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American Airlines Might Buy $11 Billion in Boeing 787 Dreamliners

April 06, 2018
4 min read
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American Airlines Might Buy $11 Billion in Boeing 787 Dreamliners
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Update: Just a couple of hours after this leak emerged, American Airlines and Boeing have formally announced AA's order of 47 Boeing 787 Dreamliner aircraft.

American Airlines has been on a fleet-renewal spree over the past few years, and it may be about to add a giant new order to it.

Since 2014, the world's largest airline has taken delivery of almost 400 new aircraft, while retiring some of its oldest. This fleet renewal program has brought AA's average aircraft age down to a youthful 10.3 years, the youngest of the three legacy US airlines. But, AA's buying spree was supposed to be coming to an end. After bringing almost 100 new aircraft per year into the flock, AA is scheduled to take delivery of just 22 mainline aircraft (6 Boeing 787 Dreamliners and 16 Boeing 737 MAX) in 2018.

At AA's Media & Investor Day last September, AA executives spun the slowdown as a positive: "Fewer aircraft deliveries in future years reduces cash outflows and increases financial flexibility."

As that graphic shows, American Airlines planned to slash its Capital Expenditures ("Capex") from an average of over $5.7 billion per year from 2014-2017 to under $4 billion from 2018-2020. And, almost half of the spending in upcoming years would be in the form of "non-aircraft capex" — such as spending $1.8 billion in 2018 to make AA's economy product worse while continuing to make premium cabins and lounges better.

However, it seems that purchase slowdown might not happen at all. A tweet Friday afternoon by @StratAero unveiled potentially massive news:

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Indeed, as Google's cache captured, Boeing's homepage shortly listed this graphic announcing a massive new order of 47 new 787 Dreamliners by American Airlines:

Unfortunately, the "learn more" link was broken, so there was no additional information of what variants of the 787 Dreamliner American Airlines might be buying. However, at list prices for the cheapest Dreamliner, an order of 47 would cost over $11.2 billion. Airlines get discounts for orders of this magnitude, though.

Neither American Airlines nor Boeing would confirm the order. For now, we just have to speculate on whether Boeing unveiled an order prematurely or if perhaps the aircraft manufacturer accidentally ran an April Fools joke five days late.

Another Dreamliner order by American Airlines would make sense. According to Bloomberg, AA just ended unsuccessfully negotiations with Airbus for an additional order of A330s, which are similar in size to the 787. Plus, AA is trying to make it's fleet more efficient by focusing on purchasing more of the aircraft it already has (Boeing 737s and Airbus A321s) and "harmonizing" the rest of its fleet. Considering the airline has bought 42 Dreamliners so far, an additional order of 47 would be a significant doubling down on the aircraft.

If this order is confirmed, it'll be the largest order for AA since a massive purchase of 460 new aircraft in 2011. That order was split between Airbus (260 A320 family) and Boeing (200 Boeing 737s). Those combined orders were worth more than $38 billion — or more than three times the size of this rumored order. Still, this would be the largest twin-aisle aircraft order by an US-based airline in recent history.

Featured image by Mike Headley