American Airlines Threatens to Cancel some Boeing Max orders

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American Airlines warns Boeing that it may cancel some overdue orders for the grounded 737 Max, unless the aircraft manufacturer, according to people familiar with the discussions, is helping to prepare new jet funding.

The American stand comes from the fact that airlines find financing increasingly difficult and expensive as the coronavirus pandemic has paralyzed their operations.

According to three people who spoke anonymously on Friday, American had 24 max jets before hiring in March 2019. The company has ordered 76 more, but would like Boeing to help organize the financing of 17 aircraft for which the previous funding has expired or is about to expire, to discuss private discussions between the companies.

If the companies fail to reach an agreement, the American could use the Max funding, which will soon expire, to pay for Boeing’s arch-rival Airbus jets, one respondent said.

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The Wall Street Journal was the first to report an American threat to cancel some orders.

The Max was Boeing’s best-selling airplane before 346 people died in a crash in Indonesia and Ethiopia and regulators around the world ground all of the Max Jets.

The 17 controversial aircraft should have been delivered to Americans at least a year ago. This has given the airline the opportunity to cancel the order without penalty and to now reclaim their deposits, according to one of the people familiar with the matter.

The deliveries have been delayed while Boeing works to fix a flight-control system suspected of playing a role in the crashes.

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Airlines have canceled orders for more than 400 Max aircraft so far this year, and 320 are no longer safe enough to be behind Boeing.

Some were dropped because the airline buyer encountered financial problems while others were exchanged for other Boeing aircraft. The company had received 4,619 orders by May.

By September 30, American had accepted $ 5.8 billion in state aid to pay workers, reached a tentative agreement on a $ 4.75 billion federal loan, and raised billions more in cash from private lenders Provided to survive the downturn.

(With inputs – PTI)

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