By Shivansh Tiwary

(Reuters) -American Airlines said on Monday it had agreed to buy a total of 260 new jets from Airbus, Boeing and Embraer, as the carrier targets increased capacity to meet soaring demand for travel.

Major airlines are scrambling to buy fuel-efficient planes to beat a growing shortage caused by supply-chain problems and strong demand for new aircraft.

The deal includes 85 Airbus A321neo jets, 85 Boeing 737 MAX 10s and 90 Embraer E175 aircraft, American Airlines said. The order also included options and purchase rights for an additional 193 aircraft.

Inclusive of the orders, the airline expects to remain within its previous forecast for capacity and capital expenditure, it said. It had earlier forecast full-year capital expenditure at about $3.2 billion.

Shares of the Texas-based airline fell 4.1% in afternoon trading, after the company forecast a 2024 core profit margin of about 14%, lower than 14.5% in 2023, as the industry grapples with higher labor costs.

The airline's order for the MAX 10, the largest variant of the MAX family, is also a boost for Boeing, which is grappling with a reputational crisis following an accident in January, in which a cabin panel tore off of an Alaska Airlines 737 MAX jet mid-flight.

"We deeply appreciate American Airlines' trust in Boeing and its confidence in the 737 MAX family," said Stan Deal, CEO of Boeing Commercial Airplanes.

American Airlines is planning for the future with the new order of 737 MAX 10s and looks forward to certification of the aircraft, it said on Monday.

"The only thing that matters to us is safety and quality. I don't care about production rates. I don't care about shareholders in regard to Boeing," its CEO Robert Isom said in an interview with CNBC.

Reuters has reported that rival United Airlines is in talks with Airbus for a potential mega order to replace hundreds of MAX 10s on order from Boeing, as airlines scramble for scarce Airbus production slots.

Last month, Boeing withdrew a request for a safety exemption that could have allowed U.S. regulators to speed up certification of its coming 737 MAX 7.

The withdrawal, first reported by Reuters, throws the anticipated timeline for certifying MAX 7 and the larger, better-selling MAX 10 into further doubt, as it may force Boeing to make design changes more quickly than it had planned.

(Reporting by Shivansh Tiwary and Aishwarya Jain in Bengaluru; Editing by Devika Syamnath and Shilpi Majumdar)