AA May Cancel Some 737 MAX Orders Due to Financing Difficulties
#1
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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."
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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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.
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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one mile at a time also has the story as well.
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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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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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Airbus helped fund the HP-US merger and some of those executives are at AA today, so they know what they are doing.
#13
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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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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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I will try my best never to fly the 737-MAX
I hope all orders are cancelled. Too bad for Boeing. Former CEO should be taken to court as an INDIVIDUAL. FWIW to AA, I will make my travel plans to avoid the 737-MAX. I like AAs international equipment, but if need be, I will use DELTA (supposedly not buying MAXs) to get to an AA gateway before proceeding on my journey.