American Airlines serial leaker JonNYC has been sharing speculation that the airline could announce an order for Airbus A321XLRs at the Paris Air Show, which runs later this month June 17-23. Bloomberg has just now confirmed discussions between American and Airbus about the aircraft.

UNCONFIRMED

hearing from multiple angles that an AA order for the A321LR is imminent, potentially at the Paris air show.

UNCONFIRMED

— JonNYC (@xJonNYC) May 31, 2019

American needs a Boeing 757 replacement aircraft, the ‘middle of the market’ plane as it’s known that can carry a smaller number of passengers fuel efficiently across medium-range distances. American disclosed plans to get down to 24 Boeing 757s.

Typically 757s are often found running thinner European routes, such as New York to Edinburgh or Birmingham in the U.K.. They could also supplement existing widebody service with a second flight when there’s not enough demand for a second widebody. The 757 does sometimes have challenges flying Westbound from Europe in winter against the winds, which is why United was often said to operate focus cities at Goose Bay and Gander.

The A321LR is capable of flying East Coast – Western Europe, but the XLR adds about 500 miles of range — making it possible to fly routes like Chicago – Frankfurt though there’s a weight/passenger tradeoff, you get more passengers in a typical domestic layout than with premium cabin seats. The XLR should solve the winter Westbound weather challenges for flights between secondary Western European cities and Philadelphia.

American Airlines Airbus A321 at New York JFK

American Airlines has been facing a depressed stock price, hovering around 5 year lows, and one of the principle complaints of investors has been their high capital expenditures. They have ordered a lot of aircraft, and they’ve continued to add widebodies and regional jets to their order book.

Thus I have to imagine that if American were to order A321XLRs — the long range variant of the A321 — that they would swap existing orders of aircraft for these planes. So far American has only taken delivery of a handful of the 100 Airbus A321neos that they have on order.

Jon suggests two interesting things about the aircraft,

• That they would be “based out of PHL/JFK for secondary Europe.”

• And that “these would be equipped with lie-flats and all-aisle-access”

Both of these things surprise me. Philadelphia is American’s European gateway. They connect traffic through Philadelphia and can make more European cities work with connecting traffic than they can with just the local New York market. They’ve largely backed away from competing in New York. They no longer use JFK as a connecting hub, and they don’t serve very many international destinations either.

New York JFK Terminal 8 Art Installation

American has just completed their plan to go ‘all Boeing 777’ on their New York – Europe and South America flights. Obviously this would be a shift away from that plan, although it never made much sense to constrain themselves to only fly to European destinations they could successfully serve with their largest aircraft.

American has been bulking up on routes like New York JFK – Richmond, Virginia with nothing productive left to do with their JFK slots and a need to squat on them. This summer they get waivers from actually using many of their JFK slots due to runway construction. Neither Delta nor JetBlue took an axe to their schedule, but it let American stop flying routes like New York JFK – Baltimore.

American Airlines Aircraft at New York JFK

The Airbus A321XLR looks like a great aircraft and could be a good solution for the airline. If they really did outfit it with lie flat seats with direct aisle access in a narrowbody, something akin to what they have in first class on their Airbus A321T aircraft, this would be a very interesting premium product.

When Jon dropped this rumor I assumed that the front cabin would be fitted with Diamond business class seats that American has had on their 757s, and has in their A321T aircraft for business class. That’s because they can fit 4 seats per row, rather than just two.

American Airlines Diamond Business Class Seats, Airbus A321T

I do not have information on this rumor myself, however it is certainly an intriguing option — especially if it meant moving away from ‘all 777 at JFK’ to run more international flights, becoming more aggressive in the New York market.

I’ve long thought that failing to serve the needs of New York customers was a mistake if only from a co-brand credit card perspective. They need flights to pitch the card. They need flights so that New Yorkers see good options for redemption. And they need scale in New York to compete for the spend of New Yorkers, since selling miles to banks is the driver of their profit.