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American Airlines reportedly in talks with Airbus on fate of wide-body jet order | American Airlines

American Airlines Group Inc. is stepping up efforts to decide if an Airbus SE A350 order still makes sense for its fleet, forcing the European planemaker to try to defend another U.S. sale of its marquee wide-body jet.

The two companies have restarted talks about a twice-delayed deal for 22 of the A350-900 planes, a person familiar with the discussions said. A predecessor airline placed the order in 2005 and got a good value on a purchase that at current prices would carry a list value of $6.8 billion. But American President Robert Isom said the modest number of jets probably isn’t suitable for the world’s largest carrier.

“I don’t like small fleets in an airline our size,” Isom told American pilots at a question-and-answer session Aug. 29, a recording of which was heard by Bloomberg News. “It’s exceptional pricing. Unfortunately, pricing is just one aspect of trying to fly something profitably.”

The review underscores the challenge for Airbus as it breaks into a U.S. wide-body market dominated by Boeing Co., at a time when carriers around the world are reining in capacity growth to ease pressure on fares. Airbus salvaged a deal last week with United Continental Holdings Inc., as the carrier switched an order for 35 of the biggest A350-1000 aircraft to 45 of the smaller -900 variant. Cathay Pacific Airways Ltd. made a similar move Wednesday on an order for six planes.

It’s too early to determine the outcome of American’s negotiations with Airbus, said the person, who asked not to be identified because the talks are private. Options include adding to the order, downsizing to a smaller Airbus wide-body such as the A330, deferring delivery again or canceling outright.

A cancellation could carry a financial penalty. Isom said the order was “an item of discussion,” without elaborating. Representatives of American and Airbus declined to comment on any talks.

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