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AA May Cancel Some 737 MAX Orders Due to Financing Difficulties

AA May Cancel Some 737 MAX Orders Due to Financing Difficulties

Old Jul 10, 20, 1:38 pm
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AA May Cancel Some 737 MAX Orders Due to Financing Difficulties

This is from a WSJ article, so unfortunately behind a paywall, but it does illustrate some of the challenges that that AA is currently encountering with their finances (and I'm sure they're not alone).

From https://www.wsj.com/articles/america...d=hp_lead_pos4

"American Airlines Group Inc. AAL +6.09% has threatened to cancel some of its orders for Boeing Co. BA +2.83% ’s troubled 737 MAX jets, people familiar with the matter said, a sign of deepening financial stress in the aviation industry.The Fort Worth, Texas-based carrier has struggled to secure financing for 17 jets it had expected Boeing to deliver this year, some of these people said. The coronavirus pandemic has led to a sharp drop in air-travel demand and left global airlines fighting to survive, with many unable to afford planes they no longer need."
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Old Jul 10, 20, 1:47 pm
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I feel that 737 MAX will be scrapped altogether, as most carriers will refuse to get them. That will be a huge hit to Boeing.
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Old Jul 10, 20, 4:45 pm
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They won't be good enough. Due to financial crisis. Hopefully in a few years they will get better soon. They can re-orders 737-MAX again.
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Old Jul 10, 20, 5:30 pm
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Here ya go. Sorry, it would not allow me to attach a PDF - best I could do,



Moderator note:

Four of the five photos of the article have been deleted due to infringement of copyright laws. The first few paragraphs have been left as fair use summary summarizing the article contents. The FT Rule covering the use of copyrighted material is
https://www.flyertalk.com/help/rules.php#copyrighted . Moderator

Last edited by JDiver; Jul 10, 20 at 10:21 pm Reason: Left part of article for fair use of copyright protected article
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Old Jul 10, 20, 5:35 pm
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The article had lots of wiggle room and back tracking. I think it is mostly smoke by AA.
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Old Jul 10, 20, 6:45 pm
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Originally Posted by arollins View Post
I feel that 737 MAX will be scrapped altogether, as most carriers will refuse to get them. That will be a huge hit to Boeing.
One can only hope. That project should have been scrapped from its inception.
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Old Jul 10, 20, 8:47 pm
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The MAX's never-ending delays may render this moot, as the climate may improve by the time they can actually be delivered. Or AA may be bankrupt.

Some of this is undoubtedly negotiating tactics on AA's part, but I wouldn't be surprised if the MAX fiasco had made financiers very reluctant to touch the plane, over and above their concerns about the sector in general at the moment.
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Old Jul 11, 20, 6:30 am
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one mile at a time also has the story as well.
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Old Jul 11, 20, 6:36 am
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The last line of the remaining article screenshot is very interesting. "unless Boeing helps" ...
I don't doubt that AA is in a bad spot, but this could be a negotiation ploy.
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Old Jul 11, 20, 7:53 am
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Originally Posted by arollins View Post
I feel that 737 MAX will be scrapped altogether, as most carriers will refuse to get them. That will be a huge hit to Boeing.
The MAX is already a "huge hit to Boeing" no matter what. The costs of Boeing's errors are a gigantic multiple of the savings they sought to secure by cutting corners and leveraging the 52-year-old 737 planform one last time. That said I doubt the program will be scrapped at this point -- just frozen for some years. Boeing's effectively handed Airbus the entire short / medium-haul market, what's left of it, for the balance of the 2020s.
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Old Jul 11, 20, 11:54 am
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There must be a lot of almost-new aircraft available off-lease for bargain prices. I'd think selling new aircraft is going to be very challenging for a while.
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Old Jul 11, 20, 1:01 pm
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Originally Posted by TBD View Post
The last line of the remaining article screenshot is very interesting. "unless Boeing helps" ...
I don't doubt that AA is in a bad spot, but this could be a negotiation ploy.
Airbus helped fund the HP-US merger and some of those executives are at AA today, so they know what they are doing.
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Old Jul 11, 20, 1:10 pm
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Byeeeee Boeing
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Old Jul 11, 20, 7:47 pm
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Originally Posted by AANYC1981 View Post
Byeeeee Boeing
Certainly Boeing bears a lot of the fault for their current predicament by making a plane on the cheap that doesn’t fly safely; but the coronavirus is really gonna be the dagger in their heart. Airbus should survive in tact, Boeing will have a much more difficult time unless it becomes a US government entity. AA is smart to play hardball with them now.
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Old Jul 11, 20, 7:54 pm
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Originally Posted by travelinmanS View Post
Certainly Boeing bears a lot of the fault for their current predicament by making a plane on the cheap that doesn’t fly safely; but the coronavirus is really gonna be the dagger in their heart. Airbus should survive in tact, Boeing will have a much more difficult time unless it becomes a US government entity. AA is smart to play hardball with them now.
I’m sure Boeing falls under the ‘too big to fail’ umbrella of protectionism. Really wish Lockheed would get back into commercial airplanes. The L-1011 remains one of my absolute favorites.
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