American Airlines AAL -0.85%
Group Inc. said it would cut international flights next summer because of Boeing Co.
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Delays in the delivery of the new 787 Dreamliners.
A schedule cut by the world’s largest airline because of passenger traffic is the latest sign of broader fallout from Boeing’s protracted Dreamliner production problems that have largely prevented it from delivering popular wide-body jets to airlines. for more than a year.
American will not fly to Edinburgh; Shannon, Ireland; or Hong Kong next summer, and it will reduce the frequency of flights to Shanghai, Beijing and Sydney, according to an internal airline memo seen by The Wall Street Journal. The airline is not bringing seasonal flights to Prague or Dubrovnik, Croatia, and is delaying the launch of certain routes, such as Seattle to Bangalore, India, that it had announced prior to the pandemic.
“Without these wide-body jets, we simply won’t be able to fly as much internationally as we had planned next summer, or as we did in the summer of 2019,” Vasu Raja, American’s chief revenue officer, wrote in the memo, which American later published. it was reported by The Wall Street Journal.
A Boeing spokesperson said the aircraft manufacturer deeply regrets “the impact on our customers as we work through the process to resume deliveries of the new 787s.”
Deliveries are expected to resume on April 1, 2022, later than planned at the earliest, according to people familiar with the matter.
Airline summer hours are not yet final, and airlines may consider other factors such as reduced demand due to the latest variants of the coronavirus and persistent travel restrictions in deciding which markets to serve. Long-haul international travel has been the slowest to recover since the pandemic began, and airline executives have said they expect pent-up demand to drive a surge in bookings next summer.
United Airlines Holdings INC.,
Another US Dreamliners operator was expecting eight new 787s to arrive in the latter half of 2021, according to a July securities filing. A spokeswoman said the Chicago-based airline is working closely with Boeing to understand how delivery delays can affect its schedule.
American, based in Fort Worth, Texas, had initially planned to offer a 2022 summer schedule with 89% of the long-haul international flights it had before the pandemic, according to a person familiar with the airline’s plans. Instead, this person said, American is expected to fly 80% more on those routes than during the summer of 2019 because it doesn’t have enough wide-body jets due to delayed deliveries from Boeing.
According to the memorandum, American plans to maintain its presence in Mexico, the Caribbean and Latin America; flies a full schedule to London, Dublin and Madrid; and add a route between New York and Doha, Qatar.
American had bet on Boeing’s Dreamliners to help lift the airline out of the depths of the pandemic. Early last year, when governments around the world imposed travel restrictions and airlines canceled international flights, American accelerated planned recalls of its aging Boeing and Airbus wide-body jets. It received a new Dreamliner during a brief resumption of deliveries earlier this year and, based on a July stock filing, was expecting 11 by the end of the year. It’s unclear when they will arrive, people familiar with the matter said.
Since stopping Dreamliner deliveries in October 2020, Boeing has been dealing with several manufacturing defects. For much of this year, the company has been seeking approval from US aviation regulators for pre-delivery inspections.
Earlier this year, Boeing cut production and then additional problems further bogged down its North Charleston, SC factory. The undelivered inventory, which exceeds 100 Dreamliners, is worth more than $ 25 billion.
The Boeing spokesman said the manufacturer continued to carry out inspections and repairs as necessary on the undelivered 787s, with the goal of taking “the time necessary to ensure our strict specifications are met” while regulators review the company’s processes.
Boeing’s production problems have also spread to its suppliers. Italian aerospace manufacturer Leonardo SpA plans to suspend for about three months early next year about 1,000 employees in southern Italy who make Dreamliner fuselage sections, a company spokesman said. The permits were previously reported by Reuters.
By April 1, Boeing is estimated to have up to 66 Dreamliners built at risk of cancellation under aircraft purchase contracts that generally allow buyers to walk away without penalty if deliveries are delayed by a year, according to the data provider of Ascend by Cirium aviation. The aircraft maker has started reaching out to potential customers to gauge interest in Dreamliners originally built for different customers, a person familiar with the matter said.
Earlier this fall, American executives suggested in a call with their Boeing counterparts that the airline might steer clear of at least some undelivered jets, according to people familiar with the conversation.
Boeing CEO David Calhoun and its business unit director Stan Deal called on US President Robert Isom, slated to be the airline’s next CEO, most recently to assure him that the manufacturer would fully compensate American for delays, said one of these people.
American’s Raja, in its internal memo, said the airline still has “great confidence in the Dreamliner” and will continue to work with Boeing on deliveries.
Write to Andrew Tangel at Andrew.Tangel@wsj.com
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