Leeham News and Analysis

American is the launch customer for 737RE–but not the launch operator

American Airlines is the launch customer for the Boeing 737 re-engine, but it’s not the launch operator.

As American’s 10Q SEC filing revealed the day the order was announced, AA won’t take delivery of the first 737RE until 2018. EIS is planned for 2016 or 2017.

We asked American about this. Sean Collins, director of financial communications for the airline, confirmed American doesn’t want to be the first operator of the aircraft.’

“We don’t like to be the first in line for a new airplane,” he said. “There is a learning curve to be worked out. We like to let that process work its way out. That’s the approach we’ve taken.”

American’s status as the launch customer but not the launch operator is somewhat ironic. Bombardier came under a great deal of criticism for having launch customers but not launch operators for its CSeries (a point rectified at the Paris Air Show, with an unidentified network carrier placing an order to become the launch operator). In fact, Boeing’s Nicole Piasecki, VP of Business Development and Strategic Integration, made the same criticism toward BBD in Boeing’s pre-Paris Air Show press briefing.

While BBD’s critics point to the facts that the CSeries is an entirely new airplane, using new materials, production techniques and suppliers, the 737RE is intended to be a reasonable straight-forward derivative of a well-established airplane. That American is sufficiently wary of being the launch operator is a statement of some kind.

We’ll leave it to analysts and observers to make their own interpretations.

But American’s decision leaves Boeing in the position of being able to offer initial delivery slots to Southwest Airlines and Delta Air Lines. Southwest launched 737 derivatives -300, -500 and -700 and has been agitating for two years or more for Boeing to upgrade the 737 or, preferably, proceed with a new airplane. Delta is currently deciding on the 757 replacement, evaluating the 737-900ER and the A321neo. A re-engined -900ER should change the dynamics of this competition a bit.

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