crAAzy From United States of America, joined Jan 2008, 804 posts, RR: 0 Posted (2 years 6 months 2 weeks 2 days 23 hours ago) and read 11747 times:
Based on information from AA's 2010 Q3 report it appears AA did not meet the 18 month requirement for 2014 delivery.
I wondering if they'll even be able to confirm this order while their in BK or are we going to have to wait until everything is finished? It seems like with a deadline of May 1, 2014 they'll still have plenty of time to place the order.
In 2008, the Company entered into a new purchase agreement with Boeing for the acquisition of 42 firm Boeing 787-9 aircraft and purchase rights to acquire up to 58 additional B787 aircraft. Per the purchase agreement, the first such aircraft was scheduled to be delivered in 2012, and the last firm aircraft was scheduled to be delivered in 2018 with deliveries of additional aircraft, if any, scheduled between 2015 and 2020. In July 2010, the Company and Boeing agreed upon a revised delivery schedule due to the impact of the overall Boeing 787 program delay on American's delivery positions. The first aircraft is currently scheduled to be delivered in 2014, and the last firm aircraft is scheduled to be delivered in 2018 with deliveries of additional aircraft, if any, scheduled between 2016 and 2021. Additionally, the revised delivery schedule includes terms and conditions consistent with the original agreement and allows the Company the confirmation rights described below.
Under the current 787-9 purchase agreement, except as described below, American will not be obligated to purchase a 787-9 aircraft unless it gives Boeing notice confirming its election to do so at least 18 months prior to the scheduled delivery date for that aircraft. If American does not give that notice with respect to an aircraft, the aircraft will no longer be subject to the 787-9 purchase agreement. These confirmation rights may be exercised until a specified date, May 1, 2014 under the current agreement, provided that those rights will terminate earlier if American reaches a collective bargaining agreement with its pilots union that includes provisions enabling American to utilize the 787-9 to American's satisfaction in the operations desired by American, or if American confirms its election to purchase any of the initial 42 787-9 aircraft. While there can be no assurances, American expects that it will have reached an agreement as described above with its pilots union prior to the first notification date. In either of those events, American would become obligated to purchase all of the initial 42 aircraft then subject to the purchase agreement. If neither of those events occurs prior to May 1, 2014 under the current agreement, then on that date American may elect to purchase all of the initial 42 aircraft then subject to the purchase agreement, and if it does not elect to do so, the purchase agreement will terminate in its entirety.
qqflyboy From United States of America, joined Oct 2003, 2299 posts, RR: 13
Reply 6, posted (2 years 6 months 2 weeks 2 days 12 hours ago) and read 8404 times:
As I understand it, the May, 2014 deadline and 18 month requirement are separate. AA has until May, 2014 to make their intentions known regarding the MOU, but it may not (and likely won't) take that long. Once AA has acceptable agreements in place, and notify Boeing, they will receive their first a/c 18 months later (obviously providing the a/c is certified and available). For AA to meet their current proposed delivery schedule, they'd need to have agreements in place by June 2013. That is plenty of time, and AA more than likely will be out of bankruptcy by then. Based on Boeing's schedule, AA still anticipates taking delivery of their first 789 late in 4Q14.
On the subject of financing, AA has already received permission from the court to go ahead with aircraft orders and acquisitions, and the company even asked the court to reiterate its support. We should hear more form the court on the subject at the next court date, which is July 19.
The views expressed are mine alone and do not necessarily reflect my employer’s views.
AADC10 From United States of America, joined Nov 2004, 2103 posts, RR: 0
Reply 8, posted (2 years 6 months 2 weeks 2 days 9 hours ago) and read 6808 times:
I would not feel too sorry for AA. They probably got some compensation for the delay and they would have a lot of difficulty paying for new aircraft until they exit Ch. 11.
Quoting scouseflyer (Reply 1): It's very possible that if this order is (ever) confirmed they will end up being delivered to an airline that's not even called AA by 2015 - USAir 789's anyone?
Even if AA merged with DL they would probably keep the AA name. Between AA and US, they would absolutely keep the AA name, where Doug Parker once worked under Bob Crandall. When speculation about UA and CO started, some thought that the Continental name would survive because it had a better reputation but name recognition is far more important than reputation and there was little doubt that United would be the surviving name.
YXwatcherMKE From United States of America, joined May 2007, 1030 posts, RR: 2
Reply 10, posted (2 years 6 months 2 weeks 2 days 6 hours ago) and read 5227 times:
Quoting Stitch (Reply 9): Quoting spiritair97 (Reply 7):
The weather must be pretty bad if a semi-transcon delivery flighth is delayed 3 hours.
The Seattle area has been pummelled with thunderstorms this morning - lots of lightning and monoon rain.
Sure wish we could have that kind of rain in the MKE region it has been 32 days since with have had any rain. I would love to see an inch of rain over the region.
And I'm sure once BK is done the 789 will be on the books as firm order.
[Edited 2012-07-13 17:19:09]
I miss the 60's & 70's when you felt like a guest on the plane not cattle like today
kiwiandrew From New Zealand, joined Jun 2005, 8654 posts, RR: 13
Reply 11, posted (2 years 6 months 2 weeks 2 days 2 hours ago) and read 4139 times:
Quoting AADC10 (Reply 8): I would not feel too sorry for AA. They probably got some compensation for the delay
I admit that I don't quite understand how these agreements work, but if AA have never actually firmed their order due to the lack of an agreement with their pilots is there anything Boeing needs to compensate them for ?
Moderation in all things ... including moderation ;-)
Stitch From United States of America, joined Jul 2005, 31642 posts, RR: 85
Reply 12, posted (2 years 6 months 2 weeks 1 day 16 hours ago) and read 3256 times:
Quoting kiwiandrew (Reply 11): I admit that I don't quite understand how these agreements work, but if AA have never actually firmed their order due to the lack of an agreement with their pilots is there anything Boeing needs to compensate them for?
I would expect not. AA has delivery positions assigned to them that they need to formally exercise ~18 months prior or they revert back to Boeing.
ckfred From United States of America, joined Apr 2001, 5333 posts, RR: 1
Reply 13, posted (2 years 6 months 2 weeks 1 day 14 hours ago) and read 3074 times:
If the Tentative Agreement that is out for vote with APA membership is approved within the next month (I think the court has delayed AA's motion to terminate the current contract until early August), will AA then seek to confirm its 787 order with Boeing?
Stitch From United States of America, joined Jul 2005, 31642 posts, RR: 85
Reply 14, posted (2 years 6 months 2 weeks 1 day 13 hours ago) and read 2964 times:
Quoting ckfred (Reply 13): If the Tentative Agreement that is out for vote with APA membership is approved within the next month (I think the court has delayed AA's motion to terminate the current contract until early August), will AA then seek to confirm its 787 order with Boeing?
I believe AA have stated the deal is contingent upon APA approving a new contract, so if APA does so, that would in theory clear AA to request permission from the BK judge to sign the MoU and make it an order. I would expect the Creditor's Committee would have input on the decision, though.