AMR Places Big Order for New Jets
"This is a difficult decision in these incredibly volatile times, but it is fundamental to the long-term strategy of the company, and we felt it was a wise decision to make," said Dan Garton, executive vice president for marketing, in an interview.
"Airlines are often criticized for buying at the peak and having the airplanes delivered four years later, for buying when things are great and then having the
The order has a book value of $20 billion, but airlines invariably pay less than book value for new aircraft. Garton said American is not concerned about financing, since the first delivery is four years off. "It's very likely there will be some slippage to the original schedule," given delays in the 787 program and the ongoing strike at Boeing.While it's rare for a carrier to acknowledge that an order might not be on schedule the day it's placed, Garton noted that "it's not ideal to enter into an agreement when you have uncertainty, but it's a reality we have to face." The planes would replace aging widebodies in the American fleet, including Airbus 300s, as well as 767s and 777s. The first 42 deliveries are scheduled for 2012 to 2018, with the 58 option deliveries tentatively planned for 2015 to 2020. The deal is contingent on American reaching an agreement with its pilots to fly the aircraft.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV