American Airlines defers Boeing deliveries
Financially struggling American Airlines will postpone delivery of 54 Boeing jets in a move designed to ease its financial burden.
The delivery of 47 Boeing 737-800 aircraft will be deferred by seven years, with seven Boeing 777 aircraft delayed by six years.
The arrangement allows American to postpone $1.4 billion of capital spending previously planned for 2005 through 2007 and $2.7 billion in capital spending through 2010. American’s parent company AMR Corp. recently announced a $214-million third-quarter loss, and predicted greater loss for the fourth quarter.
Boeing has already factored the deferrals into its financial guidance. “Frankly, the deferrals are not surprising given the current economic health of U.S. legacy carriers,” the Associated Press quoted a Boeing as saying.
“They want to be conservative until they see what happens with the price of fuel, ticket prices and how much market share the low-cost carriers get,” said Ray Neidl, analyst for Caylon Securities, as quoted by the AP.
American will still take delivery of two Boeing 777 aircraft in 2006, including one aircraft originally scheduled for delivery in 2007.