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American Airlines’ Travel Plans Jeopardized Due To Boeing Dreamliner Delays
American Airlines Group said it would trim international flights next summer because of Boeing’s delays in delivering new 787 Dreamliners. A timetable cut by the world’s largest carrier by passenger traffic is the latest evidence of greater damage from Boeing’s long-running Dreamliner production issues, which have kept the popular wide-body jets from being delivered to airlines for more than a year.
American Airlines has promised to minimize interruptions to its international schedule as a result of Boeing’s inability to deliver at least thirteen 787s due to continued issues with gaps between the model’s fuselage sections. Nonetheless, AA chief revenue officer Vasu Raja acknowledged in a memo to workers on Thursday that the airline has opted to cut service to Edinburgh, Scotland; Shannon, Ireland; and Hong Kong, as well as scrap plans to restart summer service to Dubrovnik and Prague. It will also significantly reduce frequencies to Asia-Pacific cities such as Shanghai, Beijing, and Sydney across its network while delaying the opening of new markets such as Seattle to Bangalore.
“Without these widebodies, we simply won’t be able to fly as much internationally as we had planned next summer or as we did in summer 2019,” said Raja, American Airlines’ CRO, in the memo.
A Background Context
Boeing halted Dreamliner deliveries late last year but managed to complete two by the end of the first quarter of this year. It delivered another 12 until late May when shipments were once again halted due to an FAA request for additional documentation regarding the quality issues. Boeing discovered in September of last year that mechanics clamped together certain components in the horizontal stabilizer with more force than required by engineering specifications, potentially resulting in improper gap verification or shimming as workers assembled the component. This issue slowed deliveries even more as the company performed special inspections to address flaws in fuselage skins and shimming issues in some of the planes’ aft fuselages, which were discovered in 2019.
In July, Boeing stated that it discovered more issues with the forward pressure bulkhead. During the checks, engineers discovered minor holes between two parts of the bulkhead and reported the issue to the FAA. Then, in October of this year, Boeing discovered that a subsupplier utilized defective titanium in parts provided by Leonardo. Boeing stated that the issue did not jeopardize flight safety, but it did complicate efforts to return the 787 to service.
Impact of the Delay
A Boeing spokesman said the company 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.
According to a source familiar with the airline’s intentions, American had planned to offer a summer 2022 schedule with 89 percent of the long-haul international flights it had before the epidemic. Instead, due to the delayed Boeing deliveries which consisted of wide boy aircraft, American is scheduled to fly 80 percent as often on similar itineraries as it did during the summer of 2019. The memo sent to workers stated that American intends to maintain its presence in Mexico, the Caribbean, and Latin America, as well as fly a full schedule to London, Dublin, and Madrid, and to add a route between New York and Doha, Qatar.
American had been counting on Boeing’s Dreamliners to help it recover from the pandemic. As governments across the world tightened travel restrictions and airlines canceled foreign flights, American expedited the retirement of its aged wide-body Boeing and Airbus planes. It received one new Dreamliner during a brief resumption of deliveries earlier this year and had expected 11 by the end of the year, according to a July securities filing. People familiar with the situation say it’s unclear when they’ll arrive.
Boeing has been coping with significant production flaws since halting Dreamliner deliveries in October 2020. For much of this year, the company has been seeking pre-delivery inspection certification from US aviation regulators.
Boeing slowed production earlier this year, citing an undelivered inventory of more than 100 Dreamliners valued at more than $25 billion. According to a Boeing representative, the manufacturer is continuing to inspect and repair undelivered 787s as needed, intending to take the “time needed to assure compliance to their rigorous specifications” while regulators assess the company’s processes. Boeing’s production problems have also impacted its suppliers. A company official said that Leonardo SpA, an Italian aerospace maker, plans to lay off 1,000 people in southern Italy who construct Dreamliner fuselage sections for around three months early next year.
According to Cirium, by April.1, Boeing is expected to have as many as 66 constructed Dreamliners at risk of cancellation under aircraft purchasing contracts that normally allow buyers to walk away without penalty if deliveries are a year late. 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.
Summer itineraries for airlines have not yet been finalized, and carriers may consider additional variables such as reduced demand due to the most recent coronavirus variations and remaining travel restrictions when determining which areas to serve. Long-haul foreign travel has been the slowest to recover since the pandemic began, but airline executives expect pent-up demand to spur a rise in bookings next summer.
Because of the supply delays, American Airlines will no longer use widebodies in domestic or short-haul international service, instead of focusing on long-haul international markets with each of its twin-aisle jets.
“Despite this delay, we still have great confidence in the Dreamliner and continue to work with Boeing on when these planes can be ultimately delivered to us,” Raja told employees. “In addition, Boeing has advised us that they will compensate American for their inability to deliver the aircraft.”
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