American Airlines Borrows $1.3 Billion Against New Jets And Reveals Its Fleet Strategy

American Airlines is preparing to borrow $1.325 billion against new aircraft deliveries, and against 15 older aircraft. Approximately $947 million is allocated to the 22 new or recently delivered aircraft; about $377 million against 15 existing Airbus A321s and Boeing 777s. The filings around this debt issuance shares a good bit about the airline’s fleet plan. Aircraft Number Delivery A321neo 9 July 2026–February 2027 A321XLR 5 September 2026–January 2027 A321-200 13 Delivered 2013–14 777-300ER 2 Delivered 2013–14 E175 8 September–December 2026 American’s June fleet included five Airbus A321XLRs. Five more are scheduled between September and January, meaning the XLR fleet should roughly double to ten if deliveries hold. One is due in September, one in November, two in December and one in January. Eight Embraer E175 regional jets are scheduled by December. American will own them and lease them to their wholly-owned subsidiary Envoy Air for American Eagle operations. Comparing the transaction with the airline’s SEC 10-Q filing, it finances 20 of American’s 26 remaining 2026 scheduled deliveries: 12 of 15 Airbus aircraft and eight of 11 E175s, plus two early-2027 Airbus deliveries. All 20 Boeing 777-300ERs are undergoing major cabin retrofits. The first retrofitted aircraft are about to enter service – that means no more first class, but more business class including the new business class suites with doors as well as improved premium economy. These planes are expected to remain in service into the late 2030s. American’s 218 Airbus A321-200s are expected to remain in the fleet into the 2030s and, in some cases, the 2040s. The debt issuance is preliminary and we don’t yet know the interest rates and offering prices so we can’t yet determine what sort of premium American may have to pay to borrow. But the expected ratings of this debt are A/A- for the senior tranche and BBB/BBB- for the junior tranche. That’s because they’re backed by valuable collateral (the planes) not merely the airline’s general credit. American itself remains speculative grade at an S&P B+. It is also the second large aircraft-backed financing in three months. An April transaction raised $1.141 billion. The earlier deal priced at 5.25% for Class A and 5.75% for Class B. American has a 373-aircraft orderbook. They’re expected to place an additional order for widebody aircraft soon. However, American’s fleet strategy is more “premiumize and extend” than “replace.” Retrofit the 777-300ER fleet. Retrofit the Boeing 777-200 and Boeing 787-8 fleet. Keep A321-200s productive into the 2030s and 2040s. Add premium-heavy XLRs for thinner long-haul routes. Expand dual-class E175 flying in small and medium markets. Finance deliveries with secured borrowing rather than consuming liquidity. American would argue they already have a relatively young fleet compared to Delta which flies ancient birds. United does, too, but that’s changing. And the airline needs a capital-efficient approach given its financial underperformance. They broke even last year and the median of their forecast is to break even again this year though revenue has been growing rapidly in line with the industry as a whole. In the second quarter interest expense was about equal to operating profit ($409 million vs. $446 million). Five additional Airbus A321 XLRs should provide aircraft for more premium transcontinental and European flying, including to more transatlantic destinations. The 777-300ER will have the same business class as new-delivery Boeing 787-9Ps. But many more passengers will be flying on regional jets – American’s regional flying totaled 57 million passengers in 2025, with 42% connecting to or from mainline flights (so a majority on regional-only). Its regional fleet now has 508 dual-class jets and 71 single-class jets, versus 238 dual-class and 328 single-class aircraft in 2014. That’s an improvement! Topics on this page