American Airlines buys new 737s and grounds fuel guzzlers

American Airlines will buy six more Boeing 737-800s by 2010, as it readies to mothball a number of its costly MD-80s, in an overall program to control costs that have skyrocketed due to the high cost of jet fuel, the carrier reported.

The announcement seemed to be in opposition to industry observer observations that airline concerns about high fuel costs might well lead many to either defer or even cancel their aircraft orders.

Airbus and Boeing both have indicated that they expect some cancellations in their seven-year backlog of orders, but that the continued increase of worldwide air traffic and a need to replace older aircraft mean that other customers will fill the gaps made by any cancellations.

“Backlogs are at risk, but they’re more secure than the panicky headlines lead one to believe,” noted an analyst working with the Teal Group, Richard Aboulafia.

“One oddity of this fuel crisis is that some airlines with older planes have an advantage,” the analyst said. “The difference in operating costs between their old jets and new jets defrays much of the monthly cost of getting new jets.”

American Airlines owns or leases approximately 300 MD-80s, which are about 18 years old, on average. The parent company of American, AMR, had previously indicated that it would ground 30 of the aircraft when it institutes on capacity reductions this fall.

The airline will also be grounding its entire fleet of Airbus A300s, comprising a total of 34 planes – also an average of 18 years old.

www.aa.com