Boeing vs Airbus over AA order!

[fltguymk]

http://us.rd.yahoo.com/finance/external/bloomberg/SIG=13cgf3tm9/*http%3A//www.bloomberg.com/news/2011-07-19/american-airlines-s-management-lean-toward-airbus-wsj-says.html?cmpid=yhoo

And now this from Boeing. They will re-engine the 737 fir AA!

http://finance.yahoo.com/news/Boeing-offers-to-reengine-737-rb-2582890559.html?x=0&.v=1

 

[damajagua]

AA to split order between Airbus & Boeing

http://us.rd.yahoo.com/finance/external/tsmfe/rss/SIG=131pium41/*http%3A//www.thestreet.com/_yahoo/story/11190664/1/american-to-split-aircraft-order-report.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA

 

[Birdman]

I thought AA learned its lesson years ago with the A-300 and Fokker that it was not cost effective to diversify its fleet. Parts availability was low and costs were high. What is different now?

 

[midnights]

I thought AA learned its lesson years ago with the A-300 and Fokker that it was not cost effective to diversify its fleet. Parts availability was low and costs were high. What is different now?

This time upper managment REALLY knows what they're doing?

 

[FWAAA]

I thought AA learned its lesson years ago with the A-300 and Fokker that it was not cost effective to diversify its fleet. Parts availability was low and costs were high. What is different now?

You would have thought so, but perhaps Arpey doesn't remember that lesson.

Many mechanics on this website complain (rather loudly) that Arpey and the others are just beancounters. If a simpler, less diverse fleet (like the all-Boeing fleet AA has been developing) is the cheaper, more efficient way to run an airline, then wouldn't this be one area where Arpey and the other Beancounters should shine?

 

[Bob Owens]

It doesnt matter, they will just pass the penalty by having an inefficient structure on their employees.

 

[Frank Szabo]

Amen, Bob.

 

[eolesen]

If true, I'm disappointed, but let's not lose sight of the fact that Boeing's shown a complete lack of urgency in addressing the 737 re-engining and a replacement. That's not Arpey or anyone at AA's fault.

You also can't fault management for taking advantage of Airbus on the pricing if it means the MD80's go away sooner.

 

[Frank Szabo]

If true, I'm disappointed, but let's not lose sight of the fact that Boeing's shown a complete lack of urgency in addressing the 737 re-engining and a replacement. That's not Arpey or anyone at AA's fault.

You also can't fault management for taking advantage of Airbus on the pricing if it means the MD80's go away sooner.

There's got to be a reason GE has the 737 market tied up as it does - probably through financing agreements.

From what I've seen and been told by those who work on the motors, a good deal of the engine is throw-away - use and scrap it as there's not much left after running up the hours.

I've not seen any info on the Pratt motor Scarebus is pushing in this regard but do know a planetary gearbox is hell for stout and the design will do away with the LP/N1 longshaft connection. Interesting.

The comparable Rolls entry is scary re: the design. Too much to go wrong and too much to replace if something did break, it would seem.

Seen any in-depth info, Mr. E?

 

[Buck]

From the Dallas Morning News

American Signs Sale-Leaseback Deal

American announced an agreement with AerCap to sell 35 Boeing 737-800 airplanes to the Dutch aircraft leasing company and then lease them back. It does add nine airplanes to American's order book with Boeing, either as firm orders or purchase rights. American said the deal covers 26 jets it had previously ordered and three additional jets on firm order, plus purchase rights for six more Boeing 737-800s for delivery in 2013-2014. American is replacing its 140-seat McDonnell Douglas MD-80s with 160-seat Boeing 737-800s, a much more fuel efficient airplane. As of March 31, American operated 219 MD-80s to 152 737-800s. But by sometime next year, the number of 737s will exceed the number of MD-80s as more Boeings arrive and more MD-80s are parked.

 

[star power]

I heard from Walt and he said it will be a split order, 150 Boeing B737-923ER back by Boeing through BCC for 20 yrs lease. 150 Airbus A321-214 back by Airbus through AFS for 20 yrs lease. the deliveries are to be around 50 frames each per year each starting Jan 01, 2012. Both Boeing and Airbus will be giving AMR a line of credit and DIP if needed and a agreement at All 300 Boeing and Airbus aircraft in this order will remain with AA operation or what ever AMR decide to do to their operation and Boeing will agree that All Boeing 737-823 will remain with AA operation or what ever AMR decide to do to their operation if a Pre-package BK is needed. AMR is trying to get Boeing and Airbus to work with GE/CFM to get them on board with the CFM56 engines to protect these new Boeing/ Airbus order aircraft engines along with the current Boeing B737-823 engines and spares engines. either with a line of credit, a DIP, or a power by hour agreement or a combine mega agreement with all three with GE/CFM. AMR is re-questing that Boeing and Airbus be their sole parts and spare parts provider, etc. APUs, electrical control boxes, FMC,ADRIU, etc. computers, hydraulic pumps, window and windshields, pneumatic air valves, fuel pumps, flight control actuator, landing gears and /or components, if a Pre-package BK is needed.

 

[eolesen]

I wonder how much of the split order was AA hedging its bets on the competing engine designs... If one falls behind, they can likely cancel orders and chase the surer deal.

The other thought I had was operating costs... the 320 is cheaper for shorter hauls, so if it replaces MD80's on the shortest hauls, that leaves the 73NGs better positioned to backfill older 752s and maybe 762s.

May have to break down and listen to the earnings call to see what added color they add.

 

[Frank Szabo]

I heard from Walt and he said it will be a split order, 150 Boeing B737-923ER back by Boeing through BCC for 20 yrs lease. 150 Airbus A321-214 back by Airbus through AFS for 20 yrs lease. the deliveries are to be around 50 frames each per year each starting Jan 01, 2012. Both Boeing and Airbus will be giving AMR a line of credit and DIP if needed and a agreement at All 300 Boeing and Airbus aircraft in this order will remain with AA operation or what ever AMR decide to do to their operation and Boeing will agree that All Boeing 737-823 will remain with AA operation or what ever AMR decide to do to their operation if a Pre-package BK is needed. AMR is trying to get Boeing and Airbus to work with GE/CFM to get them on board with the CFM56 engines to protect these new Boeing/ Airbus order aircraft engines along with the current Boeing B737-823 engines and spares engines. either with a line of credit, a DIP, or a power by hour agreement or a combine mega agreement with all three with GE/CFM. AMR is re-questing that Boeing and Airbus be their sole parts and spare parts provider, etc. APUs, electrical control boxes, FMC,ADRIU, etc. computers, hydraulic pumps, window and windshields, pneumatic air valves, fuel pumps, flight control actuator, landing gears and /or components, if a Pre-package BK is needed.

This, if true, is exactly as expected, ie, the specter of a Chapter 11 filing is addressed finally.

The direction is rather evident now - let's hope a bankruptcy judge will nail the frat brats' hides to the barn door, even in a prepackaged deal which now seems immanent.

I'm sure every business contract has provision for bankruptcy in one way or another but this seems to be a little more detailed than others.