American President Robert Isom said, “I don’t like small fleets in an airline our size,” The Airbus deal could go large, but having a Boeing Order Book representing a possible 94 wide bodies, remains skeptical for any additional A-350's. The American Airline's wheeler and dealers say they have a place for the A-350 in its fleet. An often used ploy for incentivizing price reductions with both mega builders of air frames.
American Airlines has its needed goals and objectives in a secret place. If Airbus would just give away its airplanes then a deal would be made with the airline.
It would be easy to cancel its options for 52-787's, but a move in that direction may cost American Airlines (dollars lost) from breaking up its commonality efficiency with Boeing.
On the other hand Airbus cancellation penalties exists for any order cancelled from the airlines order of 22 A-350's. American Airline is less interested in having a big mixed fleet than just a small fleet of anything, so the stakes rise for both makers.
By this time American has worked out several scenarios.
- One, in which what it would cost American cancelling the Airbus order?
- Second, a mixed fleet cost of operations can have a big financial impact.
- Finally, going all-in on with Boeing or Airbus is in its objective goals.
American now knows the cost of cancellations, and that will probably cost them the equivalent of one or two aircraft delivered. Boeing may cover the cost of the Airbus penalty with the remaining 52 on option. In fact, American Airlines may find a lessor in a sell lease back arrangement thus avoiding an Airbus cancellation penalty and utilizing 22 of the A-350 over time as a fleet supplement until all 787's are delivered going forward. Point number one above is a "bite the bullet" moment and American is seeking the least financial impact during its continued negotiations with Airbus.
The American Airlines president has essentially stated, American is a "Big One Fleet" airline company casting a light on cancelling the Airbus order, and it is already positioned for having a Big Boeing Fleet inventory. The negotiation with Airbus could be taken for minimizing its cancellation penalty from the Airbus maker.
Going all-in is the obvious outcome as American has already set up a massive 787 fleet in the books and it would be an efficiency drag to its operation having the A-350 in operation, where the 787-9 and 787-10 could do the job well if the 787-10 is ordered by American after these negotiations.
Expect another loss for Airbus where some A-320 single aisle are parleyed into any remaining Airbus deal, as a face saving announcement. The talks will continue during the balance of 2017. Any book changes will occur during the first of 2018. Boeing is too embedded into American Airline's DNA. I can say this because I'm retired 😊!