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American Set to Return 19 Jets When Leases Up

Posted on: Thursday, 8 June 2006, 06:00 CDT

By Trebor Banstetter, Fort Worth Star-Telegram, Texas

Jun. 8--FORT WORTH -- American Airlines plans to jettison 19 of its Boeing 757 jets starting next year as the airline continues to slim down and focus on its most-profitable markets.

In a memo to employees, American executives said they would return the airplanes to lessors when the leases expire, starting in January. American acquired the planes in 2001 when it purchased TWA.

Those airplanes never quite matched the other aircraft in American's fleet. They lack amenities such as new seats, large overhead luggage bins and in-flight entertainment.

The planes also have different engines, which created additional maintenance costs.

Releasing the airplanes will save American about $50 million annually in leasing costs, according to the memo. It will also allow the airline to avoid the cost of upgrading the airplanes.

The decision to discard the airplanes even while demand for air travel rises underscores American's focus on improving productivity. For more than a year, the Fort Worth-based airline has been working to get more flying time out of each airplane while reducing or eliminating service in poor-performing markets.

Since 2003, the airline has increased the number of miles flown each day by its airplanes by about 8 percent. And on average, planes flew 79 percent full last year, compared with 75 percent the previous year.

"We see this as an opportunity to further simplify our fleet," airline spokesman Andy Backover said. "With the lease expirations coming up, it was a good opportunity."

Backover said the airline doesn't expect that the reduction in the fleet will mean cutbacks in pilots or flight attendants.

"Our operating plan is still in development, but these returns are not expected to result in furloughs," he said.

American will have 124 Boeing 757s in its fleet after the planes are returned. The airline does not plan any major acquisitions of planes until after 2013.

Shares of AMR Corp., American's parent company (ticker: AMR), rose 34 cents to close at $23.77 in trading Wednesday.

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Trebor Banstetter, 817- 390-7064 tbanstetter@star-telegram.com

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Copyright (c) 2006, Fort Worth Star-Telegram, Texas

Distributed by Knight Ridder/Tribune Business News.

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NYSE:AMR, NYSE:BA,

Source: Fort Worth Star-Telegram (Fort Worth, Texas)

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