Carrier Finally Commits To Big Dreamliner Deal... Sort Of

A long-expected order announcement from American Airlines, stating the carrier plans to purchase as many as 100 Boeing 787-9 Dreamliners, came to fruition Wednesday... but the order is far from a done deal.

Under terms of the agreement, American would take delivery of its first 787 in 2012, against a 42-plane initial order. Those deliveries would run through 2018; American also has purchase rights for another 58 planes as needed, with those deliveries starting in 2015 and ending in 2020.

Gerard Arpey, CEO of American parent AMR Corp, said the Dreamliners would be used to bolster the airline's widebody replacement efforts and add to its international fleet, particularly as the airline looks to significantly increase its trans-Atlantic traffic should a planned joint agreement between American, British Airways, and Iberia achieve antitrust immunity.

The 787-9 is designed to carry up to 290 passengers. With a range capability of up to 8,500 nautical miles, American expects the 787-9 could theoretically operate on every route the airline serves today, while offering potential to support new routes if business conditions warrant.

Addressing the somewhat curious timing of the order announcement -- it came on the same day American posted a $360 million loss, excluding special items, in the third quarter of 2008 -- Arpey said the airline must still plan for the future.

"Even as we battle the challenges of volatile and historically high fuel prices and serious economic uncertainty, we must continue to prudently invest in our Company for the long-term benefit of our shareholders, customers, employees and the communities we serve," Arpey said. "The 787 will help reduce our fuel and maintenance costs, lessen our environmental impact, and support our goal of providing industry-leading products and services over the long haul. Fortunately, our agreement with Boeing, our long-time partner, allows for significant flexibility to manage our fleet replacement and growth plans in the way that best meets all of our stakeholders’ interests."

Flexibility does appear to be key to American's planned purchase... as the agreement contains provisions that would allow the airline to opt out of all or part of the initial 42-plane deal, "if it has not reached a satisfactory agreement with its pilots union to operate the aircraft," according to a statement from the airline.

As such, the orders have not been placed firmly into Boeing's production schedule; a caveat states American must notify Boeing of its intent to purchase a 787 at least 18 months prior to its scheduled delivery date, with the first scheduled delivery date occurring in September 2012. American also has yet to decide on a specific cabin configuration, or even an engine type for its 787s.

In that sense, even the initial "firm" orders appear to be little more than a highly-glorified letter of intent... but Boeing, perhaps looking for any good news it can report as the manufacturer's production lines sit idle due to a protracted machinists strike, offered measured enthusiasm for American's announcement.

"American Airlines' endorsement of the 787 Dreamliner, after American's many years of study, attests to the airplane's technological advances and ability to contribute to a carrier's bottom line," said Ray Conner, vice president of Sales, Boeing Commercial Airplanes. "We look forward to working with American Airlines to bring these newest airplanes into American's growing fleet of Boeing airplanes."

FMI: www.aa.com, www.boeing.com