American Airlines Group Inc. said it reached an agreement to
defer the purchase of 35 Airbus A320 single-aisle jetliners, a move
the carrier said will give it more flexibility in 2017 and
2018.
An American Airlines spokesman told The Wall Street Journal that
the airline still plans to take about 75 new planes in 2017 and
2018, and that by deferring the 35 A320s until after 2020, it won't
be forced to expand more than it wants. However, if demand is high
and American wants to expand more during those years, it can push
back aircraft retirements and renew leases.
In a regulatory filing, American, the largest U.S. airline by
traffic, said it would have no commitments to purchase A320s during
2017 and 2018 thanks to the amended terms, but has commitments to
acquire 25 of the A320s in 2019 and a total of 75 A320s starting in
2020.
Airbus Group SE and rival Boeing Co., the world's largest plane
makers, have enjoyed a period of record order intake for new
planes, principally their single-aisle jets, which have seen demand
fueled by the growth of low-cost carriers.
American, which merged with US Airways roughly a year and a half
ago, has been aiming to refresh the airline's aging fleet and keep
up with the competition, which is also spending big on new seats
and technology.
However, last week American lowered its outlook, while rival
Southwest Airlines Co. limited its plans to add seats, the latest
signs of weakness in an industry swelling with profits but
surrounded by investor skittishness.
Analysts and investors have been concerned that low fuel prices
that have helped buoy profits in the sector could be outweighed by
airlines oversupplying the market—a practice that has damaged the
industry's profitability in past years.
American shares fell 1.4% to $40.15 in recent trading.
Write to Tess Stynes at tess.stynes@wsj.com and Jack Nicas at
jack.nicas@wsj.com
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