American May Place Big Jet Order Deal With Boeing Hinges On Pilots Approving Contract
American Airlines wants to buy more than 100 new jets from Boeing Co., but is insisting that pilots ratify a new contract before the carrier refurbishes its fleet, sources said Wednesday.
The Allied Pilots Association board approved a tentative four-year contract by a 10-8 vote on Wednesday and will submit it to the carrier’s 9,300 union members, union spokesman Gregg Overman said.
Sources told The Associated Press, speaking on condition of anonymity, that the jet deal includes firm orders for 12 Boeing 777 wide body jets, about 75 Boeing 737s and smaller numbers of the company’s 767 and 757 jets. American was expected to announce the deal - worth as much as $6 billion - today.
Robert Crandall, chairman of American parent AMR Corp., has said the airline wanted to wait for approval of a new pilot contract before committing to a new airplane order. The company had been describing its fleet plans as “modest,” particularly in comparison to the $20 billion in orders placed in the late 1980s.
But American’s plans appear to contradict Crandall’s earlier statements that he didn’t plan to buy new planes for the carrier’s domestic fleet, where the 737s would likely be used.
A press conference is scheduled this morning at one of the carrier’s hangars at Dallas-Fort Worth International Airport, but company officials would not comment on the reason for the gathering.
Boeing officials would not comment, saying it customarily waits for its customers to announce any purchases.
A source close to the deal said the precise number of jets American would buy was still uncertain.
The 737 is seen as a replacement for American’s aging fleet of 727 jets and a potential replacement for the MD-80 jets it bought in the 1980s.
The 727 aircraft must either be replaced or equipped with expensive mufflers to meet federal noise requirements. They also have three engines and need three pilots, while the newer jets would lower fuel and labor costs because they need only two engines and an equal number of pilots.
The 757 and 767 aircraft would allow the carrier to make modest expansions in its profitable long-haul domestic and international operations.
Many of the new Boeing jets would replace older planes from McDonnell Douglas Corp.
The development is the latest in a string of bad news for McDonnell Douglas. Last weekend, the company was eliminated from a Pentagon competition to build a new fighter plane for the U.S. military. The company also recently scrapped plans to build a new long-range jet, saying the costs of developing the aircraft made the project too risky.
American will pay Seattle-based Boeing a deep discount off list prices. The agreement gives American flexibility to buy the jets at a set price when they are needed, rather than a more rigid delivery schedule.
American is selling most of its long-range McDonnell Douglas MD-11 jets to Federal Express and looking at retiring its Boeing 727 jets.
The expansion of American’s fleet also would mean advancement opportunities for pilots and is a strong incentive for the airline’s pilots to approve a contract they have resisted.