Last Friday, Boeing Co. (NYSE: BA) won a large contract to supply a number of long-haul, wide-body aircraft to American Airlines Group Inc. (NASDAQ: AAL), beating out its main rival Airbus SE (EPA: AIR) in the competition for the crucial order. In a deal valued at over $12 billion, Boeing will supply forty-seven 787 Dreamliners to the major U.S. airline. Looking to overhaul and simplify its fleet, American Airlines chose Boeing's signature aircraft over both the Airbus A350 and the Airbus A330neo.
The deal's announcement is a significant blow to Airbus and its efforts to expand its share of aircraft manufacturing for U.S. carriers. The European aircraft maker has struggled to break Boeing's strong hold on the large U.S. market, and last week's loss is the latest example of the company's woes. In a further setback, the Boeing-American Airlines deal was accompanied by the simultaneous cancellation of an earlier order for twenty-two Airbus A350s, placed by American Airlines' predecessor U.S. Airways.
Last month, Hawaiian Airlines decided to cancel an order for six Airbus A330neos, opting instead to purchase ten Boeing 787s. The airline had been Airbus's sole customer for this version of the A330neo (A330-800neo).
American Airlines announced the deal in a press release on Friday, which included a statement from president Robert Isom explaining the carrier's reasoning. "This was a difficult decision between the Boeing 787 and the Airbus A350 and A330neo and we thank both manufacturers for their aggressive efforts to earn more of American's business," said Isom. Both Isom and CFO Derek Kerr pointed to the goal of simplifying American Airlines' fleet as a major motivating factor in opting to purchase Boeing aircraft.
"Today's announcement is influenced by our goal to simplify our fleet and reduce the number of aircraft types we operate," Kerr said. "We see significant advantages to carrying common fleet types, including creating less friction in our operation when aircraft swaps are necessary, reducing inventory needs, and creating a more consistent service for customers and team members."