Airbus Woos American Airlines With New Jet in Deja Vu for Boeing
With the proposed A321XLR, Airbus is seeking to steal customers from a distracted Boeing.
(Bloomberg) -- With the aerospace industry’s biggest annual trade expo approaching, Boeing Co. is hearing echoes of a sales debacle eight years ago that helped give rise to the 737 Max -- the airliner currently grounded after two deadly crashes.
At the 2011 Paris Air Show, Airbus SE was successfully coaxing American Airlines to make its first jet purchase from the European planemaker in decades. Blindsided, Boeing shelved planning for a new narrow-body plane in favor of a quicker upgrade that became the Max.
Fast forward to 2019, and Airbus is again in talks with American -- this time for a longer-range version of its largest-single-aisle jet, a plane that is likely to be unveiled at this year’s Paris exhibition. With the proposed A321XLR, Airbus is seeking to steal customers from a distracted Boeing after executives postponed a decision on an all-new model for middle-distance routes while they deal with the Max crisis.
American is taking a hard look at the XLR, whose redesigned center fuel tank would give it the range to cruise easily between central Europe and the U.S. heartland, people familiar with the matter said. While American and Airbus don’t have plans to announce an agreement this month in Paris, aircraft deals can sometimes come together quickly, one of the people said.
Airbus and American declined to comment.
Influential Buyer
American, the world’s largest airline, is one of a handful of carriers whose fleet decisions will play an outsize role as Airbus and Boeing vie for dominance in a midsize segment that overlaps the biggest single-aisle and smallest twin-aisle aircraft.
India’s IndiGo, British Airways owner IAG SA, JetBlue Airways Corp. and serial airline entrepreneur David Neeleman have already expressed interest in the XLR.
By formally committing to move ahead with the XLR, Toulouse, France-based Airbus would have a chance to clip potential sales from a twin-aisle airliner family contemplated by Boeing. The Airbus plane wouldn’t be available until 2023 or 2024 because of production constraints unless customers converted existing A320neo-family orders to the XLR, the company said this week.
Boeing has put product-strategy decisions on the back burner as executives focus on returning the 737 Max to flight as a worldwide grounding nears the three-month mark. Executives have maintained that their proposed new twin-aisle plane could still begin commercial service by 2025, even though they don’t expect to decide whether to proceed with the program until next year.
The potential new offering is nicknamed the “797” by analysts and known within the company as the “NMA,” for new mid-market airplane. U.S. carriers such as American, Delta Air Lines Inc. and United Continental Holdings Inc. -- with large fleets of Boeing’s mid-range 757 and 767 jetliners -- have been viewed as flagship customers for the new jet family.
Aging Planes
American sees the XLR as a potential replacement for its aging fleet of 34 Boeing 757-200 jets, said the people familiar with the discussions, who asked not to be named because the talks are private. While the Fort Worth, Texas-based carrier has modernized much of its fleet, its 757 planes have an average age of 19 years.
There’s no guarantee that American will order the XLR, the people said.
If American takes the XLR, one question is whether the company would place a new order or convert some existing Airbus orders to the longest-range variant. The carrier still has 100 Airbus A320-family jets on order, according to American’s 2018 annual report.
A month after the 2011 air show, American bought its first Airbus planes since 1987. But Boeing salvaged a piece of the action with its decision to drop plans for an all-new single-aisle aircraft and instead build a simpler upgrade with new engines, which became the 737 Max.
In the end, American announced a 460-plane deal that included the updated versions of the A320 and the 737.
To contact the reporters on this story: Julie Johnsson in Chicago at jjohnsson@bloomberg.net;Mary Schlangenstein in Dallas at maryc.s@bloomberg.net;Benjamin Katz in London at bkatz38@bloomberg.net
To contact the editors responsible for this story: Brendan Case at bcase4@bloomberg.net, Susan Warren
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