Stranded
American cancels flights; Boeing delays Dreamliner.
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The Company, through its subsidiaries, operates in the airline industry. View More
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Summary:
Operates as an aerospace firm in five principal segments: Commercial Airplane, Integrated Defense Systems, Precision Engagement
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These are dark days for fliers, and today was a particularly gloomy one.
American Airlines said that it would cancel more than 1,000 flights for wiring inspections, inconveniencing 85,000 passengers and unnerving the rest of us.
At a moment when new planes could not be more welcome,
Boeing announced further delivery delays for its 787 Dreamliner.
Deliveries for the hotly anticipated new plane are now running as much as 18 months behind schedule, which begs the question: How much should air travelers care about Boeing's delay at the gate?
Of course, Boeing's new 787s would not be replacing the planes grounded by American on Wednesday. The 787 is a long-haul plane used for international flights, whereas the Federal Aviation Administration’s concerns are with Boeing's MD-80s, a short-haul plane no longer in production.
There are only two U.S. airlines that have placed Dreamliner orders to date. Northwest has a contract for 18, and Continental has 25 on order.
In any case, industry analysts don't see any threat of old or unsafe planes staying in service as airlines wait for new equipment. The 787s have been purchased mainly as additions to relatively new fleets of long-haul aircraft, rather than as replacements for aging planes.
"It's unlikely that you're going to have aircraft go past their 'expiration date,'" says Richard Aboulaffia, who covers airlines for the Teal Group.
But while safety may not be an issue, are there additional costs from the delays that will be passed on in the form of ticket prices?
Airlines awaiting 787s have three courses of action: They can live with a smaller fleet; keep planes in service for longer; or find comparable planes to bridge the gap—Boeing's 767 and 777 models are close to the Dreamliner in size, as is Airbus' A330.
Continental ordered eight new 777s from Boeing in February, and Virgin Atlantic is in talks with Boeing to have 777s lent to them for the short term.
"Airlines will still do whatever they were planning to do, just with a different plane," says Michael Derchin, an analyst with FTN Midwest Securities. "And at some point, they will sit down with Boeing and go over what's a fair compensation."
Both Derchin and Aboulaffia believe that it will be Boeing, rather than the airlines and their customers, that will end up footing many of the added equipment costs of the delay.
But there's an extra cost component associated with delivery delays that Boeing's not likely to cover: The revolutionary element of the 787 is its outstanding fuel economy, as the plane is expected to use as much as 20 percent less fuel than comparable aircraft.
Now airlines (and their passengers) will have to wait longer to start experiencing those fuel-cost savings.
At a moment when new planes could not be more welcome,
Deliveries for the hotly anticipated new plane are now running as much as 18 months behind schedule, which begs the question: How much should air travelers care about Boeing's delay at the gate?
Of course, Boeing's new 787s would not be replacing the planes grounded by American on Wednesday. The 787 is a long-haul plane used for international flights, whereas the Federal Aviation Administration’s concerns are with Boeing's MD-80s, a short-haul plane no longer in production.
There are only two U.S. airlines that have placed Dreamliner orders to date. Northwest has a contract for 18, and Continental has 25 on order.
In any case, industry analysts don't see any threat of old or unsafe planes staying in service as airlines wait for new equipment. The 787s have been purchased mainly as additions to relatively new fleets of long-haul aircraft, rather than as replacements for aging planes.
"It's unlikely that you're going to have aircraft go past their 'expiration date,'" says Richard Aboulaffia, who covers airlines for the Teal Group.
But while safety may not be an issue, are there additional costs from the delays that will be passed on in the form of ticket prices?
Airlines awaiting 787s have three courses of action: They can live with a smaller fleet; keep planes in service for longer; or find comparable planes to bridge the gap—Boeing's 767 and 777 models are close to the Dreamliner in size, as is Airbus' A330.
Continental ordered eight new 777s from Boeing in February, and Virgin Atlantic is in talks with Boeing to have 777s lent to them for the short term.
"Airlines will still do whatever they were planning to do, just with a different plane," says Michael Derchin, an analyst with FTN Midwest Securities. "And at some point, they will sit down with Boeing and go over what's a fair compensation."
Both Derchin and Aboulaffia believe that it will be Boeing, rather than the airlines and their customers, that will end up footing many of the added equipment costs of the delay.
But there's an extra cost component associated with delivery delays that Boeing's not likely to cover: The revolutionary element of the 787 is its outstanding fuel economy, as the plane is expected to use as much as 20 percent less fuel than comparable aircraft.
Now airlines (and their passengers) will have to wait longer to start experiencing those fuel-cost savings.





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