American Airlines Threatens to Cancel Boeing 737 MAX Jet Orders

American Airlines Group Inc. has threatened to cancel some of its orders for the Boeing 737 MAX jets, pointing toward a deepening financial stress in the aviation industry, according to a Wall Street Journal report, citing people familiar with the matter.

American Airlines, based in Fort Worth, Texas, 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 expected to receive due to the downturn in the travel industry.

The 737 MAX has been grounded world-wide since March 2019, following two deadly crashes over a five-month span. Several airlines have canceled MAX orders, but American (AAL) would be the largest domestic carrier to make this kind of decision. This would be another big blow to Boeing in the wake of the 737 Max troubles. Boeing had hoped to return the troubled 737 Max planes into service later this year.

Both American Airlines and Boeing have declined to comment on the report.

Staff Report