American Airlines is buying hundreds of new fuel-efficient jets in what is said to be the largest aircraft order in commercial aviation history.
American Airlines parent company AMR Corp (NYSE: AMR) says the "landmark" agreements with Airbus and Boeing will allow it to replace and transform American’s fleet of narrow-body aircraft over five years and solidify its fleet plan into the next decade.
Under the agreements, American will buy 460 narrow-body, single-aisle aircraft from the Boeing 737 and Airbus A320 families beginning in 2013, with an option to purchase an additional 465 planes.
The new aircraft will be about 35% more fuel-efficient than narrow-body planes currently in the fleet. New engine options and upturned wing tips called sharklets (on the Airbus models) will help reduce operating and fuel costs, giving the company greater financial flexibility.
Also, in 2017, American will begin taking delivery of "next generation" narrow-body aircraft that are expected to further accelerate fuel-efficiency gains by another 15-20%.
Airbus and Boeing have committed a combined $13 billion in lease financing to fully cover the first 230 planes.