This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

AMR Holds an Ace: Most Aircraft Orders of Any U.S. Airline

DALLAS ( TheStreet) -- As it battles to control its destiny in bankruptcy court, American (AAMRQ.PK) is starting to play a critical card: the arrival of 543 new aircraft over the next 10 years.

American has ordered more aircraft than any other U.S. airline. Deliveries will begin in December, when the first of 10 Boeing widebody (BA) 777-300ERs arrive. It will fly Dallas-Sao Paulo. In 2013, the first of 130 Airbus A319 and A321 narrowbodies will arrive: These will be the first aircraft delivered from American's historic 2011 order, the largest commercial aircraft order ever. Also, deliveries of 125 B737-800s have begun ; some were ordered before 2011.

The future will also bring deliveries of 130 Airbus A320 neos, starting in 2017; six 777-200ERs, starting in 2014; and 42 Boeing 787s starting in 2015.

New aircraft provide a big advantage for airlines. They please passengers. They use less fuel than old aircraft. And they require less maintenance, saving millions of dollars, in what is referred to in the airline industry as a "maintenance holiday." The rapid low-cost growth of Spirit (SAVE - Get Report), like the growth of JetBlue (JBLU - Get Report) a decade earlier, is being fueled by new Airbus jets.

Not to say that American is ever going to be a low-cost carrier like Spirit and JetBlue, but obviously it is reducing costs in bankruptcy and it will further reduce costs by replacing the country's oldest fleet with the newest. Of course, it will have to pay billions of dollars to buy the new aircraft, making commitments even as it walks away from leases for older aircraft in bankruptcy court. But generally, new aircraft are easy to finance because they are considered to be strong collateral.

In the battle with US Airways (LCC), which wants to complete a merger with American before the bankruptcy ends, American moved in May to promote the passenger amenities, including lie-flat seats, planned for its widebody fleet. Last week, it announced the amenities for its A321, particularly the 15 aircraft it will use for trans-continental flights.

"Taking over 500 new aircraft presents a tremendous opportunity to modernize our brand," said Rob Friedman, American's vice president of marketing. "Our customers understand that we are moving forward to having the youngest fleet in the industry in five years, and the feedback has been tremendous."
1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
LCC $0.00 0.00%
DAL $41.01 -1.80%
JBLU $18.72 -3.10%
SAVE $40.57 -3.20%
AAPL $92.22 -1.10%


Chart of I:DJI
DOW 17,638.22 -22.49 -0.13%
S&P 500 2,044.40 -6.23 -0.30%
NASDAQ 4,692.2070 -24.8870 -0.53%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs