Aerospace & Defense

Boeing Reportedly Beats Airbus for American Airlines Order

Before American Airlines Group Inc. (NASDAQ: AAL) merged with U.S. Airways, the latter company had ordered 22 dual-aisle Airbus A350 passenger jets. After the merger, American, long a top Boeing Co. (NYSE: BA) customer, decided to review the order for the legacy Airbus jets and consider the newer Airbus A330neo and the Boeing 787 Dreamliner.

According to a report from Bloomberg late Friday, American has selected the 787 to replace the inherited order for 22 A350s. The airline has delayed delivery of the A350s twice, once in 2016 and again last year, a reasonably sure sign that the order would be canceled. For the record, American denies that it has made a final decision between the A330 and the 787.

Bloomberg reported that Airbus officials said Friday that negotiations with American have ended because the company could not match Boeing’s price. The 787-9 has a list price of $264.6 million, compared to a list price of $284.6 million for the Airbus A350-900, although American’s price for either plane likely would have been discounted by about 50%.

American will have received 40 of its 42 ordered Dreamliners this year, and the airline has an option on another 52. The airline’s fleet currently includes 24 smaller A330s and it did not believe that adding 22 of the larger A330-900s would be profitable. American has apparently decided that the 787 is a cost-effective replacement for its older Boeing 767s and 777s.

The A330neo has struggled with stubborn problems with its geared turbo-fan engines. The single order Airbus had for the A330-800 was canceled by Hawaiian Airlines earlier this year in favor of Boeing’s 787.