deliveries of in 2013, company executives said.

The 124-passenger A319 and 185-passenger A321 are fully financed through lease transactions with Airbus and are part of a massive fleet renewal plan announced by American in July.

American's fleet renewal plan could include $38 billion worth of orders and options for 925 Airbus and Boeing aircraft over 14 years, American executives said.

"We are aggressively moving forward with our plans to have the youngest, most fuel-efficient fleet in the U.S. in the next five years," said Tom Horton, president of American and its parent, AMR Corp.

"The A319 and A321 aircraft will strengthen our fleet, helping us dramatically improve our fuel and operating costs, while at the same time offering our customers the chance to fly in aircraft that are designed to greatly enhance their travel experience."

The narrow-body Airbus and Boeing 737 aircraft American proposes to add to its fleet are up to 35 percent more fuel efficient than the 200 MD-80s that are the backbone of its 617-aircraft fleet today, company officials said.

Airbus and Boeing have agreed to $13 billion in financing for the first 230 aircraft delivered, American executives said.

The off-balance sheet financing and the fuel efficiency of the new planes are significant because the Fort Worth carrier is projected to spend more than $8 billion on aircraft fuel and post its fourth straight annual loss in 2011.

"This new fleet will dramatically improve our fuel and operating costs while enhancing our financial flexibility," AMR Chairman and CEO Gerard Arpey said in July as he disclosed the fleet renewal plan.

American spokeswoman Andrea Huguely said the company has not determined what routes the A319 and A321 will fly or where they will be maintained.

The 737s and American's former Airbus A300s -- the last of which was retired in 2009 -- were maintained, repaired and overhauled at American's Maintenance & Engineering Center, which employs 7,000 people at Tulsa International Airport.

The A319 will be powered by the CFM56-5B engine from CFM International, a joint venture between General Electric and Snecma, an aircraft engine manufacturer based in France.

The A321 will be equipped with V2500-A5 engines from International Aero Engines, a joint venture between Pratt & Whitney; Rolls-Royce; MTU Aero Engines GmbH, Germany's leading aircraft engine manufacturer; and Japanese Aero Engine Corp.

The financial terms and conditions of the CFM56-5B and V2500-A5 engine purchases aren't being disclosed by the companies, officials said.

CFM President and CEO Jean-Paul Ebanga said his company appreciates American's confidence in the CFM56 product line.

"American is one of our largest CFM56-7B customers, and we are pleased to introduce the CFM56-5B into its fleet," Ebanga said. "We are honored to be given this opportunity to be part of their long-term fleet strategy and to continue our very successful relationship with American."

IAE Executive Vice President Jim Guiliano said his company looks forward to participating in American's fleet renewal.

"We look forward to supporting these engines that provide the lowest fuel burn cost and overall emissions, and lowest noise levels on the A321 aircraft," Guiliano said.

American also is strengthening its Boeing fleet, with plans to acquire 200 additional aircraft from the 737 family -- the airline operates more than 150 of those aircraft today -- with options for another 100 737 variants.

As part of the Boeing agreement, American plans to take delivery of 100 aircraft from Boeing's 737NG (Next Generation) family, starting in 2013, including three 737-800 options that had been exercised as of July 1.

Shares of AMR closed Monday at $1.74, down 6 cents or 3.3 percent.

Airbus' A319 and A321 aircraft specs

A319

Passengers: 124

Range: 4,255 miles

Maximum payload: 29,100 pounds

Overall length: 111 feet

Wing span: 111 feet, 11 inches

Height: 38 feet, 7 inches

Maximum cabin width: 12 feet, 1 inch

A321

Passengers: 185