MIAMI – American Airlines (AA) is reportedly backtracking from last week’s statement on its Boeing 737 MAX order and is on the verge of canceling part of the deal. adding insult to injury to Boing’s program and overall order cancelations.
According to the Wall Street Journal, sources have suggested AA may be set to cancel 17 Boeing 737 MAX part of its order for the type, as, presumably, the big three U.S. carriers are unable to secure financing.
American Airlines executives reportedly have recently informed Boeing that AA did not have enough funding to pay for the aircraft, thus being forced to cancel part of its order if not helped by Boeing to secure the financing necessary for the deal.
Airways has approached AA for a comment regarding the report initially released by The Wall Street Journal. American declined to comment at this time.
Boeing’s 10th MAX Customer
If true, this is bad news for Boeing, particularly as it was AA’s quest for a more fuel-efficient narrow-body that initially inspired the manufacturer to create the MAX.
According to Johanna Bailey from simpleflying.com, AA is the 10th largest customer for the aircraft, with Boeing ‘s books ordering 100 of that kind.
American Airlines had 24 737 MAX in its fleet at the grounding stage, all of which have stayed on the ground since March 2019. Given the difficulties raised by the ongoing aviation crisis, CEO Doug Parker said in April that he had no intention of delaying any orders for the MAX.
MAX Cancelations Across The Board
Now, it is not surprising that AA is keen on re-evaluating its position as passenger demand might not pick up any time soon, not to mention the possibility of widespread layoffs in the fall. Other US airlines have moved to defer deliveries as well, with Delta (DL) saying this year it will take no new aircraft at all.
If American moves to cancel its 17 737 MAX deliveries, it leaves Boeing with 17 more aircraft completed and undeliverable. In the end, AA is yet another airline airlines canceling MAX orders; besides leasing companies and carriers such as Norwegian have said they would, with Norwegian (DY) canceling all 92 orders it had.
Another example is GECAS, which in April, after evaluating its fleet and order book, decided to cancel 69 orders of Boeing 737 MAX jets, parking the type in its current fleet due to the drop in its demand.
As Boeing tries to have the MAX come back by taking the first step and passing its recertification test flights last week, it nevertheless has to deal with the fact that it has over 600 cancelations for the type in 2020.