In the largest order in aviation history, American Airlines announced that it will buy at least 460 new planes over the next five years, and possibly up to 925 aircraft in total over 12 years, in a deal estimated to be worth almost $80 billion.
Once completed, American will have the youngest fleet in the industry. These new planes will save money on fuel and offer new amenities to passengers. Through 2025, American will have additional options and purchase rights for another 465 planes.
American has announced that the plane manufacturers are providing $13 billion in “committed financing” through lease transactions. It is anticipated that each plane would retail from $80 million to $85 million.
American is splitting the order between aerospace giants Boeing and Airbus, ordering 260 planes from Airbus and 200 from Boeing. The order with Airbus breaks the longstanding monopoly Boeing has had with the airline’s and has serious implications for the jet makers.
In a statement, American Airlines President Tom Horton said that his company decided to split the order between Boeing and Airbus as a matter of scale, arguing that no one manufacturer would be able to fill such an order. Horton also clarified in his statement that Boeing’s recent labor issues, which could have setback their manufacturing commitments, was not a factor in the company’s decision.
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By Peter Greenberg for PeterGreenberg.com.
Related Links: CBS News, New York Times, CNN, AA News Release
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