Max Kingsley-Jones/LONDON Ramon Lopez/Washington DC
As USAir seeks to cut its cost structure to enable its planned acquisition of a new Airbus narrowbody fleet, the airline is negotiating the cancellation of its existing orders with Boeing for up to 48 aircraft.
USAir has told Boeing that it does not plan to accept delivery of eight Rolls-Royce RB211-powered Boeing 757-200s, and says that it is also discussing the "status" of its order for 40 Boeing 737-300s. A filing was made with the US Securities and Exchange Commission after the failure to make a $3 million progress payment, due on 1 November for the eight 757s, scheduled for delivery in 1999.
USAir had already cancelled 15 of its 23 757 orders in July 1995, when agreement was reached with Boeing to exchange them for 24 more 737-300s. Delivery of the 40 aircraft had been deferred until the next decade, and USAir is understood to be seeking to defer the order further or to cancel it altogether.
The carrier is in discussion with Boeing and Airbus over the acquisition of new long-haul aircraft (777s or A330s) and the plan to abandon the existing orders does not preclude further Boeing acquisitions in the future.
In November, USAir concluded a preliminary agreement with Airbus for the purchase of 120 A320 family aircraft, with reconfirmable orders and options, for a further 280 aircraft. The order is subject to the airline achieving a competitive cost structure, which chairman and chief executive officer Stephen Wolf says is a must if financing for the aircraft is to be secured. The order is also subject to board approval. Negotiations are being held to reduce the airline's operating costs, of which employee costs contribute some 40%.
USAir is aiming to take delivery of its first six Airbuses during the second half of 1997 which "-puts tremendous pressure upon us [to reach agreement]", says Wolf. The airline, which can cancel its Airbus contract without penalty, says that so far it has only discussed possible financing of the order with the manufacturer.
From early 1997, USAir will become US Airways, with the introduction of a new corporate identity. Wolf says that USAir has made "-great strides in recent months in its operational efficiency, in the development of its international route structure and in its financial performance. It is time to say to the world, and to ourselves, who we are and what we intend to become."
Source: Flight International
