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American Airlines to Reduce International Flights Due to Boeing Dreamliner Delays

American Airlines AAL -0.80%

Group said that it will reduce international flights next summer because of Boeing a company

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Delayed delivery of the new 787 Dreamliner.

The schedule cut by the world’s largest airline by passenger traffic is the latest sign of the broader fallout from Boeing’s lengthy Dreamliner production problems that have largely kept it from delivering wide-body jets to airlines for more than a year.

A new type of defect surfaced in the Boeing Dreamliner recently, the latest in a string of problems that have halted deliveries. The company now has more than $25 billion of aircraft in its inventory. WSJ’s Andrew Tangle explains how Boeing got here. Photo: Reuters (Originally published in October).

The American will not fly to Edinburgh. Shannon, Ireland; Or Hong Kong next summer, and will reduce the frequency of flights to Shanghai, Beijing and Sydney, according to an internal airline memo seen by The Wall Street Journal. The company is not returning its seasonal flights to Prague or Dubrovnik, Croatia, and is also delaying the launch of certain routes, such as from Seattle to Bangalore, India, which it announced before the pandemic spread.

“Without these wide bodies, we simply won’t be able to fly internationally as we planned next summer, or as we did in the summer of 2019,” Vasu Raja, America’s chief revenue officer, wrote in the memo. Released after being reported by The Wall Street Journal.

Boeing 787s nearing completion at the company’s production plant in Everett, Washington, in 2013.


Photo:

Eileen Thompson/The Associated Press

A Boeing spokesperson said the plane maker 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 by April 1, 2022, at the earliest, later than previously expected, according to people familiar with the matter.

Summer schedules for airlines are not final yet, and airlines may take into account other factors such as lower demand due to the latest coronavirus variables and lengthy travel restrictions in deciding which markets they should serve. International long-haul travel has been the slowest to recover since the start of the pandemic, and airline executives have said they expect pent-up demand for bookings to increase next summer.

United Airlines Holdings a company ,

Another US operator of Dreamliners was expecting eight new 787s to arrive in the latter half of 2021, according to a July stock filing. A spokeswoman said the Chicago-based carrier was working closely with Boeing to understand how delivery delays could affect its schedule.

The Texas-based US carrier initially planned to offer a summer 2022 schedule with 89% of long-haul international flights going through the pre-pandemic phase, according to a person familiar with the airline’s plans. Instead, this person said, the US is expected to fly 80% on such routes as it did during the summer of 2019 because it does not have enough wide-body aircraft due to Boeing deliveries.

According to the memo, America plans to maintain its presence in Mexico, the Caribbean and Latin America; Travel with a full schedule to London, Dublin and Madrid; And add a route between New York and Doha, Qatar.

The American was betting on Boeing Dreamliners to help pull 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, the United States rushed the planned retirement of old Boeing and Airbus planes. It received one new Dreamliner during a brief delivery resumption earlier this year, and according to a July securities filing, it was expecting 11 by the end of the year. People familiar with the matter said it was not clear when they would arrive.

Since it halted Dreamliner deliveries in October 2020, Boeing has been dealing with various production flaws. For most of this year, the company has been seeking approval from US aviation regulators for pre-delivery inspections.

Earlier this year, Boeing slowed production, then additional problems led to more problems at its North Charleston, South Carolina plant. The undelivered inventory of over 100 Dreamliners is valued at more than $25 billion.

A Boeing spokesperson said the manufacturer continued to perform as-needed inspections and repairs on undelivered 787s, with the goal of taking “the time necessary to ensure compliance with our stringent specifications” while regulators review the company’s operations.

Boeing’s production problems also extended to its suppliers. A spokesman for the Italian aerospace company, Leonardo SBA, said it plans to leave for three months early next year for about 1,000 employees in southern Italy who make Dreamliner body parts. Reuters had previously reported the holidays.

By April 1, Boeing is estimated to have as many as 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 flight data provider Ascend by Cirium. A person familiar with the matter said the aircraft manufacturer has begun reaching out to potential customers to gauge interest in Dreamliners that were originally built for different customers.

Earlier this fall, US executives suggested on a call with their Boeing counterparts that the carrier could turn away at least some of the undelivered planes, according to people familiar with the conversation.

One of those people said that Boeing CEO David Calhoun and head of its business unit Stan Deal called US President Robert Isom, who is set to be the company’s next CEO, to assure him that the manufacturer would fully compensate America for the delays.

American’s Mr. Raja, in his internal memo, said the airline still had “great confidence in the Dreamliner” and would continue to work with Boeing on deliveries.

write to Andrew Tangel at Andrew.Tangel@wsj.com

Copyright © 2021 Dow Jones & Company, Inc. all rights are save. 87990cbe856818d5eddac44c7b1cdeb8

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