WSJ Article: AA Looking at Airbus and Boeing for Jet Purchase

Discussion in 'American Airlines | AAdvantage' started by DestinationDavid, Jun 29, 2011.  |  Print Topic

  1. DestinationDavid
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    Sorry if you don't have a subscription: LINK. Another link detailing the information that cites the WSJ article for those without a subscription: LINK.

    • Negotiating with Boeing and Airbus
    • Approximately 250 new planes
    • Estimated $15 billion deal
    Thoughts on AA going Airbus? Moving from an all-Boeing fleet to a mixed fleet?

    Either way, interesting to see AA leveraging some negotiation muscle with Boeing.....
     
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  2. HaveMilesWillTravel
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    It was previously discussed here:

    http://milepoint.com/forums/threads/american-in-talks-for-100-airbus-a320-aircraft.13144/

    This article has a lot more details, though, that the thread above speculates about.

    Tip: I usually am able to access the actual WSJ article if I put the article's headline into Google and access the article's page via the Google results page (won't help to paste that URL here, though, as it seems to be a one-time access URL).
     
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  3. DestinationDavid
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    I remember that old posting but I figured with the new information, increased numbers, etc it could manage a new thread.

    I attempted the Google trick previously, it didn't work for me. :confused: Maybe it's my location?
     
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  4. gemac
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    gemac Silver Member

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    Likely a negotiating ploy, as you suggested.
     
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  5. DestinationDavid
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    My thoughts exactly. There's a lot more to going w/ Airbus than just signing a contract and having planes show up.
     
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  6. legalalien
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    legalalien Gold Member

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    "According to two people familiar with the talks, American first hashed out a tentative deal with Airbus several weeks ago, without telling Boeing the two were in talks. American then went to Boeing with the Airbus offer and asked the Chicago aerospace giant to make a counter offer."

    Interesting negotiation tactics, I think. I imagine if AA decides to stay with the 737 family, Airbus will feel they've been used.
     
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  7. newbluesea
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    I rather suspect that similar tactics are used by many astute individuals in attempting to obtain the best deals for themselves, no? ... whether its a mortgage loan or a auto lease.
     
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  8. legalalien
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    legalalien Gold Member

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    True, but more often than not, we hear about airlines inviting suppliers to bid on a planned purchase.

    I guess I should have said 'unusual' instead of 'interesting'.
     
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  9. DestinationDavid
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    I believe you may have missed the several posts following the one you quoted about how that method did not work for me on this article when I attempted it before posting this link.... but thanks for offering the advice again. ;)
     
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  10. Vik Murthy
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    I just deleted my post once I saw that someone mentioned the Google trick already. Just for your reference, I was able to use that method to read the full post just now.
     
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  11. JohnDeere19
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    Interesting...looks like AA is learning how to do business and negotiate.
     
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  12. Tenmoc
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    Thank you DD for the links.
     
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  13. HaveMilesWillTravel
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    Really, I cannot imagine that Airbus and/or Boeing were surprised.
     
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  14. jbcarioca
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    The only thing that has changed since our earlier discussion is that Airbus NEO orders have grown by another 100 or so. Factually, there may be several options for AA to replace the ancient MD's within five years, although not the 757's.

    There is Embraer, whose 170-195 are in service and performing well. Canadair C series could do it. Then if they want more capacity they could drive an incredible bargain with Boeing for 737-700/800/900.

    It is hard to imagine Airbus with fast deliveries of NEO now, no matter how much they want AA. OTOH, they could offer A320 now with transitions later, as they've done with other carriers already. That would give AA another engine to maintain also.

    Seems to me the story is getting more interesting and probably harder for AA since they came to this party long, long after it began.
     
  15. legalalien
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    legalalien Gold Member

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    I wonder if Boeing is in the position to offer current 737NG and an option to replace them with whatever they decide to build, which (I presume) will have fuel burn equal to, or better than A320NEO.
     
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  16. HaveMilesWillTravel
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    Didn't this story or some other say that AA wants to make a decision as early as July while Boeing has said they'll figure out by year-end what they will do? I doubt that AA would enter a deal like you describe without knowing what exactly they'll get in X years. Of course, this maneuvering could simply push Boeing to make the decision faster, but I wonder if they can actually do that without some engineering studies. I asume it's not purely a management decision between two options that have both been completely researched/designed.
     
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  17. legalalien
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    Probably not, but at the same time, they've been considering options for a while now, so engineering studies have got to be either complete or very quite close to completion. BA could potentially share their preliminary conclusions with AA to 'get their input', thus stroking AA management's ego.

    Finally, we don't know what this summer deadline really means. The article only says that, "American hopes to resolve terms of the huge order this summer." It would not be prudent for AA to place a 15B order not knowing what BA's offering is, unless they absolutely can't wait another 6 months or so.
     
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  18. HaveMilesWillTravel
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    Not sure that we arm-chair aircraft framer CEOs have the insights into what it takes (and the knowledge of when they started) to figure out if they are complete or close to completion ;-) Yes, I would think the need for a 737 replacement has been known for quite a while. But they've also been busy focussing resources on their wide-body projects, I believe.

    And maybe that's already happened, and the result was AA looking for other options.

    Yes, I'd agree with that.

    In any case, it's exciting and interesting to observe and speculate :D
     
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  19. jbcarioca
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    That would be a trifle long-range even in a long planning cycle like this one. Airbus is doing that now with A320's and A350's and Boeing did it numerous times in the past. I am sure they will do something like that, especially because AA still has so many B787 and NG's on order.
     
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  20. bakedpatato
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    No way Boeing is going to let AA go A320...I almost feel like all the 737NG airlines are trying to force Boeing to officially respond to the NEO and putting out false flags like this to scare Boeing into coughing up more NGs at lower prices ;)
     
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  21. The Traveller
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    Latest articles online are now pointing to a 250+ aircraft order from boeing, airbus, or both. I still think (fine, hope) that AA will take on a few more 737NG's and become the launch customer for its replacement...
     
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  22. jbcarioca
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    AA will not be the launch customer for anything IMO. They have a serious "late adopter" mentality, or sao it seems.
    Why "almost"? I am certain of that. OTOH Boeing is very fully occupied and they need to do major work to avoid losing lots of 777 business as well as 737, and so far their engineering and logistics techniques have not been stellar. Airbus has already been through much of that learning curve. The 787 service entry and entry of new versions will be the big story for them. Only then will the NG replacement be possible.

    The big question is whether Airbus is in better shape for all this activity. The NEO is a far smaller task than the A350, and the latter program seems to be now in good shape except for the engine enhancements for the 900. That is less directyl an Airbus issue. I wager Airbus will get more A350 orders quickly if the 787 has any more launch problems.

    For those of the Americans who are feeling nationalistic about this competition I suggest a quick review of national content these days. All the airframers are quite internationalized now and some Airbus models have more US content than some Boeing models. YMMV.
     
  23. bakedpatato
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    Whoops, I meant to say "Almost all the 737NG operators..." because AS seems quite happy to keep picking up 738s and 739ERs ;)
     
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  24. jbcarioca
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    There are quite a few around the world who like excellent deals on obsolescent aircraft/ LAN, for one, just ordered more 767's and they are not the only such case. Despite all the new aircraft drama, the capital cost for legacy NG's, A320's, A330's, even 767's is so low that they begin to have appeal for many airlines. AS is not the only bottom-feeder for new aircraft at cheap prices.
     
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  25. HaveMilesWillTravel
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    Well, well, well. ... Not just a negotiation ploy, it seems :D

    http://aa.mediaroom.com/index.php?s=43&item=3286

    American also will acquire a total of 260 Airbus aircraft from the A320 Family and will have 365 options and purchase rights for additional aircraft. American has the flexibility to convert its delivery positions into variants within the A320 Family, including the A319 and A321.

    American will take delivery of 130 current-generation Airbus A320 Family aircraft beginning in 2013. Beginning in 2017 American will begin taking delivery of 130 aircraft from the A320neo (New Engine Option) Family featuring next-generation engine technology. The new aircraft are approximately 15 percent more fuel efficient than today's models. American will be the first network airline in the U.S. to deploy this new-technology aircraft.

    The A320 Family features cabin interiors with increased overhead storage, reduced noise and ambient lighting options.
     
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