American Airlines is buying 15 more Embraer EMB-175 76 seat regional jets.
American Airlines EMB-175 Operated by Republic
These aircraft will go to American Airlines wholly-owned regional carrier Envoy Air (formerly American Eagle) and are expected to be delivered starting in 2020. Likely for reasons of fleet commonality and price they did not opt for the potentially more comfortable E-2 variant of the plane.
With a list price of $705 million for these aircraft it’s a closer guess that American is paying half of that.
American Airlines EMB-175 Operated By Republic in Miami
One of the things depressing American Airlines stock is their huge capital expenditures. While Delta invests in refurbishing older planes American has been buying new.
Cranky Flier dismisses this as the fault of prior management but in the spring ordered 47 Boeing 787s, picked up used Airbus A319s, picked up Bombardier CRJ-900s and picked up Embraer EMB-175s as well and that wasn’t current management’s first order of planes.
@Gary: You can get an E175 for $10m list! What list – Craigslist?
They are quoting me $45m on Embraer’s list.
Not only is the E175-E2 more comfortable (?), its fuel burn is 17.3% lower than for the E190 up from 16% predicted, range increased by 750 nmi (1,390 km) from hot-and-high or short runways: 1,600 or 2,200 nmi (3,000 or 4,100 km) from Mexico City or London City, and noise margin to Stage 4 is 3 EPNdB better than specification at 20 EPNdB. (From Wikipedia) In other words, it’s a much, much better plane. If I had been Grand Master Parker, I would have opted for the E2 for all the above reasons, price breaks notwithstanding…
Gary: Scratch that. It is 15 jets. OK.
Of course AA would order the less comfortable model. Why would anyone think otherwise?
AA is loudly and clearly telling passengers it doesn’t care about them. Go fly Delta or United instead.
Just be glad they are ordering ERJ-175s instead of terrible CRJs.
The E2 too heavy to operate as Express/Connection/Eagle of the US3 under their current scope clauses anyway. If they ordered it, mainline would have to operate it.
Of course management has strategic reasons to order aircraft, but those are all reasonable and required for one reason or another. For example, the 787 order you cite did three things – it replaced the A350s on order, it provided a replacement for the aging 767s, and it gave fleet commonality.
Previous management placed the order for nearly 500 narrowbody aircraft, and that’s what has put the biggest burden on the capex.
Also, why not order the E2? Because it weighs to much and is not allowed to be operated by regionals per the scope clause.
The E2-175 is too heavy and violates scope clause.
Brett,
LUS had aircraft orders too. They cancelled the A350 as you observe. American wasn’t completely locked into all the orders on the books and LUS management also knew about all of the orders when they did the deal
Of course there are reasons to order more planes, though I’d probably take issue with the decision for 788s and they had the option to invest in the 763s instead. Pushing those out of the fleet leaves them without low cost long haul equipment to use experimenting with new routes, which has been core to their route network strategy the past couple of years and has found quite a bit of success in Europe for them.
And while there are reasons to keep buying, American’s operating margins are lower today than in 2013 even though fuel is LESS expensive than it was then. Blaming LAA management for decisions made six years ago, whitewashing the choices of current management, is a real stretch.