UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 9, 2018
AMERICAN AIRLINES GROUP INC.
AMERICAN AIRLINES, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 1-8400 | 75-1825172 | ||
| Delaware | 1-2691 | 13-1502798 | ||
| (State or other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) | ||
| 4333 Amon Carter Blvd., Fort Worth, Texas 4333 Amon Carter Blvd., Fort Worth, Texas |
76155 76155 | |||
| (Address of principal executive offices) | (Zip Code) | |||
Registrant’s telephone number, including area code:
(817) 963-1234
(817) 963-1234
N/A
(Former name or former address if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
| ☐ | Emerging Growth Company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| ITEM 1.01 | ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT |
On April 6, 2018, American Airlines, Inc. (American), a wholly-owned subsidiary of American Airlines Group Inc. (AAG), entered into an amendment (the Amendment) to the Purchase Agreement No. 3219, dated as of February 1, 2013, between American and The Boeing Company (Boeing) pursuant to which American agreed to acquire an additional 47 Boeing 787 aircraft, consisting of 22 Boeing 787-8 aircraft (the Additional 787-8 Aircraft) and 25 Boeing 787-9 aircraft (the Additional 787-9 Aircraft and, collectively with the Additional 787-8 Aircraft, the Additional 787 Aircraft) with deliveries scheduled to commence in 2020 and continue through 2026. Pursuant to the Amendment, American also has options to acquire an additional 14 Boeing 787 family aircraft in 2026 and 2027 plus, subject to American satisfying certain conditions, options to acquire 14 more Boeing 787 family aircraft in 2027 and 2028.
American currently operates 20 Boeing 787-8 aircraft and 15 Boeing 787-9 aircraft. The Additional 787 Aircraft are in addition to 5 Boeing 787-9 aircraft scheduled to be delivered during the remainder of 2018 and 2 Boeing 787-9 aircraft scheduled to be delivered in 2019.
Boeing has committed to provide sale-leaseback financing (in the form of operating leases) for the Additional 787-8 Aircraft and backstop debt financing for the Additional 787-9 Aircraft.
American has also entered into an agreement with Boeing to defer the delivery of 40 MAX 737 aircraft, currently scheduled to deliver in calendar years 2020, 2021 and 2022, so that such aircraft are now scheduled to be delivered in calendar years 2025 and 2026.
| ITEM 1.02 | TERMINATION OF MATERIAL DEFINITIVE AGREEMENT |
American and Airbus S.A.S. (Airbus) have entered into an agreement to terminate the parties’ Amended and Restated Airbus A350 XWB Purchase Agreement, dated as of October 2, 2007 (the Airbus A350 Purchase Agreement) and cancel the parties’ obligations thereunder. Under the Airbus A350 Purchase Agreement, American was scheduled to acquire 22 Airbus A350 aircraft with deliveries commencing in 2020 and continuing through 2024. In connection with these actions, American expects to record a special charge to earnings that is not material to American’s financial position.
| ITEM 8.01 | OTHER EVENTS |
American is furnishing herewith a press release issued on April 6, 2018 by AAG as Exhibit 99.1, which is included herein, announcing certain information relating to the items described above.
| ITEM 9.01 | EXHIBITS |
| Exhibit 99.1 | Press Release of American Airlines Group Inc. dated April 6, 2018 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, American Airlines Group Inc. has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| AMERICAN AIRLINES GROUP INC. | ||||||
| Date: April 9, 2018 | By: | /s/ Derek Kerr | ||||
| Derek Kerr Chief Financial Officer | ||||||
Pursuant to the requirements of the Securities Exchange Act of 1934, American Airlines, Inc. has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| AMERICAN AIRLINES, INC. | ||||||
| Date: April 9, 2018 | By: | /s/ Derek Kerr | ||||
| Derek Kerr Chief Financial Officer | ||||||
EXHIBIT 99.1
|
Corporate Communications 817-967-1577 mediarelations@aa.com |
FOR RELEASE: Friday, April 6, 2018
AMERICAN AIRLINES EXPANDS BOEING 787 FLEET
Boeing order adds 47 replacement aircraft and simplifies overall fleet strategy
FORT WORTH, Texas – American Airlines today announced an order for 47 new Boeing 787 widebody aircraft consisting of 22 787-8s scheduled to begin arriving in 2020 and 25 787-9s scheduled to begin arriving in 2023. The 787-8s will replace American’s Boeing 767-300s, while later 787-9 deliveries will replace Airbus A330-300s and older 777-200 widebody aircraft. The entire order of new 787s will be powered with General Electric’s GEnx-1B engines.
American currently operates a fleet of 35 787s to destinations such as Tokyo, São Paulo and Paris. American will operate 89 787s once all aircraft under its previous order and the order announced today are delivered.
As part of the strategy to simplify its fleet, American agreed with Airbus today to terminate its order for 22 A350s, which was originally placed by US Airways.
“We have two excellent partners in Boeing and Airbus and our relationship with both manufacturers goes back many years. Both offer specific aircraft that provide us with the right lift on specific missions across our global network,” said President Robert Isom. “This was a difficult decision between the Boeing 787 and the Airbus A350 and A330neo and we thank both manufacturers for their aggressive efforts to earn more of American’s business. In the end, our goal to simplify our fleet made the 787 a more compelling choice.”
When compared to the aircraft they will replace, the 787 will provide the airline with improved fuel efficiency, lower maintenance costs, greater range, and an enhanced customer experience. Notably, the 787 earns American’s highest overall customer satisfaction scores among widebodies, as well as in the areas of seat comfort, carry-on storage space and in-flight entertainment.
“Today’s announcement is influenced by our goal to simplify our fleet and reduce the number of aircraft types we operate. Our prior plan would have had us operating five widebody aircraft types, and with today’s announcement we will soon reduce that to three,” Chief Financial Officer Derek Kerr said. “These new replacement aircraft are consistent with our previous plans for the size of our widebody fleet.”
“We see significant advantages to carrying common fleet types, including creating less friction in our operation when aircraft swaps are necessary, reducing inventory needs, and creating a more consistent service for customers and team members.”
As part of today’s order, American has also reached an agreement with Boeing to defer the delivery of 40 737 MAX aircraft previously scheduled to arrive between 2020 and 2022. The revised delivery schedule will better align with planned retirements of other narrowbody aircraft.
About American Airlines Group
American Airlines and American Eagle offer an average of nearly 6,700 flights per day to nearly 350 destinations in more than 50 countries. American has hubs in Charlotte, Chicago, Dallas/Fort Worth, Los Angeles, Miami, New York, Philadelphia, Phoenix, and Washington, D.C. American is a founding member of the oneworld® alliance, whose members serve more than 1,000 destinations with about 14,250 daily flights to over 150 countries. Shares of American Airlines Group Inc. trade on Nasdaq under the ticker symbol AAL. In 2015, its stock joined the S&P 500 index. Connect with American on Twitter @AmericanAir and at Facebook.com/AmericanAirlines.
###