American ends lease deal with Airbus for A320 family deliveries

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American Airlines has ended a lease deal with Airbus for 62 A320 family aircraft, as it focuses on debt financing new aircraft deliveries.

The aircraft are part of an order for 130 A319s and A321s that pre-merger American placed in 2011. Airbus subsequently agreed to lease the aircraft to the carrier while it operated under Chapter 11 bankruptcy protection.

American merged with US Airways in December 2013.

Airbus had sold 61 aircraft with the leases attached to lessors and investor funds by March, Doug Greco, vice-president of sales finance at Airbus Americas, told Flightglobal at the International Society of Transport Aircraft Trading (ISTAT) Americas conference that month.

“We’ve been very, very successful,” he said on the aircraft sales.

Delivery of the purchased aircraft will begin in the first quarter of 2015 and continue through the third quarter of 2017, according to an investor update from American today.

American is likely to finance these aircraft with either bank or capital markets debt, based on previous comments by management.

“In a lease versus buy decision, it’s [solely] a financial decision,” said Derek Kerr, chief financial officer of the airline, in March. “The market for EETC [enhanced equipment trust certificate] or bank financing is a little bit better now.”

American will have leased 25 A319s and about 30 A321s from Airbus by the end of 2014, and 68 in total before it begins buying the aircraft.

Separately, American will remove an additional 15 Embraer ERJ140s from its regional fleet for a total reduction of 40 aircraft during 2014. This is due to the decision by its partner Republic Airlines to retire the type.

The carrier anticipates having 34 ERJ140s in its regional fleet at the end of 2014, all of which will be operated by American Eagle Airlines.

With the additional reductions, American’s regional fleet will now grow by just one aircraft to 559 during the year. It previously expected an increase of 16 aircraft.

American has reduced its regional available seat miles (ASM) guidance by 2.3 percentage points to a 1% increase in 2014, according to the investor update.