American Airlines makes largest airplane order in history

Jeremy Hobson Jul 20, 2011
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American Airlines makes largest airplane order in history

Jeremy Hobson Jul 20, 2011
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JEREMY HOBSON: In just the last hour, American Airlines announced the largest aircraft order in history. It’s buying 460 new planes. But, they won’t all be made by Boeing. Which has for the last 15 years had an exclusive deal with American Airlines. The order will be split between U.S.-based Boeing and its European rival Airbus. Let’s find out what’s going on from Seth Kaplan of the industry publication Airline Weekly.

He’s with us from Fort Lauderdale. Good morning.

SETH KAPLAN: Good morning Jeremy.

HOBSON: So American Airlines has exclusively been a Boeing customer for 15 years why this change?

KAPLAN: Well, they want a lot of new airplanes, in particular they want some fuel-efficient airplanes to replace some of the airplanes that are getting up there in years. Airbus is offering a new engine option for it’s older A320. Same airplane but new engines that are going to to be a lot more efficient and American is very interested in that.

HOBSON: So it actually makes more financial sense for American to buy all new fuel-efficient aircraft to save money on fuel?

KAPLAN: Just as more fuel-efficient cars right now are actually more expensive — to burn less gas you’re going have to pay more up front for a car — well it’s the same with airplanes. American is going to have to pay a lot more for these airplanes than it would for less fuel-efficient airplanes, so whether or not in the long run it will save money, that we’ll see. But certainly if fuel prices stay high, it will have been relatively smart to have gone ahead and purchased the more fuel-efficient planes.

HOBSON: What is it that Airbus is doing that Boeing isn’t doing?

KAPLAN: Boeing has been thinking about whether to actually build a whole new airplane which would likely be even better than what Airbus is offering right now — but for now Airbus has at least updated the engine — airlines are saying well that’s better than nothing, we need more fuel-efficient planes and these in fact are more fuel-efficient than anything else that’s on the market.

HOBSON: Seth Kaplan of Airline Weekly, thanks so much for joining us.

KAPLAN: Thank you.

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