American Airlines Group Inc (AAL) said on Tuesday it had agreed to purchase 20 Overture jets from Boom Supersonic.
With the deal, American has become the second major US air carrier to bet on ultra-fast passenger travel in the past two years.
The company has made an unspecified non-refundable deposit on the first 20 jets, each with capacity to carry 65 to 80 passengers.
The airline also has an option to buy 40 additional Overture aircraft.
The four-engine Overture jet is capable to make the flight from Miami to London in less than five hours, which would reduce the flight time between the cities by nearly 50%.
According to Matt Miller, a spokesperson for the company, it is still too early to discuss ticket prices, given the Overture will probably not carry its first passengers until 2029.
American Airlines shares closed higher for a third consecutive trading session on NASDAQ on Tuesday. The stock went up 1.11% ($0.17) to $15.50, after touching an intraday high at $15.71. The latter has been a price level not seen since June 10th ($15.83).
The shares of American Airlines Group have retreated 13.70% so far in 2022 compared with a 9.67% loss for the benchmark index, S&P 500 (SPX).
In 2021, American Airlines’ stock went up 13.89%, thus, it again underperformed the S&P 500, which registered a 26.89% gain.
Analyst stock price forecast and recommendation
According to TipRanks, at least 7 out of 9 surveyed investment analysts had rated American Airlines’ stock as “Hold”, while 2 – as “Sell”. The median price target on the stock stands at $15.25.