AIRLINE INDUSTRY American to delay Boeing aircraft purchases

A Boeing spokesman said the deferments aren't surprising.
DALLAS (AP) -- American Airlines, struggling to make money despite high fuel prices and fierce competition, is delaying the delivery of 54 jetliners from The Boeing Co. in a move that underscores the split between aging carriers and low-cost rivals such as Southwest and JetBlue.
American, the nation's biggest airline, had agreed to take the planes between 2006 and 2010, but it said Monday it would defer delivery to delay $2.7 billion in spending through 2010 -- more than half of it in the next three years.
Chief financial officer James Beer, who disclosed earlier this month that American was negotiating with Boeing over possible delays, said it would improve the airline's ability to restructure its finances. American is a unit of Fort Worth-based AMR Corp.
Expectations
Boeing said it has already factored the delayed orders into its financial guidance. Boeing has said it expects to deliver 285 planes this year and 320 next year.
"Frankly, the deferrals are not surprising given the current economic health of U.S. legacy carriers," said a Boeing spokesman, Nicolaas Groeneveld-Meijer.
Robert E. Toomey, an analyst who follows Boeing for RBC Dain Rauscher, said Boeing might be able to sell some of the planes earmarked for American to low-cost carriers. He added that the setback could be tempered if Boeing can increase sales to carriers in Europe and Asia and by introducing its new 7E7 jetliner.
American said it would delay delivery of 47 Boeing 737-800 jets by seven years and seven Boeing 777 aircraft by six years. American said it would add two 777s in 2006, including one originally scheduled for delivery in 2007, to help expand international flights.
Ray Neidl, an analyst for Calyon Securities, said AMR was trying to conserve resources while it regains its footing in the troubled airline industry.
"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," Neidl said.
The last time American deferred jet deliveries was in October 2002, when it delayed 34 Boeing deliveries for 2003 through 2005 and mothballed 42 more planes. American was still reeling in the aftermath of the recession and 2001 terror attacks.
Airlines typically pay a fee to cancel or delay deliveries, but analysts said Boeing was likely to waive or greatly reduce any penalties for sucy a large customer. Neither AMR nor Boeing would comment on the terms of their agreement to let American delay its order.
American operates more than 730 aircraft, mostly Boeing and McDonnell Douglas models.