American Airlines puts rush on getting 737s in air

American Airlines, the world's largest carrier, is accelerating delivery of 47 previously ordered Boeing 737-800 jets by four years as it begins replacement of some of its oldest planes. But the earlier deliveries will not spur Boeing to accelerate its assembly line at the 737 plant in Renton.

"This does not affect production rates," said Boeing spokesman Randy Harrison.

Harrison said Boeing held delivery slots for American when the carrier deferred deliveries following the steep industry downturn caused by the 9/11 terrorist attacks.

The contracts agreeing to those deferrals specified dates by which the airlines needed to decide whether to completely give up the slots, he said.

American is simply reversing the earlier deferrals, said airline spokesman Andy Backover. It will now take the 737s starting in 2009, through 2012, instead of the previously scheduled —-16 timeframe.

The decision follows the carrier's return to profit in 2006 after five years of losses, and increasing pressure from fuel costs to fly more efficient airplanes.

The new jets will replace some of American's 300 MD-80s, which have an average age of 17.2 years and are the largest single jet type in the airline's 672-plane fleet.

The MD-80s burn about 25 percent more fuel than 737-800s. Spending for jet fuel, the carrier's second-largest expense after labor, rose 14 percent in 2006 to $6.4 billion.

"Beginning to replace some of our MD-80s in a measured way makes economic sense and represents prudent and strategic reinvestment in our business," Chief Executive Officer Gerard Arpey said in a statement.

When American placed a massive order with Boeing in 1996, it agreed that the U.S. manufacturer would be its exclusive supplier for 20 years. That agreement and similar ones with Delta and Continental were formally dropped a year later after objections from the European Union.

As a condition of winning approval for its merger with McDonnell Douglas, Boeing agreed "not to enforce the exclusivity provisions," according to a company statement in July 1997.

Earlier this month American's chief financial officer, Tom Horton, told analysts at a company conference that the 1996 Boeing agreement allows the carrier "a lot of flexibility to get access to airplanes at attractive prices, on relatively short notice" and that the airline is looking at near-term orders of 737-800s.

However, Horton went on to say that American is talking to both Boeing and Airbus about the next generation of single-aisle aircraft. Those replacements jets for the Boeing 737 and the Airbus A320 are expected to be delivered around 2015.

With demand for jets high, both aircraft manufacturers are under pressure to ramp up production. Boeing insists that it must do so slowly to avoid the kind of snarls that stopped assembly lines in 1997.

Airbus, in need of cash, has responded more aggressively. So far this year, it has produced an average of 30 single-aisle jets per month, against Boeing's average 25.5 jets.

Two weeks ago Airbus' John Leahy said that Airbus plans to build 36 per month.

Boeing's maximum rate is capped at 31 per month without additional investment in assembly equipment, according to internal documents obtained by The Seattle Times.

Bloomberg News contributed to this report.