American Airlines proposes new 787 and 737 Max terms

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American Airlines parent AMR Corp may convert orders for 20 Boeing 787-9s to a smaller variant, restore the timing of the first 787 delivery to 2014 and finalise a deal to buy 42 787s overall by the end of the month.

The proposed deals announced today by AMR also seek to finalise a purchase agreement for 100 737-8 Max aircraft, but at reduced prices.

The contractual changes are included in AMR's financial restructuring under bankruptcy protection, a process that allows US companies to renegotiate previously signed contracts under new and more favourable terms.

The new terms must still be approved by the US bankruptcy court for the Southern District in New York during a hearing on 23 January, but could take effect by the end of the month.

American signed a purchase agreement to buy 42 787-9s with options for 58 more nearly five years ago, but the carrier never finalised the order.

American may convert 20 787-9s to -8s, while keeping the option to buy 58 more 787s, under the proposed changes.

In early 2012, American Airlines said that the first 787-9 delivery would be delayed beyond 2014 due to delays in Boeing's production system.

However, the proposed restructuring of the deal accelerates the first 787 delivery to November 2014, according to the carrier's filing. Deliveries would then continue through September 2018.

The deals also include a restructured purchase agreement for the airline's 737-800, 737 Max and undelivered 777-300ERs.

If the court approves the motion, AMR will have completed the last piece of the restructuring of its fleet under bankruptcy protection. Last month, AMR announced renegotiated terms on the Airbus A320neo, which it ordered before entering bankruptcy protection.