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AMERICAN AIRLINES TAKES MAJOR FLEET RENEWAL STEP BY ANNOUNCING PLANS TO ACQUIRE BOEING 787-9 DREAMLINERS
Under Purchase Agreement with The Boeing Company, American Plans to Buy 42 Fuel-Efficient Boeing 787-9 Dreamliners, with Rights to Acquire up to 58 Additional 787s
While American Battles Near-Term Challenges, it will Continue to Invest in its Long-Term Future
FORT WORTH, Texas - American Airlines, Inc., a wholly-owned subsidiary of AMR Corporation [NYSE: AMR], announced today that it has entered into a purchase agreement with Boeing [NYSE: BA] under which American intends to acquire an initial 42 Boeing 787-9 Dreamliners scheduled for delivery beginning in 2012 and ending in 2018, with the right to purchase up to 58 additional 787s that may be scheduled for delivery beginning in 2015 and ending in 2020. The purchase of the initial 42 787-9 aircraft is subject to certain contingency provisions, as more fully described below.
AMR Chairman and CEO Gerard Arpey said the agreement to purchase 787 Dreamliners is the latest example of the Company’s efforts to build a successful, competitive airline for the long-term while continuing to work to overcome the many immediate challenges facing the entire airline industry.
“Even as we battle the challenges of volatile and historically high fuel prices and serious economic uncertainty, we must continue to prudently invest in our Company for the long-term benefit of our shareholders, customers, employees and the communities we serve,” Arpey said. “The 787 will help reduce our fuel and maintenance costs, lessen our environmental impact, and support our goal of providing industry-leading products and services over the long haul. Fortunately, our agreement with Boeing, our long-time partner, allows for significant flexibility to manage our fleet replacement and growth plans in the way that best meets all of our stakeholders’ interests.”
According to Boeing, the technologically advanced 787 will use 20 percent less fuel than today’s airplanes of comparable size, provide airlines with up to 45 percent more cargo revenue capacity, and present passengers with innovations including a new interior environment with enhanced air filtration, larger windows, more stowage space, improved lighting, and other passenger-preferred conveniences. To date, Boeing says it has received nearly 900 orders for the 787 Dreamliner from more than 55 customers worldwide.
The 787-9 is designed to carry up to 290 passengers. With a range capability of up to 8,500 nautical miles, it is expected that the 787-9 could operate on every route American serves today, while offering potential to support new routes if business conditions warrant. American has yet to decide on a specific cabin configuration or engine type for its 787s and is in the process of determining the specific wide-body aircraft in its fleet that the 787 would replace.
American announced previously that it will take delivery of 76 more-fuel-efficient Boeing 737-800 aircraft in 2009 and 2010 as it replaces its narrow-body MD-80 fleet.
The 787 purchase agreement contains provisions that would allow American to choose not to acquire some or all of the 42 initial 787s if it has not reached a satisfactory agreement with its pilots union to operate the aircraft. American must notify Boeing of its intent to purchase a 787 at least 18 months prior to its scheduled delivery date, with the first scheduled delivery date occurring in September 2012.
While there can be no assurances, American expects to have reached such an agreement with its pilots union prior to the first notification date.
Forward looking statements disclosure
Statements in this release contain various forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which represent the Company’s expectations or beliefs concerning future events. When used in this release, the words "expects," "plans," "anticipates," "indicates," "believes," "forecast," "guidance," "outlook," "may," "will," "should," "seeks," "targets" and similar expressions are intended to identify forward-looking statements. Similarly, statements that describe the Company’s objectives, plans or goals are forward-looking statements. Forward-looking statements include, without limitation, the Company’s expectations concerning operations and financial conditions, including changes in capacity, revenues and costs; future financing plans and needs; fleet plans; overall economic and industry conditions; plans and objectives for future operations; and the impact on the Company of its results of operations in recent years and the sufficiency of its financial resources to absorb that impact. Other forward-looking statements include statements which do not relate solely to historical facts, such as, without limitation, statements which discuss the possible future effects of current known trends or uncertainties or which indicate that the future effects of known trends or uncertainties cannot be predicted, guaranteed or assured. All forward-looking statements in this release are based upon information available to the Company on the date of this release. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.
Forward-looking statements are subject to a number of factors that could cause the Company’s actual results to differ materially from the Company’s expectations. The following factors, in addition to other possible factors not listed, could cause the Company’s actual results to differ materially from those expressed in forward-looking statements: the materially weakened financial condition of the Company, resulting from its significant losses in recent years; the ability of the Company to generate additional revenues and reduce its costs; changes in economic and other conditions beyond the Company’s control, and the volatile results of the Company’s operations; the Company’s substantial indebtedness and other obligations; the ability of the Company to satisfy existing financial or other covenants in certain of its credit agreements; continued high and volatile fuel prices and further increases in the price of fuel, and the availability of fuel; the fiercely and increasingly competitive business environment faced by the Company; industry consolidation; competition with reorganized carriers; low fare levels by historical standards and the Company’s reduced pricing power; the Companys need to raise substantial additional funds and its ability to do so on acceptable terms; changes in the Company’s corporate or business strategy; government regulation of the Company’s business; conflicts overseas or terrorist attacks; uncertainties with respect to the Company’s international operations; outbreaks of a disease (such as SARS or avian flu) that affects travel behavior; labor costs that are higher than those of the Company’s competitors; uncertainties with respect to the Company’s relationships with unionized and other employee work groups; increased insurance costs and potential reductions of available insurance coverage; the Company’s ability to retain key management personnel; potential failures or disruptions of the Company’s computer, communications or other technology systems; changes in the price of the Company’s common stock; and the ability of the Company to reach acceptable agreements with third parties. Additional information concerning these and other factors is contained in the Company’s Securities and Exchange Commission filings, including but not limited to the Company’s Annual Report on Form 10-K for the year ended December 31, 2007.
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