American Airlines AAL -0.49% Group Inc. said it would trim international flights next summer because of Boeing Co. BA -1.64% ’s delays in delivering new 787 Dreamliners.
A schedule cut by the world’s largest carrier by passenger traffic is the latest sign of broader fallout for Boeing’s prolonged Dreamliner production problems that have largely prevented it from handing over the popular wide-body jets to airlines for more than a year.
American won’t 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 viewed by The Wall Street Journal. The carrier isn’t bringing back seasonal flights to Prague or Dubrovnik, Croatia, and it is delaying the launch of certain routes, such as from Seattle to Bangalore, India, which it had announced before the pandemic hit.
“Without these wide-bodies, we simply won’t be able to fly as much internationally as we had planned next summer, or as we did in summer 2019,” Vasu Raja, American’s chief revenue officer, wrote in the memo, which American released after it was reported by The Wall Street Journal.
Boeing 787 jets nearing completion at the company’s production plant in Everett, Wash., in 2013.
Photo: Elaine Thompson/Associated Press
A Boeing spokesman said the plane maker deeply regrets “the impact to our customers as we work through the process to resume deliveries of new 787s.”
Deliveries are expected to resume by April 1, 2022, at the earliest, later than previously anticipated, according to people familiar with the matter.
Airlines’ summer schedules aren’t final yet, and carriers may consider other factors such as reduced demand due to the latest coronavirus variants and lingering travel restrictions in deciding which markets to serve. Long-haul international travel has been the slowest to bounce back since the onset of the pandemic, and airline executives have said they expect pent-up demand to fuel a surge in bookings next summer.
United Airlines Holdings Inc., another U.S. operator of Dreamliners, had been expecting eight new 787s to arrive in the last half of 2021, according to a July securities filing. A spokeswoman said the Chicago-based carrier is working closely with Boeing to understand how the delivery delays may affect its schedule.
Fort Worth, Texas-based American had initially planned to offer a summer 2022 schedule with 89% of the long-haul international flying it had pre-pandemic, according to a person familiar with the airline’s plans. Instead, this person said, American is expected to fly 80% as much on such routes as it did during summer 2019 because it doesn’t have enough wide-body aircraft due to the delayed Boeing deliveries.
According to the memo, American is planning to maintain its presence in Mexico, the Caribbean and Latin America; fly a full schedule to London, Dublin and Madrid; and add a route between New York and Doha, Qatar.
American had been betting on Boeing’s Dreamliners to help lift the airline out of the depths of the pandemic. Early last year, as governments world-wide imposed travel restrictions and airlines canceled international flights, American accelerated planned retirements of its aging wide-body Boeing and Airbus aircraft. It received one new Dreamliner during a brief resumption of deliveries earlier this year and, according to a July securities filing, had been expecting 11 by the year’s end. It isn’t clear when they will arrive, people familiar with the matter said.
Ever since halting Dreamliner deliveries in October 2020, Boeing has been dealing with various production defects. For much of this year, the company has been seeking approval from U.S. aviation regulators for pre-delivery inspections.
Earlier this year, Boeing slowed production, and then additional problems further bogged down its North Charleston, S.C., factory. The undelivered inventory, in excess of 100 Dreamliners, is worth more than $25 billion.
The Boeing spokesman said the manufacturer continued to conduct inspections and repairs as needed on undelivered 787s, aiming to take the “time needed to ensure conformance to our exacting specifications” while regulators review the company’s processes.
Boeing’s production issues have also spilled over to its suppliers. Italian aerospace manufacturer Leonardo SpA is planning to furlough for about three months early next year some 1,000 employees in southern Italy who make Dreamliner fuselage sections, a company spokesman said. The furloughs were earlier reported by Reuters.
By April 1, Boeing is estimated to have as many as 66 built Dreamliners at risk of cancellation under aircraft purchasing contracts that generally allow buyers to walk away without penalty if deliveries are a year late, according to aviation data provider Ascend by Cirium. The plane maker has begun 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 carrier could walk away from at least some undelivered aircraft, according to people familiar with the conversation.
Boeing CEO David Calhoun and his commercial unit chief Stan Deal called American President Robert Isom, slated to be the carrier’s next chief executive, more recently to assure him the manufacturer would fully compensate American for the delays, one of these people said.
American’s Mr. Raja, in his internal memo, said the airline still has “great confidence in the Dreamliner” and would continue working with Boeing on deliveries.
Write to Andrew Tangel at [email protected]
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