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Simple Flying Aviation News Podcast
#289: American Airlines Raising $1 Billion For Aircraft, Air Canada's 1st Airbus A321XLR, & More
00:30:45
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- [00:05]
A
Hello, my name is Tom Boone.
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B
And I'm Channing Reid.
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A
Welcome to a brand new episode of the Simple Flying Podcast where we'll give you the lowdown on the latest news from the world of commercial aviation. Here's what we have for you this week.
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B
Coming up today, American Airlines is looking to fund new planes and refinance existing aircraft. I'll tell you just how much money it's raising just to do that. Then Tom will talk about how Air Canada is ushering in a new era with its first Airbus A321XLR delivery.
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A
Channing will explore the latest developments regarding a possible second airport coming to one of Florida's largest, while I look at whether the Boeing 777X is still on track for its highly anticipated 2027 debut.
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B
And finally, United Airlines has launched a new partnership. Find out how it will benefit its mileage plus members both in the air and on the ground.
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A
So now you know what's installed. Let's get them in the sh. Channing, you can buy American Airlines planes, or am I misunderstanding this?
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B
That would be very cool if you could. Not quite, but the airline actually is working on selling and while raising a combined $1.4 billion through the sale of aircraft backed securities, it plans to use the proceeds to fund new planes, refinance its current aircraft and support general corporate needs. That's according to a securities filings on Monday obtained by Reuters and Bloomberg. The decision comes at a time when US Airlines are cutting capacity and slashing profit forecasts as fuel prices have skyrocketed faster than demand growth. Also as American continues to receive new aircraft. The securities are a type of debt known as enhanced equipment trust certificates and the decision is claimed collateralized by 32 new and existing aircraft in its fleet. The majority portion of the planes reportedly have an average life of 7.7 years, but American has not disclosed any further details of the aircraft sales. Now the airline reported its Q1 2026 earnings, revealing a record revenue of $13.91 billion but a loss of over $380 million. Despite this, the company saw an 11% year over year revenue increase, outpacing compet. American ended the quarter with $34.7 billion in debt. That's its lowest level since mid-2015 and expects record revenue in Q2. However, jet fuel usually accounts for a quarter of an airline's operating cost. American said last week that it expects its jet fuel bill to increase by more than $4 billion this year as fuel prices have remained higher at about $4 a gallon in the second quarter. The carrier plans to use the proceeds raised debt securities to fund 17 new planes and refinance loans for 15 existing aircraft. It says its investments in premium travel, new lounges, aircraft upgrades, free Wi Fi and more are driving its growth. American is also continuing to grow its fleet. Just last week, it marked a significant fleet achievement, taking delivery of its 100th Boeing 737 Max 8 aircraft. And the achievement highlights the carrier's continued investment in modernizing its narrowbody fleet. Since then, American has taken delivery of three additional aircraft. Its 101st 737 Max 8 arrived over the weekend, while its 102nd example was delivered earlier this week. American has one more Max 8 on order and is expecting it to arrive next month. Now, on Wednesday, the airline finally received its third Airbus A321XLR after being built and stored in Europe for over a year now. The mainline fleet count currently stands at 1,027 examples. American anticipates to receive up to 18 A321XLRs this year, with eight deliveries scheduled through July, including the two remaining aircraft in storage. And it has recently announced that it's trimmed its order for the A321XLR from 50 to 40 aircraft. Overall, American expects to receive 49 new aircraft this year. And you know, Tom, we were kind of just talking about this before we came on the podcast. It's very interesting how airlines and manufacturers, for that matter, matter, are so focused on the output. Right. And getting aircraft delivered as soon as they can. It's very surprising over how many aircraft Airbus expects or projects to deliver in one month. The same with Boeing. So these airlines are continuing to get new planes. And American, of course, amid financial struggles, it needs to do what it needs to do. And in this case, it's working on selling some of these aircraft to raise that money. And this isn't brilliant, original idea. We just reported on JetBlue, I believe, doing a similar thing to raise money. All of this, I would say that it is complicated by these jet fuel prices and seeing the increase with that. But again, at the end of the day, a business is a business and it'll be very interesting to see what type of planes will exit American's fleet and see how the airline will continue to get more planes in the future.
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A
Definitely, yeah. I mean, more planes everywhere. That's the sort of thing we look for at simple flying. And I've got two stories today on more planes. A terrible segue, I know, but there's genuinely significant delivery to talk about this week, because Air Canada has finally taken handover of its first Airbus A321XLR. And for the Canadian flag carrier, it's not just another new aircraft, but it also represents a strategic pivot. So what is there to know? Well, the handover took place in Hamburg on Friday, and this is where Airbus finalizes a lot of its A320 family deliveries. It's leased from SMBC Aviation Capital and it's the first of 30 A321XLRs set to join Air Canada's fleet. Of these, 15 are leased and 15 are purchased directly from Airbus. Now, to understand why this aircraft matters so much to Air Canada specifically, you've got to think about what it actually offers. The A321XLR is a narrowbody jet or a single aisle aircraft, but it has a range of around 4700 nautical miles. This puts a huge number of transatlantic city pairs within reach. The economics of a narrowbody versus a widebody on thinner routes are also considerably more favorable, and that's the core pitch of the aircraft. So airlines can open or maintain routes where Demand doesn't fill a 787 or an A330, but a premium equipped narrowbody can still be profitable. Air Canada's Chief Commercial Officer Mark Gallardo described it as game changing. And that framing holds up when you look at the route network they've planned. The first scheduled service will launch on June 15 between Montreal and Toulouse, which fittingly is the home of Airbus. From there, the schedule expands quickly. Montreal to Berlin and then Nantes in July, Porto in August, Lyon and Lisbon in the autumn. Toronto then gets a late October surge with Manchester, Tenerife and Copenhagen all starting within days of each other. The longest route on the list so far is Toronto to copenhagen at around 3900 miles. And this has a nine hour block time on the return leg. This is actually going to replace a 7879 on the route during the winter schedule. And this is when demand drops. And you know, this is exactly what the A321XLR does. It's what it's designed for, taking over where a widebody becomes commercially difficult to justify. Now, altogether, air Canada has 14 different A321XLR routes listed for the rest of 2026 and over 1,200 scheduled flights. The early pattern is heavily Montreal centric, which makes sense given it's the airline's not just the airline's transatlantic gateway, but also its main hub in terms of HQ and all of this. But Toronto catches up fast as the winter season approaches. Cabin configuration, as we briefly discussed last week, is also worth talking about because this is where Air Canada has done something genuinely unusual for a narrowbody. The aircraft will have 182 seats in a two class layout. There's going to be 14 signature class seats and 198 economy seats. Those 14 signature class seats are lie flat on a single aisle aircraft. Now that's a first for Air Canada and it's a significant product statement. Passengers on these thinner transatlantic routes are now going to have access to a lie flat bed where previously there was either no service at all or a reclinable business seat on a widebody that's flying half empty. The cabin itself is being branded under Air Canada's new glowing hearted standard. And that design leads into Canadian identity. So think red stitching, natural wood grain, bronze accents, stone gray tones and a backlit maple leaf canopy at the aircraft entrance. And on the technology side, Both cabins get 4K OLED seats, seatback screens with Bluetooth audio, and there's USB C and AC power at every seat. Plus fast WI fi that's free for aeroplan members. So it's just over seven weeks until the first passengers are going to board. And between now and then, there's a significant amount of crew familiarization, maintenance sign off and regulatory preparation to work through before the aircraft enter scheduled service. But the delivery itself is done. And for Air Canada and the A321XLR program more broadly, this is a meaningful moment. The era of premium single aisle transatlantic flying is no longer a concept for Air Canada. It's on its way to Montreal.
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B
Very, very exciting. As you were talking about this, I was thinking, yes, the A321XLR, highly anticipated. It's exactly what airlines have been looking for for a very long time. But why didn't Boeing develop a 757neo? I feel like that would just be. I mean it could be a great competitor to the X, but it could have been developed before the XLR was even a concept. I don't know, I'm just a big Boeing 757 fan.
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A
I'm going to give you a really annoying argument and say, isn't NEO trademarked by Airbus?
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B
Okay, that's fair then. Maybe we could do 757X, I don't know. With a new engine. I don't know. That is a good point. But the 757 next generation is not a thing. That's just something from my hopes and dreams. But the realities that we have the A321XLR and that is super exciting. And I just went on Air Canada a few months ago. Fantastic experience. So I expect that the passenger experience on board those XLRs will be just as great. So very, very exciting. And it'll be very awesome to see how they will continue to pivot strategically with that new aircraft. One other city rather that is looking at a strategic pivot, if you will, is Miami, which is Florida's second largest city by population. Once a year, leaders in transportation and trade in the city, they come together to discuss the state of the ports and what the future holds. There has been this ongoing question of whether a second airport could be coming to Miami Dade County. Well, last week, the county commission moved forward with studying the possibility, warning that Miami International Airport could reach capacity within the next 15 years. And as I mentioned, this isn't a new development. This is something that actually has been going on for a couple of years now. And to accommodate that increased demand, officials in Miami Dade county are poised to move forward with plans to develop another airport to serve the metropolitan area. And commission committee leaders have pointed out that Miami International Airport's aging infrastructure suggests that a new airport could be developed with forward thinking. And this comes actually as the airport has worked on a major redevelopment, multibillion dollar redevelopment program. But again, city leaders are still focused on whether the city can accommodate and if they can build a second airport to help out with all of that capacity. So Kevin Marino Cabera is a commission committee leader in Miami Dade county and has sponsored that this whole thing, sponsoring that this whole airport, this whole idea could happen back in 2024. He said, quote, it's honestly just about forward thinking, thinking about exactly what the capacity of Miami International Airport is and how many years do we have of this capacity and what we're planning for in the future. But again, there has been this whole question over, well, why do we need a second airport if there is a multibillion dollar infrastructure improvement program? And that is known as future ready at Miami International Airport. And it's expected to renovate more than 200 restrooms, over 120 jetways and several hundred elevators, escalators and moving walkways. It also includes plans to build a new 2,240 space parking garage and a four star hotel. Now, where the potential new airport could be constructed is unknown, but Cabara said the measure tells the mayor's office to explore all locations. It's also unclear when the county could even begin developing a new airport. They would essentially need to figure out again how many years they have by examining the current capacity numbers. Now, there has been a little bit of pushback with this whole concept, and Port Miami Director CEO Heidi Webb says that building outward isn' an option. In a statement obtained by NBC 6 South Florida, Webb said, we really can't build on our island to make it bigger, but what we're doing is building vertically. These are, again, just some of the discussions highlighted at this year's State of the Ports event, which examines how the industry is adapting to growing demand and population increases and rising tourism. Miami Dade is Mayor Daniela Levine Cava emphasized the need to stay ahead, saying, quote, we have to make sure that we are that we stay not only current, but what we get, but that we get ahead. And that's why we call it future ready. So it'll be very interesting. American Airlines is the largest operator at Miami International Airport, and over the past couple of years, especially since the pandemic, the airport has had a really impressive growth in passenger traffic. Back in 2023, the airport handled more than 52 million passengers, and that growth has continued, of course. But recently the airport has recorded over 23 million international passengers, and that is based off of American Airlines presence there. It's not only Miami's largest carrier, but it's Caribbean. It uses Miami as its Caribbean and South American gateway. It funnels a lot of international passengers through there. We talked about this, I think, a few weeks ago, about how the airline is bringing back its service to Venezuela through Miami. There's a lot of chit chat about a second airport in Miami, and we'll have to continue to follow this and see where things will go. But for the time being, the airport is working on modernization projects and it's actually $9 billion. That's how much it costs to renovate some of its infrastructure. So that also includes a new Concourse K under construction that's expected to be completed by 2019, and Concourse D60. That is a $1.1 billion project that's going to break ground next year and will be completed by 2030. So a lot happening in Miami right now and we'll have to figure out or we'll have to continue to see where things will go with this. I don't know. Well, I don't necessarily see that the city needs a new airport right now, but again, in the name of future growth and passenger capacity increasing, maybe in a few years from now it will become a reality. We'll have to see what happens moving forward.
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A
Maybe it will, maybe it won't. We'll watch this space. But jumping. You know, we could take a 321XLR now from Miami to Seattle to talk about something that's going on with Boeing. Another wonderful segue, I know. But in an earlier podcast episode 283, if you're counting, I talked about Lufthansa CEO expressing confidence that the 7779 would arrive in the first quarter of 2027. Well, this week Boeing itself put this in black and white, and it's worth sort of revisiting this story because you know of what it said in its Q1 2026 results. So so Boeing has officially confirmed that the 777X program has continued to make steady progress on the 777.9 certification and that the company anticipates first delivery in 2027. For a program that's been defined by slipped timelines, paused test campaigns and regulatory friction, seeing those words in an official earnings release carries real weight. Boeing doesn't put delivery commitments in its quarterly results lightly. The certification news underpinning that confidence is concrete. In March, the FAA cleared the 7779 to begin Type Inspection Authorization Phase 4A. Try saying that 10 times quickly, but this is a significant gate in the certification process. Boeing reiterated in its Q1 update that this phase had started, and if you've been tracking the 777X test fleet on flight radar, the activity level backs that up. Three of the five test aircraft have each completed over 40 flights just this month, so the program is visibly moving. But here's the important context. Phase 4a is not the end of the road. There are still two further approval gates to clear 4B and phase 5. And this is before Boeing moves into the broader functionality and reliability testing followed by the operational proving work needed for airline service entry, including ETOPS certification on production standard aircraft. The 777X is on the back straight, but it hasn't crossed the finish line yet. And the realistic read is that most of 2026 will be consumed finishing the formal flight test phases and validating production standard jets. Now, on the topic of those early build aircraft, there is a detail here worth understanding. Boeing has assembled as many as 26 777X airframes between 2018 and 2022, and this was back when the company still verification to follow fairly quickly. Five of those are in the test fleet, the other 21 are parked at Paine Field near Seattle, and they're reportedly stored nose to tail on a Runway with engine blocks hanging from their wings. Now on paper, it looks like ready inventory, but in practice, it may not be, as we've talked about previously. Firstly, you have these brand new airplanes that are not brand new. But also Boeing learned a painful lesson from the 787 program, where early production Dreamliners have become nicknames the Terrible Teens internally. And these were built before the program had stabilized. They required expensive rework, and some were just never quite able to meet standard production specs. In fact, just last week we reported one of those early aircraft with just 13 flight hours logged was recently scrapped for parts rather than ever entering service. The 777X risks the same dynamic. Those early airframes may need configuration updates, engineering modifications and systems work before they're genuinely delivery ready. They might be a head start, or they might be a second workload sitting on Boeing's ramp. Then there's also the financial picture, which is sobering regardless of how optimistic you are about the certification timeline. Boeing has taken roughly $15 billion in charges on the 777X program. The aircraft originally due to enter service in 2020 is now running seven years late at a list price of around $440 million. With roughly 50 million in profit per aircraft, Boeing would need approximately 300 jets just to recover those overruns. That's a considerable hole to climb out of, even when the order book includes 270 aircraft for Emirates alone. But, you know, the direction of travel is finally genuinely positive. Boeing is sounding confident the FAA is moving. Lufthansa's first jet is active in the production standard test stream with mid-2027, the current delivery target from the airline's own training division. Cathay Pacific and Emirates are also pointing to 2027 for deliveries. But in Lufthansa particular, the arrival of the 7779 will mark the beginning of the end for some of the oldest jets in its fleet. We've already talked in other articles that the A340 600 and 747400 are on an expedited exit from Lufthansa, ready to be replaced by the 777X. So for those of us who love aircraft, it's a bit of a bittersweet countdown.
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B
Absolutely. And I think isn't this. This will be the first time Lufthansa will operate the a passenger version of the 777, correct?
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A
I want to say yes, but I don't want to say yes. I think so. I know They've got cargo triple 7s, definitely, but they don't have the 777 now, but I don't want to say they never had it, but I'm going to have a quick little look and find out. Yeah.
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B
Nonetheless, it's very interesting. I think that obviously Boeing is on the right track, but it's going to be a long time to see how long it'll be until they come out on top in terms of profits. Given that this delay has cost so much, you can only imagine Emirates has an order for 270 planes. They're not all going to be delivered at once, and of course they still have the A380, so I'd imagine that those planes will be delivered gradually over the next couple of years. But, yeah, nonetheless, very interesting and it's good to see that the aircraft and Boeing is on track there and we'll have to track all of these developments and look forward to that projected 2027 delivery. So very exciting. I have a question for you, Tom. Have you ever been on a lift?
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A
Have I ever been on a lift? I get in a lift every time I want to go up the stairs. Chatting.
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B
Sorry, sorry. Let me.
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A
Sorry.
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B
An elevator, sorry. Yes, I know, I know. That's actually not what I meant. I meant like a Lyft. Do they have Lyft in Germany?
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A
They don't have Lyft in Germany. We have Uber and Bolt over here. And I quite often take Uber and Bolt, preferably Uber these days. But I have been known to ride in a Lyft from time to time when I lived in the US for a year, and I think even then they had this scheme where you could share lifts with people that were going in the same sort of direction as you. And I've done that a few times. And that is a very bizarre experience.
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B
Yes, it is. I've never done it, but I have heard stories and I've seen it, and yes, it's very interesting. But for Lyft itself, Mileage plus members with United Airlines, there is a new partnership that is going to benefit passengers both in the air and on the ground. Today, Lyft and United Airlines announcing the ability to pay with miles, a first of its kind feature that allows Mileage plus members to redeem miles directly in the Lyft app for eligible rides. Now, this launch marks the first time an airline loyalty program and rideshare platform have offered direct mile to ride redemption in the us, Giving travelers the flexibility to use their miles to cover their lift, ride and flight. And we have a statement from Jared Fisher, the president of United Mileage Plus. It says we are giving mileage plus members more ways to use their miles Whether it's booking a United flight to a dream destination or traveling across town to meet up with friends through Lyft, many MileagePlus members have already linked their account with Lyft, showing strong demand for earning miles and more flexible ways to engage with the Mileage plus program. Together with Lyft, we're expanding how and where members can use their miles, unlocking simple, flexible ways to redeem them across their daily lives, no matter how far they're going. So Mileage plus members again who Lift who linked their Lyft accounts will find new Pay with Miles options in the Lyft app when requesting a ride. Members can then see how many miles will be redeemed before confirming their booking. After the ride is finished, a receipt shows the miles redeemed and the amount deducted from the total ride cost. Some of the details with this the Pay with Miles feature builds on the collaboration of the launch in November 2025 between MileagePlus and Lyft. I should mention United is not the only carrier here in the US that has a partnership with the ride sharing company. Delta Airlines also has a partnership with Uber. However, there isn't this Pay with Miles feature as far as I know of with the Delta and Uber partnership. But with this partnership between UN and Lyft, Mileage plus members can earn miles on eligible Lyft rides based off of the following There's 4 miles per $1 on pre scheduled airport rides, 3 miles per $1 on extra comfort lift black black SUV and on demand airport rides, 2 miles per $1 on standard priority pickup and XL rides within a company business profile and 1 mile per $1 on standard prior XL rides. And the new Lyft riders who linked their MileagePlus accounts and complete two rides within 30 days will receive 1,000 bonus mileage plus miles. Mileage plus is free to join and the miles of course never expire. So this is a pretty exciting partnership. I am very interested to see how long this will last and I'm not being skeptical, I'm just being realistic. It seems like a really great opportunity. I don't know if you remember this Tom, but we reported a couple years ago on Delta Airlines launching a partnership with SkyMiles members and Starbucks Rewards. You could get miles based off of your purchases at Starbucks for coffee and it turned out to be so popular that I think a lot of people were getting a lot of miles and so they put some restrictions on that. So now it's like you can Only you have to reload your rewards card. $30 at a minimum, in order to get mileage or sky miles. I believe I need to go back and check on that. But there are restrictions there, so I wonder if there'll be restrictions with this.
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A
Well, on that very topic, I have an amazing story from this weekend, which is about miles and more and Starbucks, because at the Starbucks in Frankfurt Airport, you can earn miles or more. And I think I paid €9 for a coffee, which is ridiculous, but I got nine miles and more points for this, which is nothing in terms of points, but it's nine more than nothing. So, anyway, there's a couple of bonus offers on Frankfurt Airport at the moment. I ended up getting 609 miles just for buying this coffee, because I got 500 miles for coming back to Frankfurt Airport for some reason and 100 miles for Lufthansa's 100th birthday. So it was pretty good day for me for collecting miles. But that's obviously very off topic at this point.
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B
No, I find any type of way that I can earn miles, and unfortunately, I kind of see it as a game and I don't think my wallet likes it. But, yeah, I think these partnerships are great. It definitely drives revenue. But we'll have to see if there will be any restrictions moving forward, because when Delta announced that initial collaboration, it was like, oh, I'm getting miles every single time I go to Starbucks. This is great. I'm going to be able to have a reward flight in no time. And now they make it a little bit bit more restrictive. So we'll see.
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A
Yeah.
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B
All right, so, yes, some great news there. And that is all the time that we have for today's podcast. So we hope you enjoyed it and we welcome any feedback that you might have@editorialimpleflying.com for more great content, you can
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A
visit our website@simpleflying.com or find us on social media. Simply search for Simple Flying.
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B
And if you enjoyed this podcast, please leave us a rating on your favorite podcast player. Thanks for listening, but bye.