American Airlines is preparing to borrow $1.325 billion against new aircraft deliveries, and against 15 older aircraft. Approximately $947 million is allocated to the 22 new or recently delivered aircraft; about $377 million against 15 existing Airbus A321s and Boeing 777s. The filings around this debt issuance shares a good bit about the airline’s fleet plan.
| Aircraft | Number | Delivery |
| A321neo | 9 | July 2026–February 2027 |
| A321XLR | 5 | September 2026–January 2027 |
| A321-200 | 13 | Delivered 2013–14 |
| 777-300ER | 2 | Delivered 2013–14 |
| E175 | 8 | September–December 2026 |
American’s June fleet included five Airbus A321XLRs. Five more are scheduled between September and January, meaning the XLR fleet should roughly double to ten if deliveries hold. One is due in September, one in November, two in December and one in January.
Eight Embraer E175 regional jets are scheduled by December. American will own them and lease them to their wholly-owned subsidiary Envoy Air for American Eagle operations.
Comparing the transaction with the airline’s SEC 10-Q filing, it finances 20 of American’s 26 remaining 2026 scheduled deliveries: 12 of 15 Airbus aircraft and eight of 11 E175s, plus two early-2027 Airbus deliveries.
All 20 Boeing 777-300ERs are undergoing major cabin retrofits. The first retrofitted aircraft are about to enter service – that means no more first class, but more business class including the new business class suites with doors as well as improved premium economy. These planes are expected to remain in service into the late 2030s.
American’s 218 Airbus A321-200s are expected to remain in the fleet into the 2030s and, in some cases, the 2040s.
The debt issuance is preliminary and we don’t yet know the interest rates and offering prices so we can’t yet determine what sort of premium American may have to pay to borrow. But the expected ratings of this debt are A/A- for the senior tranche and BBB/BBB- for the junior tranche. That’s because they’re backed by valuable collateral (the planes) not merely the airline’s general credit. American itself remains speculative grade at an S&P B+.
It is also the second large aircraft-backed financing in three months. An April transaction raised $1.141 billion. The earlier deal priced at 5.25% for Class A and 5.75% for Class B.
American has a 373-aircraft orderbook. They’re expected to place an additional order for widebody aircraft soon. However, American’s fleet strategy is more “premiumize and extend” than “replace.”
- Retrofit the 777-300ER fleet.
- Retrofit the Boeing 777-200 and Boeing 787-8 fleet.
- Keep A321-200s productive into the 2030s and 2040s.
- Add premium-heavy XLRs for thinner long-haul routes.
- Expand dual-class E175 flying in small and medium markets.
- Finance deliveries with secured borrowing rather than consuming liquidity.
American would argue they already have a relatively young fleet compared to Delta which flies ancient birds. United does, too, but that’s changing. And the airline needs a capital-efficient approach given its financial underperformance. They broke even last year and the median of their forecast is to break even again this year though revenue has been growing rapidly in line with the industry as a whole. In the second quarter interest expense was about equal to operating profit ($409 million vs. $446 million).
Five additional Airbus A321 XLRs should provide aircraft for more premium transcontinental and European flying, including to more transatlantic destinations. The 777-300ER will have the same business class as new-delivery Boeing 787-9Ps.
But many more passengers will be flying on regional jets – American’s regional flying totaled 57 million passengers in 2025, with 42% connecting to or from mainline flights (so a majority on regional-only). Its regional fleet now has 508 dual-class jets and 71 single-class jets, versus 238 dual-class and 328 single-class aircraft in 2014. That’s an improvement!
What’s the saying, ‘gotta spend money to make money,’ or, in this case, gotta borrow money to…
Only part-kidding. Profits aren’t everything. AAL can take a short-term hit for a long-term play. And, honestly, their pivot to premium isn’t too bad. I’ve enjoyed the new Flagship Suites on 789P, and looking forward to trying them out on the XLR later this year. Of course, those swivel chairs on the 773 will be missed, but having 80+ J on the refurbished cabins will be impressive. Got some nice Team USA co-branded mirch as an amenity kit on my last flight. (And now… for the naysayers…)
AA is simply not generating the cash to renovate its existing fleet and buy more aircraft w/o going in more debt.
And AA’s mainline fleet is only marginally newer than DL’s which is newer than UA’s.
AA has the lowest total fuel efficiency of the big 3 because of their excessive use of regional jets so their excess number of RJs are a drag from a fuel efficiency standpoint but they also depress their yields because they have too many hubs chasing too many connecting passengers with too small of a presence in major markets.
“And AA’s mainline fleet is only marginally newer than DL’s which is newer than UA’s.”
Marginally = 0.4 years and newer = same age, but a couple of days ago it didn’t matter. Too funny.
Next year Delta will have the oldest of the Big 4 fleets by a large margin.
All of these refurbs will take years. It will be 2030 at least until they are all complete. Sadly, AA won’t be able to make up ground at that pace.
@Mikey B — Ya know, we could say the same about DeltaOne refurbs, and some folks certainly like to whine about the 763, etc., with the older cabins (I know I have at times). But, these airlines do actually get it done, eventually. United had that awful 772 with the rear-facing 2-4-2 ‘Polaris.’ Thankfully, those are mostly gone, now. Give it time. 2030 will be here before we know it.
Sorry, the 2-4-2 in 772s was never Polaris and is limited to hub to hub and Hawaii. Nice try though.
@rebel — Oh, right, right.. not ‘marketed’ as “Polaris” so technically not, but… once those cabins were retrofitted and now that United includes Polaris lounge access… miraculously, same aircraft, now called… (say it with me) “P-O-L-A-R-I-S”… (I’m assuming this is where you say ‘Econ 101,’ then repeat some silly ad-hominens. I am sooo ready for that. Lay it on me. Make them spicy!)
“Oh, right, right.. not ‘marketed’ as “Polaris” so technically not”
Glad we agree. It was never Polaris.
doesn’t matter what it is called, it is an inferior product. just the equivalent of two 739s using the same wing.
and fleet age doesn’t matter, rebel. In fact, you can’t admit that UA is rapidly loading up on debt just as Kirby did at AA even as it increasingly gets limited in its ability to grow.
What does matter is the ability to use those assets effectively and DL by a wide margin outperforms AA and UA in financial metrics related to fleet.
Let’s not forget that UA has tried twice in the past year to snap up AA and DL – a pretty bold admission that it cannot cost effectively build what Kirby has said UA would do and which actual data shows is increasingly being proven to be true.
AA has a revenue, debt, and a cost issue.
UA has an ego issue on top of a failure to recognize years ago what mattered and start building toward that reality when it was financially feasible.
@Tim Dunn — You’re welcome for that layup.
@rebel — We agree UA’s 772’s rear-facing 2-4-2 made Delta’s 763s with 1-2-1 look great.
What’s amazing is how much faster UA has grown in ten years.
Fleet size 2016/2026:
UA: 737/1,122 +385/52%
DL: 832/1,004 +172/21%
But UA has also paid down so much more debt that their net leverage is the same ≈ 2.0.
Airline: DAL/UAL
Debt: $21.1b/$33.7b
Cash: .$4.7b/$16.6b
Net D:$16.4b/$17.1b
And the deal UA got on the 600 Covid aircraft were so good that those deliveries will be accretive paying UA dividends for years to come. UA is over 40% larger internationally than DL with 57 more wide body aircraft currently and 130 new ones coming in the next five years compared to just 54 for DL. The 787-10 is perfect for Europe, and UA will have 75 of them before DL gets its first in 2031. Domestically, UA will be upgauging dramatically and retiring 100+ aircraft by YE2027. 1,000 aircraft with Starlink by YE2026 and all the wide body aircraft before next summer. Times are great at United.
They can recoup that money from the premium flyers they want to target.
How is this aircraft financing done in previous years and compare to other airlines debt raises
Funny how a financing of aircraft that all airlines do is portrayed as ominous for AA
rebel,
this article is about AA which is just a model of where UA will be in a few years.
Not surprising since Kirby was solidly behind AA’s fleet decisions around a decade ago.
feel free to let us know what other carriers got their order books for. The discounts that UA is getting are because of Boeing delivery compensation delays.
and DL is and will be paying far less for engine maintenance – more than offsetting whatever savings you think UA has. Not only has Airbus been giving DL sweetheart deals but DL has far more cost-effective and capable aircraft.
DL is carrying full bellies out of HKG on their 359s that can outcarry UA’s 789s every day and twice on Saturdays. You will be shocked at how much more revenue DL can carry on a smaller fleet – in fact, you can see that right now because that is the advantage DL already has – it is just getting bigger.
You never did demonstrate an ability to focus on the right subject if it meant admitting someone else had an advantage
“AA which is just a model of where UA will be in a few years.”
More wishful non-thinking.
“DL is carrying full bellies out of HKG on their 359s that can outcarry UA’s 789s every day”
Apparently not.
Q2 2026 Pacific
ASM/PRASM/Yield/Load factor (% growth YOY)
UAL: 4.1/14.0/10.9/2.3
DAL: 8.0/7.0/7.0/-1.0
Ouch!
AA’s Flagship suites is a solid premium hard product laid low by inconsistent-to-poor soft product.
Shiny planes can only offset so much ham-handed operational practices and deeply disgruntled workforce.
More debt? Smh
AA is cooked. They may as well start sourcing some very nice knee pads and gifts for Chump they’re going to need them when they ask him for a bail out in 2 years.
you truly don’t know the difference between cargo and passenger data, rebel?
DL’s cargo revenue grew at 39% last quarter compared to 22% for UA.
The A350’s much greater cargo lift than the 787-9 will do that for you even if you don’t even know what data to look at.
and, yes. Ralph, AA is so far behind the 8 ball that you have to wonder if they can recover – but they sure as heck keep trying.
And Boeing and Airbus will keep selling or leasing planes to them and finance companies will accept their debt payments.
and that is AA”s problem – it benefits everyone including employees, local economies that are stimulated, and suppliers and finance companies – except the shareholders.
and the employees have no incentive to fix their performance culture and mgmt gives them no reason to do so
This thread is a perfect example of everyone being half right.
Pitflyer asked the right question, which is how this compares with prior deals and other carriers, so here is the answer nobody gave: April’s deal covered 32 ships and priced inside initial guidance on both tranches. That is what demand for well-structured airline paper looks like. The investment-grade ratings on this kind of debt come from machinery the post does not get into: Section 1110 repossession rights, cross-collateralization across the pool, senior loan-to-value of roughly 60%, and a liquidity facility covering three successive semiannual interest payments if the airline stops paying. The Big Three and other major U.S. carriers have used this market for decades. United’s 2024-1 covered 48 ships. So no, the instrument itself is not ominous. A routine EETC is hardly a distress signal.
That said, Tim’s underlying point about American’s cash generation is directionally correct. The collateral mix is relevant, even if it does not prove financial necessity by itself. Mortgaging incoming deliveries is standard treasury management. Reaching back to pledge more than a dozen mid-teens-vintage ceos and two 777s means American is monetizing dry powder that had previously been left unencumbered. There is a benign reading, since secured aircraft debt is comparatively cheap money for a B+ credit. But the broader context makes the transaction more noteworthy than it would be at a stronger carrier. Net income fell 88% year over year in the June quarter, compared with declines of roughly 25% and 17% at the other two. The first half closed with a net loss of more than $300 million, even after the seasonally strongest quarter, and Fitch had gross adjusted leverage at 6.5 times entering the year. The deal is routine. American’s financial circumstances are not as comfortable as those of its principal competitors.
On fleet age, rebel is right that the gaps among the Big Three are economically modest, but the argument itself is a dead end. Fleet age by itself is more of a consumer talking point than a useful economic metric. What matters is where each airframe sits on the ownership, maintenance, fuel-efficiency and residual-value curves. A debt-free ceo with V2500s has known shop-visit costs, mature dispatch reliability and no aircraft debt service. The V2500 is a three-decade-mature program, and its maintenance behavior and cost drivers are exceptionally well understood. A new neo comes with financing costs and depreciation. American’s neos use CFM LEAP engines, so the Pratt & Whitney GTF problems are not the relevant comparison here, but LEAP time on wing and durability still have open questions of their own. To everyone reading the 2040s retirement horizon as a confession of weakness, it is not. Extending mature aircraft is rational fleet planning, and it conserves capital at the same time. Those are not competing explanations. And read the language in context. It appears in an offering document marketed to bondholders taking mid-teens-vintage collateral, so it is a residual-value representation as much as an operating plan.
On HKG, you two are talking past each other. Tim, PRASM is passenger-only by definition, so belly cargo does not rebut rebel’s table. It changes the subject. Rebel, your own numbers complicate your conclusion. Delta grew Pacific ASMs at nearly twice United’s rate, and faster capacity growth puts downward pressure on year-over-year unit revenue, all else equal. That table therefore reflects two different capacity and network decisions at least as much as it measures two products. Tim may be right that an A350-900 can offer greater belly-cargo capability than a 787-9 on certain missions, but actual uplift out of a cargo-heavy station depends on stage length, configuration, passenger load, baggage and operating weights. Cargo is also a single-digit share of system revenue at both carriers, so it settles nothing by itself.
Gary’s premiumize-and-extend framing is the correct read of the filing, and it is a coherent playbook for a balance sheet with less room than Delta or United to prioritize an unencumbered-asset strategy. The question his post stops short of, and that none of you has really touched, is whether coherent equals sufficient with a nearly $6 billion year-over-year fuel headwind and full-year guidance spanning a 65-cent loss to a 65-cent gain. Management still expects positive free cash flow and lower year-end net debt at the midpoint, so the answer is not predetermined. But that is the real debate. The financing structure is ordinary, but whether American’s earnings can support the strategy is not.
(Also, @1990, I am still waiting for my lick…)
@Mike Hunt.
THANK YOU. Thrilled to read an opinion of someone that actually understands the airline industry and its inner workings.
And AA’s first refurbished 777-300 aircraft #7LB (their second oldest 300) did not pass certification so it won’t go into service before September. It’s still in Hong Kong
@Mike Hunt — I’m half-way there!
That cargo increase TD is so excited about is a half of a percent the size of Q2 PRASM and UA still has 80% more cargo revenue. Woohoo!
at the rate of DL’s cargo growth, DL will close the cargo gap in a couple more years of growth esp. as the 35Ks start rapidly arriving.
Unike UA, DL’s TPAC cargo is almost exclusively carried on all new generation widebodies which means the cost to operate each flight is double digit percentages lower than UA’s which has a high percentage of 777s on its TPAC network.
let’s face it. You won’t go down easily… your paycheck is on the line. Scott Kirby just proved by his attempt to merge with AA and DL that UA can’t grow to compete with DL’s level of financial success; all the cherrypicking you do simply confirms that UA is a 2nd rate airline that can’t translate all of these “successes” you love to tout into a bottom line complete win where it matters.
The cargo numbers are system wide. If you think that increase was from a few weeks of LAX-HKG on a 359 then you are more clueless than even I thought. This reminds me of your DL MRO $1b profit prognostication. Only 10x off. This mis-extrapolation might merit the TDTT. 🙂
DL ’25 Cargo/TTL Rev: 900m/63.4b = 1.4% * 39% =0.5%. Woohoo!
2025 System cargo revenue $m
UA:1,779
DL: 900
∆: 879/900 = 98% > DL
2025 Pacific revenue $m
UA: 6,878
DL: 2,787
∆: 4,091/2787= 147% > DL
UA is over 40% larger internationally than DL with 57 more wide body aircraft currently and 130 new ones coming in the next five years compared to just 54 for DL. The 787-10 is perfect for Europe, and UA will have 75 of them before DL gets its first one in 2031. Domestically, UA will be upgauging dramatically and retiring 100+ aircraft by YE2027. 1,000 aircraft with Starlink by YE2026 and all the wide body aircraft before next summer.
I am well aware of what the cargo numbers mean as well as their context.
DL’s cargo revenues are not just because of a couple weeks of LAX-HKG but because DL completed the transition of all of their TPAC flying to A359s (except for one HND route); the 359 is simply a superior cargo aircraft to the 787 or any aircraft in UA’s fleet when costs and capability are considered.
the rest of your post – along with the inability to acknowledge that DL’s cargo revenue is growing faster than UA’s (you love to boast growth stats except when UA gets beat) is nothing more than the usual “look at how big UA is” but being incapable of translating that size into bottom line results – which IS the story of UA.
AA has the exact same story in the domestic arena – lots of size and connectivity to small and medium sized markets but completely unable to turn its advantages into bottom line results.
it speaks volumes that Kirby – after years of trashing AA – decided to call up Bobby Ice and ask for AA’s hand in merger, a complete ackowledgement that UA will never be able to obtain what AA has even if AA runs it very poorly.
And given that Scotty asked DL first and was given the same kick in the backside, Kirby is running out of options now that it is increasingly apparent that UA’s dreamy plan to grow to domestic dominance is simply not obtainable.
I called it years ago and yet you continue to argue – because your paycheck is on the line – that UA will achieve what everyone else can see is just not working at any kind of economic viability
“inability to acknowledge that DL’s cargo revenue is growing faster than UA’s”
Not only did I acknowledge it, but I put it in perspective. Another LTD straw man. Nice try though.
you cited passenger stats to talk about cargo when the difference in cargo revenue growth is more than enough to close the gap in TPAC RASM change.
You mindlessly spit out cherrypicked stats but are incapable of understanding what they mean.
So you must know what portion of the DL system cargo YOY 39% increase was attributable to their Pacific operation. What is that number & where did you find it?
in other words, you can’t deny that DL’s cargo revenue growth WAS superior to UA’s.
all you have to do to trace that number is look at aircraft changes in markets that generate high cargo volumes.
DL finished moving the 339s off the Pacific and replaced them with 359s while adding routes. It isn’t rocket science how DL has gotten its cargo revenue up.
and the bigger point is that DL continues to add new TPAC routes while the 35Ks will be in service a year from now – which means that DL’s cargo revenues will continue to grow.
as much as you think that UA has some insurmountable wall around its TPAC network, DL has found just one of many opportunities to grow TPAC revenue faster than UA or AA. given that AA and UA BOTH had A350s on order at one time, they could be doing what DL is now doing.
Where to begin?
“in other words, you can’t deny that DL’s cargo revenue growth WAS superior to UA’s.” Never did WRT Q2 ’26, but you continue to pretend that I did for some odd reason.
So you seem to be attributing the bulk of the 39% YOY system cargo improvement to the Pacific because DL just finished moving all the 330s out of the Pacific? IOW you don’t have the data to back up your assertion. Got it.
If that is the only reason then it will only improve for 12 months the A330 removals for incremental aircraft deliveries. God knows DL has been doing something wrong since they were only generating half of UA in cargo so there might be more to it that you are assuming. Regardless you are drastically overestimating the significance of cargo much like you did with MRO.
You seem incapable of understanding proportionality, trend analysis, like comparisons or simple percentages. You might want to stop pretending to be an airline ‘analyst’. It’s embarrassingly absurd.
@rebel — Easy there, bud. It’s ‘Econ 101,’ remember!
UA’s cargo revenues are so much higher than AA or DL’s because of the Pacific where cargo is a much higher percentage of revenues than over the Atlantic.
and your logic – to no surprise – is faulty about the 330 refurbs. They not only are used primarily to Europe which has much lower cargo per flight than over the Pacific but the 330CEO refurbs come as the 359 refurbs are completed – so DL is putting more cargo capable aircraft back in service on longer flights where cargo is going to be a bigger part of revenue.
As usual, you don’t understand the basic principles of business and incessantly wave your “superiority” flag based on false assumptions and arguments.
A330s carry less cargo than A359s and cargo is big in the Pacific? Next you are going to tell us the Pacific Ocean is bigger than the Atlantic. Quite the master of the blatantly obvious. If only you could get your head around the concept of a percentage and relative size. Poor LTD.
@rebel — We doin’ Geography 101, now?
“It is better to keep your mouth closed and let people think you are a fool than to open it and remove all doubt.” Mark Twain.
@rebel — “Travel is fatal to prejudice, bigotry, and narrow-mindedness”… unless, you flew on United’s 772 with rear-facing 2-4-2 ‘coffin’-seats. Yikes.
after harping incessantly about how much higher UA’s growth rates for any number of metrics, rebel simply cannot admit that DL’s cargo growth is higher than UA;s and that is likely to continue.
the fool is the one that incessantly defends something that everyone else can clearly see.
DL’s cargo business is growing faster than UA’s and it is directly tied to DL’s TPAC growth and the use of more cargo capable aircraft.
poor rebel sells his soul with every post to a corporation that doesn’t care anything about him
@Tim Dunn — Well, you’re right about one thing… corporations don’t care (So, why do certain members of certain courts keep insisting that they’re legally ‘people,’ anyway? Probably should ‘un-do’ that nonsense with like a Constitution Amendment, or, more simply, age limits, and/or expanding the Court to 13, or…)
LTD says, “DL’s cargo growth is higher than UA;s and that is likely to continue.”
If the reason is just moving the 359s to the Pacific then that YOY benefit disappears 12 months later. I suspect the reason isn’t limited to that, and LTD has provided no data to support his thesis. We do know UA has much more wide body, and larger narrow body for that matter, coming in the next five years than DL.
DL is growing its TPAC network faster than UA. Remember how you touted that UA’s RASM is higher based on lower growth?
You work so very hard to ignore the implications of the reality that you argue so much to be true.
Do you get tired of getting caught in your lies?
nowhere have I ever believed that companies care about anything other than themselves.
Nice segue. Too funny.
you mean focusing on the truth that you want to pretend doesn’t exist?
@Tim Dunn, @rebel — You two are the best. Never stop.