American Airlines to Delay Purchase of Some Airbus Jetliners -- Update

By Tess Stynes And Jack Nicas 

American Airlines Group Inc. said it reached an agreement to defer the purchase of 35 Airbus A320 single-aisle jetliners, a move the carrier said will give it more flexibility in 2017 and 2018.

An American Airlines spokesman told The Wall Street Journal that the airline still plans to take about 75 new planes in 2017 and 2018, and that by deferring the 35 A320s until after 2020, it won't be forced to expand more than it wants. However, if demand is high and American wants to expand more during those years, it can push back aircraft retirements and renew leases.

In a regulatory filing, American, the largest U.S. airline by traffic, said it would have no commitments to purchase A320s during 2017 and 2018 thanks to the amended terms, but has commitments to acquire 25 of the A320s in 2019 and a total of 75 A320s starting in 2020.

Airbus Group SE and rival Boeing Co., the world's largest plane makers, have enjoyed a period of record order intake for new planes, principally their single-aisle jets, which have seen demand fueled by the growth of low-cost carriers.

American, which merged with US Airways roughly a year and a half ago, has been aiming to refresh the airline's aging fleet and keep up with the competition, which is also spending big on new seats and technology.

However, last week American lowered its outlook, while rival Southwest Airlines Co. limited its plans to add seats, the latest signs of weakness in an industry swelling with profits but surrounded by investor skittishness.

Analysts and investors have been concerned that low fuel prices that have helped buoy profits in the sector could be outweighed by airlines oversupplying the market--a practice that has damaged the industry's profitability in past years.

American shares fell 1.4% to $40.15 in recent trading.

Write to Tess Stynes at [e-mail] and Jack Nicas at [e-mail]

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