American Airlines To Order Aircraft

American Airlines has quietly kicked off one of its well you'd say bigger fleet decisions for the next decade. It's issued a formal request for proposal or more commonly and simply referred to as RFPs to Airbus and Boeing. The issued RFP which would see the airline welcome a new batch of aircraft in the 2030s targets the replacement of its aging 777-200ERs with the need for a new efficient option to take it forward. The pursuit by American Airlines comes amid what we already know is a gap that's emerged between itself and competitors and no I'm not talking American Airlines being the one that's created the gap. It's Delta and United who have taken strides ahead, accelerated their own fleet renewal and grown this decade. Much of the renewal of that fleet within the United States has really been taken from the advantages of the pandemic. If there were any we saw demand plummet and jets retired that were already on the way out. That meant companies could streamline, reduce the number of aircraft families they operated and now many have continued with that sentiment and finally started receiving the aircraft from the orders that they have long planned. Speaking at a recent shareholder meeting the CEO of the airline confirmed that they've issued an RFP for commercial planes for that 777-200ER fleet as touched on. Now as part of that the airline is actively engaging with Airbus and Boeing to help shape its next widebody order. This is a very calculated decision and comes now given that the 777-200ERs are the oldest and most important sub fleet getting close to the retirement age and when that hits the early to mid 2030s they'll definitely be needing to have departed. At the moment given that widebodies are also long sold out I'm sure as you can imagine the expected retirement of the 777s being planned so far in advance certainly correlates to trying to get in orders sooner rather than later so American doesn't miss out on delivery slots when they need it the most. With this in mind that is why it's time now to define what comes next and this will be a significant order exactly why Airbus and Boeing will actively pursue winning it over. American Airlines fleet is huge with over 1000 planes present the 777 family accounts for nearly 70 however the bulk in the 777-200ER sees nearly 50 in the operation. These already average 25.5 years so yes if we're measuring it off average age they are the oldest in the mainline operation and while they are workhorses and have been the heart of the transatlantic even transpacific ops for quite some time and cemented their legacy they are seeing their age cut up to them and when you're comparing it to inbound planes like the 787 well the difference is staggering but that's as you would expect nothing shocking there. These 777s do form an older part of an era of aircraft they're less fuel efficient less agile and competitive in comparison to the new competitive twin jets we've seen enter service and as a result with age only going up and fuel costs rising there are maintenance concerns and more it's time to move on eventually though not right now. You also remember that the airline is still taking delivery of next generation models part of hefty investments tied to growth ambitions it is very important to not leave other segments like the dash 200er out of the equation the circle of life requires the airline to select a more efficient replacement with enough time to make a calculated choice based on the RFP to cut unit costs and emissions that has obviously all been compounded as well with a real pursuit of premium revenue that is how it feels it is going to be able to get closer towards its competitors given that American Airlines' RFP is in its early stages a decision as I'm sure you can imagine has yet to be made however Airbus and Boeing are going to put forward their best solutions for what would be a valuable contract for them and given that American has nearly 50 of the dash 200ers in service today it would obviously want to try and replace these and potentially scale for future growth. On Boeing's side you're looking at the 787 Dreamliner for starters it is maybe some would consider to be the most straightforward option that there is when pursuing a wide-body plane doubling down recommitting exercising options this is an aircraft we see right around the world in American colors they have commonality on their side and real world experience there are obviously three variants that are present that the airline could say dabble around with layouts and more to match what the dash 200er offers for a future you might even see a larger 787 model included if they feel they need capacity on some of those shorter range trunk routes the flexibility is what's made the 787 family a winner over on Airbus's side there are only two wide-body aircraft families in the A330neo and the A350 the latter was part of a previous actual order that American held albeit one that they inherited and they went on to cancel so if they were to purchase it again it would represent a new aircraft type and one that was already present but obviously come with maybe not the most simplistic entry in say comparison to the Dreamliner all that to say if you're looking at the direct replacement for the 777 family on a whole well that's the 777X you have the larger 777-9 and the 777-8 present the latter is the smaller model it hasn't exactly been favorable thus far and we have to remember that no US airline has committed to the 777X series as of yet so it is over to you obviously very early stages and an order won't come in say the next two to three months this is something we should see begin being delivered in the 2030s but it's better to get in now and when those slots are available thanks for watching take care and i'll see you back here soon