In its second major purchase of airliners in just over a month, American Airlines said Wednesday that it will buy up to 150 Dutch-made Fokker jets, an order that could ultimately be worth as much as $3 billion.
At the same time, the airline announced two new deals with Boeing, the Western world’s dominant airliner manufacturer, that could eventually be worth several billion dollars more.
American Chairman Robert L. Crandall said at a news conference here that the short- to medium-range Dutch aircraft will allow the airline to “economically serve the many smaller routes which support hubs at Nashville, Raleigh/Durham and San Jose.” The new two-engine planes, capable of carrying 95 passengers, will enable American to rapidly retire its fleet of older Boeing 727s and will meet the noise requirements of such noise-sensitive airports as John Wayne in Orange County and National in Washington.
American said it has reached agreement with Boeing to turn options that it had obtained earlier for the purchase of 25 757-200s and 10 767-300ERs into firm orders. The 757-200 is a two-engine, narrow-body jet. The 767-300ER, a two-engine wide-body, is the carrier’s basic international airplane.
Further, American acquired 70 additional options for either 757s or 767s, giving it a total of 85 firm orders and 85 options with Boeing, with deliveries extending into the late 1990s. The 70 new options are so-called convertible options, which American can use to buy either 757s or 767s.
$1.5 Billion in Firm Orders
Paul Karos, an airline analyst with First Boston Corp., a New York investment firm, said 757s sell for about $38 million, making the firming of the orders for 25 of the planes worth about $950 million. He estimated that 767s cost $52 million each, making the 10 new firm orders worth about $520 million. Using these figures, the total for the 35 planes would be almost $1.5 billion.
It is not possible to calculate the value of the 70 new options because it is not known how many of each type of plane American will eventually buy. But if it buys half 757s and half 767s, the order would be worth another $3.2 billion.
Crandall said American had made firm orders for 75 of the Fokker jets with options to buy another 75. On Feb. 7, American ordered eight of McDonnell Douglas’ long-range MD-11 wide-body jets, with options for an additional 42. At the same time, American took options for 100 MD-80s, another smaller plane intended to replace 727s.
Crandall said the first Fokker planes will be used to replace American’s six British-made BAE-146 planes that it acquired when it bought AirCal in 1987.
American will take delivery of 11 Fokker 100s in 1991, with 24 more to follow in 1992, 29 in 1993 and at least 11 in 1994, Crandall said. Optioned aircraft are scheduled to be delivered between 1994 and 1998, he added.
USAir, a major competitor of American on West Coast routes, has ordered 20 of the Fokker planes, and Braniff Airlines has said it will order a dozen.
The Fokker 100 has a range of more than 1,500 miles and operates at a maximum cruise altitude of 35,000 feet. It has a wingspan of about 92 feet. Each plane, analysts estimate, sells today for about $21 million.
Crandall would not disclose how much American will pay for any of the planes, saying that such transactions are “proprietary.” He added, however, that “we believe that we have acquired all these airplanes on competitively attractive terms.” He said the acquisitions “finish the task of positioning ourselves for the 1990s.”
The Fokker 100 will be powered by Rolls-Royce engines. American’s fleet is already one of the youngest in the industry, with its planes averaging 9.4 years old at the end of last year. Crandall said that with the retirement of its 727s the figure will decline to eight years by 1993.
The 70-year-old Fokker company, which was near collapse as recently as 16 months ago, said it has orders for 390 Fokker 100s, with 184 of the orders having been made in the past 30 days. The American Airlines order is the biggest in its history.
E. J. Nederkoorn, an official of the Dutch company, said its assembly lines could turn out 46 planes annually. The company was studying the possibility of a joint building venture with a number of European companies as well as with Lockheed.