Who knew, and not any hints of leak regarding 787-9's. Finally, they ordered the inevitable. I can't get the press releases on here, hopefully the next poster can and will.
787's and a profit
- Thread starter IORFA
- Start date
Hopeful
Veteran
- Dec 21, 2002
- 5,998
- 347
LGA Fleet Service
Veteran
Absent the sale of American Beacon the loss was $360 Million,Q3 fuel costs up $1.1 Billion YOY.
RASM up 10.9% is good.
Interesting they were able to secure financing for 737's considering the credit market is still frozen for the most part.
I wonder if the 787 will be painted gray like the repairbus was early in its career.
RASM up 10.9% is good.
Interesting they were able to secure financing for 737's considering the credit market is still frozen for the most part.
I wonder if the 787 will be painted gray like the repairbus was early in its career.
AA has liquid collateral. Financing was never a problem. I am however, shocked at the number in the order.
Perhaps now Boeing will snap-2 and build the damn thing.
The following is re-printed from forwarded emails
THE PRESS RELEASE:
Today American announced it will enter a purchase agreement with Boeing to acquire 42 fuel-efficient Boeing 787-9 Dreamliners, with rights to acquire up to 58 additional 787 aircraft.
"Even as we battle the challenges of volatile and historically high fuel prices and serious economic uncertainty, we must continue to carefully invest in our company for the long-term benefit of our shareholders, customers, employees and the communities we serve," CEO Gerard Arpey said. "The 787 will help reduce our fuel and maintenance costs, lessen our impact on the environment and support our goal of providing industry-leading products and services over the long haul."
Arpey went on to say the agreement to purchase the 787s is the latest example of AA's efforts to build a successful, competitive airline for the long-term while continuing to work to overcome the many immediate challenges facing the entire airline industry. The agreement would support American's wide-body replacement as well as the international growth that is expected after American, British Airways and Iberia achieve antitrust immunity and implement a joint business agreement for flights between North America and Europe. (An application for antitrust immunity is pending with the U.S. Department of Transportation).
The aircraft purchase agreement is an investment in the future of American Airlines – and one that is essential for positioning AA for success. The agreement also allows for significant flexibility to manage AA's fleet plan to meet the needs of our business.
Delivery Schedule
The Initial 42 Boeing 787-9 aircraft is scheduled for delivery beginning in September 2012 and ending in 2018. The 58 additional 787 aircraft may be scheduled for delivery beginning in 2015 and ending in 2020.
The 787 purchase agreement contains provisions that would allow AA to choose not to acquire some or all of the 42 initial 787s if it has not reached a satisfactory agreement with the Allied Pilots Association to operate the aircraft. The company must notify Boeing of its intent to purchase a 787 at least 18 months prior to a scheduled delivery date. While there can be no assurances, AA expects to reach such an agreement with the APA prior to the first notification date.
AA announced previously that it will take delivery of 76 more-fuel-efficient Boeing 737-800 aircraft in 2009 and 2010 as it replaces its narrow-body MD-80 fleet.
About the 787-9 Dreamliner
The 787-9 is designed to carry up to 290 passengers. With a range capability of up to 8,500 nautical miles, it is expected that the 787-9 could operate on every route American serves today, while offering potential to support new routes if business conditions warrant. The company has not decided the specific cabin configuration or engine type and is in the process of determining which wide-body aircraft the 787 would replace.
See Jetnet for:
787 Fact Sheet and Video
Q&A on the 787 purchase agreement
********************************************
The Employee Schmooze:
---A MESSAGE FROM CEO GERARD ARPEY---
Today we reported a third quarter profit of $45 million. This result includes a number of special items, including a $432 million gain from the sale of American Beacon Advisors. Excluding these one-time items, we posted a $360 million loss during the quarter. During the same period a year ago, we earned a profit of $175 million - which means our results deteriorated, year over year, by more than half a billion dollars. That dramatic swing was driven by a weakening economy and the spike in oil prices which caused us to pay $1.1 billion more for fuel than we did a year ago.
In recent weeks, oil prices have fallen, and that is good news. However, despite the drop, oil prices are still higher than they were a year ago, which is clearly not good news. Moreover, oil's fall in price is a by-product of the chaos in the financial markets and the uncertain outlook for the economy. I know a lot of you are following the turmoil on Wall Street with concern, if not alarm, and wondering what it means to you and our company. From our company's perspective, this turmoil creates two major challenges. First, the flow of credit - a commodity every bit as vital to the economy as oil - has slowed to a crawl. While we would prefer to pay cash for everything we need, to run the airline properly - which includes investing in its future - we need access to the capital markets. The freezing of the debt market is impacting not only us, but consumers and businesses everywhere.
And that leads me to our second big challenge, the growing likelihood of a serious economic downturn. I know everyone understands the relationship between a healthy economy and the demand for air travel. As we head into 2009, we need to prepare for the reality that people and businesses may be less willing or less able to spend money on air travel than they have been.
While there are good reasons to be concerned, bear in mind we have some important things going for us, including our much-improved balance sheet. As you know, for the last several years we have worked very hard to reduce our debt and bolster our cash reserves.
As we have said many times, the health of our balance sheet is not an abstract accounting concept - it is, rather, a reflection of our ability to reduce risk, weather storms and invest in our future. The progress we have made together in recent years has positioned us to continue to move forward, despite the turmoil in the capital markets. We have recently increased liquidity (cash) by selling American Beacon, issuing stock, and by raising $720 million using aircraft currently in our fleet as collateral. We also secured financing for 20 of our 2009 737 deliveries, and backstop financing that can be used for additional 737s to be delivered in 2009 and 2010.
While the economic situation in the short term is very serious, I want to emphasize that we remain focused on our long term objective - to position American Airlines as a leading global transportation company. That's why, as we navigate our way through today's challenges, we are continuing to invest in our future.
We are going to need a modern, fuel-efficient fleet to compete and win in the years to come - which is why we have accelerated our fleet renewal program in recent months. As you know, we will be taking delivery of dozens of new Boeing 737 aircraft in the next two years. Today we took another very important step, announcing a deal with Boeing to take 42 of their new wide-body 787 aircraft - with deliveries to begin in 2012 - with options for 58 more. These new aircraft will replace existing wide-bodies as they retire - and, they will position us well for the growth we expect to result from the immunized trans-Atlantic arrangement we're seeking with British Airways and Iberia.
The modern fleet and global network we are building will serve us well for many years to come. But the reality today is that we are, once again, facing tough times. And there are several thoughts I hope you will keep in mind. First, while tough times may be new to the financial sector, they are nothing new to our company – we've worked our way through them before, and I'm confident we will do so again. Second, the work we've done together over the last few years has put us in a much better position to weather this current storm than would otherwise have been the case. Third, while tough choices will be required to get us through this, we continue to believe in, and are investing in, American's future. Fourth, and most importantly, tough times make it more important than ever that we take good care of every single customer we get. So, more than ever, every one of us has an important role to play as we rise to meet the challenges confronting us.
Thank you, as always, for your support and commitment to our company.
Sincerely yours,
Gerard Arpey
CEO
******************************************************
Make no mistake . . . . LABOR made this happen. Hats off to the MCI, Tulsa and Miami groups who turned the biggest profits for the company! I bow humbly to each and every employee, and I flip off the executive levels who have the consultant groups to thank for fishing their collective asses out of the fire once again.
Perhaps now Boeing will snap-2 and build the damn thing.
The following is re-printed from forwarded emails
THE PRESS RELEASE:
Today American announced it will enter a purchase agreement with Boeing to acquire 42 fuel-efficient Boeing 787-9 Dreamliners, with rights to acquire up to 58 additional 787 aircraft.
"Even as we battle the challenges of volatile and historically high fuel prices and serious economic uncertainty, we must continue to carefully invest in our company for the long-term benefit of our shareholders, customers, employees and the communities we serve," CEO Gerard Arpey said. "The 787 will help reduce our fuel and maintenance costs, lessen our impact on the environment and support our goal of providing industry-leading products and services over the long haul."
Arpey went on to say the agreement to purchase the 787s is the latest example of AA's efforts to build a successful, competitive airline for the long-term while continuing to work to overcome the many immediate challenges facing the entire airline industry. The agreement would support American's wide-body replacement as well as the international growth that is expected after American, British Airways and Iberia achieve antitrust immunity and implement a joint business agreement for flights between North America and Europe. (An application for antitrust immunity is pending with the U.S. Department of Transportation).
The aircraft purchase agreement is an investment in the future of American Airlines – and one that is essential for positioning AA for success. The agreement also allows for significant flexibility to manage AA's fleet plan to meet the needs of our business.
Delivery Schedule
The Initial 42 Boeing 787-9 aircraft is scheduled for delivery beginning in September 2012 and ending in 2018. The 58 additional 787 aircraft may be scheduled for delivery beginning in 2015 and ending in 2020.
The 787 purchase agreement contains provisions that would allow AA to choose not to acquire some or all of the 42 initial 787s if it has not reached a satisfactory agreement with the Allied Pilots Association to operate the aircraft. The company must notify Boeing of its intent to purchase a 787 at least 18 months prior to a scheduled delivery date. While there can be no assurances, AA expects to reach such an agreement with the APA prior to the first notification date.
AA announced previously that it will take delivery of 76 more-fuel-efficient Boeing 737-800 aircraft in 2009 and 2010 as it replaces its narrow-body MD-80 fleet.
About the 787-9 Dreamliner
The 787-9 is designed to carry up to 290 passengers. With a range capability of up to 8,500 nautical miles, it is expected that the 787-9 could operate on every route American serves today, while offering potential to support new routes if business conditions warrant. The company has not decided the specific cabin configuration or engine type and is in the process of determining which wide-body aircraft the 787 would replace.
See Jetnet for:
787 Fact Sheet and Video
Q&A on the 787 purchase agreement
********************************************
The Employee Schmooze:
---A MESSAGE FROM CEO GERARD ARPEY---
Today we reported a third quarter profit of $45 million. This result includes a number of special items, including a $432 million gain from the sale of American Beacon Advisors. Excluding these one-time items, we posted a $360 million loss during the quarter. During the same period a year ago, we earned a profit of $175 million - which means our results deteriorated, year over year, by more than half a billion dollars. That dramatic swing was driven by a weakening economy and the spike in oil prices which caused us to pay $1.1 billion more for fuel than we did a year ago.
In recent weeks, oil prices have fallen, and that is good news. However, despite the drop, oil prices are still higher than they were a year ago, which is clearly not good news. Moreover, oil's fall in price is a by-product of the chaos in the financial markets and the uncertain outlook for the economy. I know a lot of you are following the turmoil on Wall Street with concern, if not alarm, and wondering what it means to you and our company. From our company's perspective, this turmoil creates two major challenges. First, the flow of credit - a commodity every bit as vital to the economy as oil - has slowed to a crawl. While we would prefer to pay cash for everything we need, to run the airline properly - which includes investing in its future - we need access to the capital markets. The freezing of the debt market is impacting not only us, but consumers and businesses everywhere.
And that leads me to our second big challenge, the growing likelihood of a serious economic downturn. I know everyone understands the relationship between a healthy economy and the demand for air travel. As we head into 2009, we need to prepare for the reality that people and businesses may be less willing or less able to spend money on air travel than they have been.
While there are good reasons to be concerned, bear in mind we have some important things going for us, including our much-improved balance sheet. As you know, for the last several years we have worked very hard to reduce our debt and bolster our cash reserves.
As we have said many times, the health of our balance sheet is not an abstract accounting concept - it is, rather, a reflection of our ability to reduce risk, weather storms and invest in our future. The progress we have made together in recent years has positioned us to continue to move forward, despite the turmoil in the capital markets. We have recently increased liquidity (cash) by selling American Beacon, issuing stock, and by raising $720 million using aircraft currently in our fleet as collateral. We also secured financing for 20 of our 2009 737 deliveries, and backstop financing that can be used for additional 737s to be delivered in 2009 and 2010.
While the economic situation in the short term is very serious, I want to emphasize that we remain focused on our long term objective - to position American Airlines as a leading global transportation company. That's why, as we navigate our way through today's challenges, we are continuing to invest in our future.
We are going to need a modern, fuel-efficient fleet to compete and win in the years to come - which is why we have accelerated our fleet renewal program in recent months. As you know, we will be taking delivery of dozens of new Boeing 737 aircraft in the next two years. Today we took another very important step, announcing a deal with Boeing to take 42 of their new wide-body 787 aircraft - with deliveries to begin in 2012 - with options for 58 more. These new aircraft will replace existing wide-bodies as they retire - and, they will position us well for the growth we expect to result from the immunized trans-Atlantic arrangement we're seeking with British Airways and Iberia.
The modern fleet and global network we are building will serve us well for many years to come. But the reality today is that we are, once again, facing tough times. And there are several thoughts I hope you will keep in mind. First, while tough times may be new to the financial sector, they are nothing new to our company – we've worked our way through them before, and I'm confident we will do so again. Second, the work we've done together over the last few years has put us in a much better position to weather this current storm than would otherwise have been the case. Third, while tough choices will be required to get us through this, we continue to believe in, and are investing in, American's future. Fourth, and most importantly, tough times make it more important than ever that we take good care of every single customer we get. So, more than ever, every one of us has an important role to play as we rise to meet the challenges confronting us.
Thank you, as always, for your support and commitment to our company.
Sincerely yours,
Gerard Arpey
CEO
******************************************************
Make no mistake . . . . LABOR made this happen. Hats off to the MCI, Tulsa and Miami groups who turned the biggest profits for the company! I bow humbly to each and every employee, and I flip off the executive levels who have the consultant groups to thank for fishing their collective asses out of the fire once again.
I had no doubt that eventually the 787s would be arriving - the only issue was "how". That "how" could have been by the purchase of another airline with orders for it - that was my bet.
It would be interesting to know the configuration/avionics packages of the 78s ordered and how it compares to those ordered by British Air or Iberia.
It would be interesting to know the configuration/avionics packages of the 78s ordered and how it compares to those ordered by British Air or Iberia.
777 fixer
Veteran
- Jul 21, 2004
- 4,792
- 912
"The 787 purchase agreement contains provisions that would allow American to choose not to acquire some or all of the 42 initial 787s if it has not reached a satisfactory agreement with its pilots union to operate the aircraft. American must notify Boeing (BA) of its intent to purchase a 787 at least 18 months prior to its scheduled delivery date, with the first scheduled delivery date occurring in September 2012."
Nice try at dangling the carrot, AMR!!
It could be a kite as far as I'm concerned. Until we get a contract we deserve, they can cancel all the orders they want. History has proven that when AMR needs a new aircraft, they'll get one. The pilots' contract is a non-issue, and we are not tempted. End of story.
Flame away, management lackeys!
FUPM!!!
Nice try at dangling the carrot, AMR!!
It could be a kite as far as I'm concerned. Until we get a contract we deserve, they can cancel all the orders they want. History has proven that when AMR needs a new aircraft, they'll get one. The pilots' contract is a non-issue, and we are not tempted. End of story.
Flame away, management lackeys!
FUPM!!!
Congrads on the order! I was surprise considering I thought that they would wait until the agreements are inked. Now let's hope APA and AA can iron something out.
As I read it, this is AMR telling all three labor groups the company can live with the status quo of the expired (or expiring) contracts.
That "number" ain't on the ramp yet - we'll see.
Re: getting the 787 built - my personal belief is the problems were too great to address with assemblers waiting for parts.
I believe Boeing literally bought themselves some time from their union's International to address their production problems with the 787. While "working out the bugs", Boeing and their suppliers saved a ton of bucks in wages.
AMR having this type of "partnership" with the TWU makes that scenario very believable. All that remains is an appropriate amount of time must pass before voting and ratification of a new contract; perhaps the "talking again" is no more than a charade to add drama.
I believe tfc767 is right - they're dangling a carrot. I hate to tell the management, but they've dug up a turd instead.
TIME FOR CHANGE
Veteran
IIRC they did something similar with the MD-80's during the B-Scale negoations, that they would get 20 but replaced them 1 for 1 with the 727-100's. We all know what happeend with that.
MCI transplant
Veteran
- Jun 4, 2003
- 5,311
- 587
<_< ------ Wing, "Hat's off to MCI"?------ Right! Over 460 some are going out the door as we speak! The rest, probably by Jan, 2009! Arpy and Co. showing their appreciation!! :down:
I didn't get that. We are going in for "intensive" negotiations in early December so hopefully that will produce something that doesn't stink line you know what.
At any rate, I can't wait to get my hands on one of these birds.
I took it like the company knows the contract doesn't expire and they can live with what's in place now and will only offer worse terms. In times past, they'd wait until the contracts were settled until spending a bunch of money.
Regardless, all this is made possible by the dues we pay each month to our company union.
... but a plastic airplane? Oh well ...
"I don't care if it rains or freezes," ...
Ernie Marrs
