AA accelerates fleet renewal

Airlines has said that it has accelerated its fleet renewal plan by beginning the
replacement process for a portion of its MD-80 fleet.The Company said that
the decision also provides it with substantial fleet flexibility in the
  Following approval by AMR’s and American’s Board of Directors, American
has notified The Boeing Company of its intent to begin pulling forward the
delivery of 47 Boeing 737-800 aircraft under a previously existing purchase
commitment. American initiated this process by notifying Boeing that
American will take delivery in early 2009 of three of these aircraft
previously scheduled for delivery in 2016. American intends to continue
pulling forward deliveries of the other aircraft from their current
2013-2016 delivery schedules into the 2009-2012 timeframe.
  American emphasized, however, that any decisions to accelerate aircraft
deliveries will depend on such factors as future economic and industry
conditions and the financial condition of the Company.
  “We believe that beginning to replace some of our MD-80s in a measured
way makes economic sense and represents prudent and strategic reinvestment
in our business that will bring long-term benefits to shareholders,
customers and employees,” said AMR Chairman and CEO Gerard Arpey. “Our
existing agreement with Boeing gives us ample flexibility for our long-term
fleet plan. While the MD-80 remains an excellent aircraft that serves us
and our customers well, the new 737s will be a great addition to our fleet
that will lower our operational costs, boost the fuel efficiency of our
fleet and also bolster our efforts to lower emissions and noise levels.”
  Arpey noted that American’s long-term purchase contract with Boeing
gives the Company substantial fleet flexibility and includes the right to
purchase on short notice additional 737s well beyond the 47 committed
aircraft as well as the right to purchase 787 aircraft.
  He also stressed that the purchase contract with Boeing gives American
the ability to obtain the 47 aircraft and additional 737 aircraft with a
delivery schedule that best meets the needs of the business, without having
to make large firm delivery commitments at a specific time, and that
American’s “purchase rights” give it the ability to acquire such additional
aircraft from Boeing with as little as 15 months notice.
  Arpey cited American’s plan to replace some of its MD-80s with 737s as
the latest example of the Company’s efforts to reduce operating costs and
fuel consumption. American estimates that the 737 consumes 25 percent less
fuel per available seat mile than an MD-80.
  Arpey also stated that American has a goal to improve the fuel
efficiency of its fleet by more than 20 percent by 2020, and he emphasized
that today’s announcement is a step toward achieving that objective.
  The effort to improve fleet fuel efficiency is a part of a companywide
initiative to reduce fuel consumption to both lower costs and reduce
emissions. In addition, as part of its Fuel Smart program that has reduced
the Company’s consumption of jet fuel by about 95 million gallons annually,
American continues to add winglets to its 737 and 757 fleets and is also
saving fuel by employing high-speed tractors to tow airplanes on the ground
and by taxiing aircraft with a single engine when feasible. American has
set a goal in 2007 to increase Fuel Smart annualized consumption savings to
125 million gallons.
  “Strengthening our balance sheet remains a high priority and an
important element of building a stronger financial foundation under our
Turnaround Plan,” Arpey said. “Our announcement today shows that we are
taking action to strike the right balance between reinvestment in the
business and the need for continued financial improvement. As we continue
to improve our financial performance we will have more flexibility to
reinvest in the business for the future.”