New A321s Ordered

[rjh]

could'nt this just simply be streamlining the orders into 1 (set of) agreement(s) with US/HP and AB?? I mean they are to become one airline eventually, right???

Maybe there is some financial advantage in doing this - why does it have to be in an effort to screw an employee group...

Some people think that every decision made is an effort to screw the employees

 

[DCAflyer]

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Item 1.01 Entry into a Material Definitive Agreement.

On August 24, 2006, America West Airlines, Inc. ("AWA") and Airbus S.A.S. ("Airbus") entered into Amendment No. 16 to the A319/A320 Purchase Agreement between AWA and Airbus, dated as of September 12, 1997 (the "AWA Purchase Agreement"), adding a firm order for seven A321-200 model aircraft. In addition, Airbus granted rights to AWA to convert orders for one A320 aircraft and seven A319 aircraft to orders for A321 aircraft. The seven incremental A321 aircraft will be delivered beginning in 2008. Deliveries of the eight converted A321 aircraft may begin in 2009.

In addition, on August 24, 2006, AWA and Airbus entered into Amendment No. 14 to the AWA Purchase Agreement, and Airbus and US Airways, Inc. ("US Airways") entered into Amendment No. 17 to the A319/A320/A321 Purchase Agreement between Airbus and US Airways, dated as of October 31, 1997 (the "US Airways Purchase Agreement"). These two amendments transfer the purchase of 19 A320 family aircraft from the US Airways Purchase Agreement to the AWA Purchase Agreement.

On August 24, 2006, AWA and Airbus also entered into Amendment No. 15 to the AWA Purchase Agreement. Amendment No. 15 extends to 2008 and 2009 certain of AWA's conversion and cancellation rights previously in effect with respect to 15 A318 aircraft.
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So it appears that US Group now has no Airbus narrowbody orders - those were added to the HP order. Just wondering why they did it this way instead of transferring the HP orders to the US Group order.....

Jim

Jim,

It's late and I'm tired, but I had some, albeit fatigued, thoughts on all of this.

Tell me first, though, how many firm orders/options did US (East) have on the 320 family A/C? Do these amendments effectively transfer all of the 320 family orders from East to West?

I have't figured out how this could balance out, but is it a coincidence that the seven new 321 firm orders and the conversion of the eight 319/320 orders to 321 equals 15, and 15 is the number of 318s that AW had on order (for which it apparently extended cancellation and conversion rights)? Could it be that Airbus was pressing AW on the 318s, and since we all know that there is no plan for US to ever fly those things since we'll have the much-preferred 170/190/195, Doug decided to convert and place new orders for the 321 in exchange for giving him leverage on the 318s?

With Airbus's problems (350 and 380 situations) doesn't it make sense for Airbus to throw us a bone, by transferring all narrow body orders to the most favorable contract, especially given our patience with the 350? (And perhaps in exchange for a "gentlemens agreement" that we, for the time being, won't look at the 787?)

For Airbus's part, transferring orders to the contract with the most favorable terms may have made sense in order to get the number of deliveries in 2008 and 2009 up for accounting, shareholder reporting, or even PR reasons.

If we are going to have two engine types on the Airbus narrow bodies (and we obviously will!) doesn't it make sense to at lease fit the new 321's with CFM engines, to at lease keep that model consistent?