American Airlines May Spend $2 Billion for 40 Jets

Associated Press

American Airlines reportedly will buy 40 new wide-body jets as part of a rapid-growth strategy that is taking hold just days after unions ratified new contracts with the nation's third-largest aire carrier.

The Irving, Tex.-based airline is expected to announce today that it will order the new jets valued at more than $2 billion, the Dallas Morning News reported Monday.

American Airlines officials would not comment on the report, but said Chairman Robert Crandall and other management officials will make a major announcement at a news conference to be held today in New York.

The jet purchase announcement would come two days after unions representing American's 6,000 pilots ratified a new three-year contract.

The newspaper quoted industry sources as saying the order for the planes, which would be acquired through lease-to-buy arrangements, would be for 25 Airbus Industrie A300 aircraft and about 15 long-range 767s from Seattle-based Boeing.

American now operates more than 300 aircraft. Almost half its fleet consists of DC-10 wide bodies and medium-haul MD-80s, which are made by Douglas Aircraft Co., based in Long Beach. Douglas is a unit of McDonnell Douglas of St. Louis.

The order would be the first by American with Airbus Industrie, the French-based aircraft manufacturer owned by a consortium of French, West German, British and Spanish aircraft manufacturers.

Company officials had confirmed in January that they were discussing the purchase of new aircraft with Airbus and Boeing, but said terms had not been reached with either.

Industry sources said American has been negotiating long-term leases with Boeing and Airbus that would allow it to return the aircraft on short notice. That would make it advantageous for the airline and risky for the manufacturers.

It would be the first major aircraft order for American since 1984.

Details of the new contract between American and the pilots have not been announced. The agreement was reached Feb. 20 and ratified by the union's board over the weekend, a spokesman said.

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