Thursday, September 17, 2009

American Adding First-Class Cabins on CRJ-700s

American Airlines said today that its subsidiary American Eagle plans to add a first-class compartment on its fleet of 25 CRJ-700 regional jets and that it plans to order another 22 of the 70-seat regional jets from Bombardier, with delivery starting in mid-2010.

Here's some background on the CRJ-700 airplane.

The move is part of a shift by American to concentrate more on feeding business-travel traffic to and from hubs in Dallas, Chicago, Miami and New York and to "eliminate unprofitable flying," as American put it, by reducing service in other markets, including St. Louis and Raleigh-Durham.

In a conference call this morning with stock-market analysts, American executives also said that the company had raised nearly $3 billion in new liquidity. The money was raised partly by hocking airplanes, including:

--A sale-leaseback arrangement with GE Capital Aviation for previously ordered Boeing 737s ($1.6 billion). American also agreed to buy GE engines for its on-order new Boeing 787s.

--A loan from GE Capital Aviation for $280 million secured by certain aircraft owned by American ($280 million)

The rest of the money ($1 billion) comes from a new deal for the advance sale of AAdvantage miles to American's Citibank affinity-card partner, which in turn uses the miles to promote the credit card.

In the call, Gerard Arpey, the CEO, said that American's focus on bolstering the hubs with 70-seat regional jets newly outfitted with first-class cabins (he did not specify what the exact configuration would be between coach and first)is "the cornerstone of our network going forward".


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