Date of publication: 19.07.2011
Media type BusinessWeek Online - us
URL:
http://www.businessweek.com/news/2011-0 ... t-order-be
tween-airbus-boeing.html
AMR Said to Review Split of Jet Order Between Airbus, Boeing
By Andrea Rothman, Mary Jane Credeur and Mary Schlangenstein (Updates with pending Eagle decision in fifth
paragraph.) July 19 (Bloomberg) -- AMR Corp.'s American Airlines may split an order for narrow-body jets between
Airbus SAS and Boeing Co., which are making last-minute pitches before a board meeting that starts today, three
people familiar with the matter said. American executives haven't settled on a recommendation to directors, said
one of the people, who wasn't authorized to speak publicly. Talks continued late yesterday, with teams from the
planemakers working in the Dallas area near American's Fort Worth headquarters, two of the people said. The
order under study would be for as many 280 single-aisle planes, people familiar with the matter said last month. A
transaction of that size would be at least $22.6 billion at list prices, based on the $80.8 million retail value of
Boeing's 737-800. Airbus's A320 jets cost more. Buying new fuel-efficient planes would help Fort Worth,
Texas-based AMR as it struggles to end two straight annual losses. A shift from American's all-Boeing main jet
fleet also would be a boost for Toulouse, France-based Airbus by expanding the planemaker's U.S. foothold in the
narrow-body jet market. American is leaving open a possible winner-take-all decision for either planemaker or
dividing the deal, one of the people said. Management also hasn't made a recommendation on the future of the
Eagle regional airline, because no new air-service agreement is in place, one person said. Mike Tull, a spokesman
for Chicago-based Boeing; Ryan Mikolasik, an outside spokesman for American, and Airbus's Mary Anne Greczyn
declined to comment. Role of Financing Boeing's ability to win a piece of the plane order from American, the
third-largest U.S. airline, may rest on whether it can provide financing that matches Airbus's offer, one of the people
said. American and Airbus have discussed having the planemaker lease some of the jets to the carrier instead of
selling them, cutting American's up-front costs, two people familiar with the matter said. Airbus would then get the
planes off its books by selling them to leasing companies, the people said. An Airbus sales team worked from a
hotel in the Dallas suburb of Irving to press its case with American, one person said, as negotiations continued
ahead of an AMR board meeting beginning tonight. Boeing's commercial airplanes chief, Jim Albaugh, visited
American last week, saying he had a "good meeting" with Chief Executive Officer Gerard Arpey. Options Open
While one person said that Airbus had a tentative agreement with American for the full order last month, another
said talks never got that far, with the airline keeping all its options open. The 737 is the world's most widely flown
airliner and competes with the A320 family. The A320 has a list price of $85 million, with the A320neo model with
upgraded engines costing about $6.2 million more, according to the planemaker. Airbus plans a 2015 start for
shipments of the neo, a plane that has become the company's fastest seller since its unveiling in December.
Airlines crave fuel economy because jet fuel is, with labor, one of their biggest costs. AMR fell 10 cents, or 2
percent, to $4.91 yesterday in New York Stock Exchange composite trading, the lowest close since July 2009. The
shares have tumbled 37 percent this year. AMR may post an adjusted second-quarter loss tomorrow of 75 cents a
share, the average of 13 estimates compiled by Bloomberg. New 737s or A320s would help American retire its 216
Boeing MD-80s, the most-numerous type among the carrier's 613-plane main jet fleet. The MD-80s are among the
oldest models at major U.S. airlines, with many flying for more than 20 years, and burn more fuel than the 737s
American has on order. American's last flight with an Airbus plane came in August 2009, with an A300, which is no
longer in production. At the end of March, American had 10 of the twin-engine, wide-body planes on its books as
leased or owned but not in operation. --With assistance from Susanna Ray in Seattle and Gopal Ratnam in
Washington. Editors: Ed Dufner, James Langford To contact the reporters on this story: Andrea Rothman in Paris
at
aerothman@bloomberg.net; Mary Jane Credeur in Atlanta at
mcredeur@bloomberg.net; Mary Schlangenstein in
Dallas at
maryc.s@bloomberg.net To contact the editors responsible for this story: Ed Dufner at
edufner@bloomberg.net; Benedikt Kammel at
bkammel@bloomberg.net READER DISCUSSIO
"Il buon senso c'era; ma se ne stava nascosto, per paura del senso comune" (Alessandro Manzoni)
