Looks like AA will be trying to get rid of the A318 orders, and United will try to dispose of US' A330s.
Airlines: Dividing Up The Skies --
Boeing Could Gain From AMR-TWA Pact
By Jeff Cole and Susan Carey
The Wall Street Journal
Boeing Co. could strengthen its competitive position if one of the jet maker's largest and most loyal customers, AMR Corp.'s American Airlines, winds up acquiring Trans World Airlines and certain assets of US Airways Group Inc. But there is one ugly complication: The jet maker could be stuck trying to find new operators for 50 of its slow-selling 717 jets that TWA had promised to lease.
Boeing will face a problem if American Airlines proceeds with its proposed acquisitions of TWA and some assets of US Air, because American doesn't want the 717 jet, which Boeing has had difficulty selling. TWA has taken delivery of 15 of the 100-seat 717s, and that carrier's 50 total orders represent about one-third of all orders for the aircraft, which has been offered to airlines since the mid-1990s.
Beyond that drawback, however, Boeing officials see the prospect of expanding their presence in the holdings of American Air, as any TWA acquisition proceeds. American officials have said they intend to remain a Boeing-only jet operator. TWA operates an all-Boeing fleet of 189 planes, and some officials of Seattle-based Boeing hope that a large majority of those would remain at American through leases.
Altogether, Boeing is carrying at least $1.3 billion in financing for about 60 planes, including the 15 smaller 717s, plus two bigger 757s and about two-dozen 150-seat MD-80 airliners, according to people familiar with the circumstances. Leasing companies, such as International Lease Finance Corp. of Los Angeles also would have to make new arrangements to place their TWA planes.
A major concern for Boeing is whether it is able to maintain cash flows and various measures of value for the planes it is at present leasing to TWA. For now, Boeing executives believe they can slip through any scenario without taking a charge to earnings because of reduced jet valuations. A Boeing spokesman said the company is making no change in its financial guidance to investors for now,because the carriers haven't acted on their plans. In response to questions about prospects for the 717, he said that the 717 isn't dependent on a single customer.
People familiar with American's position say that carrier already has indicated it doesn't want the 717 jets, which are updated versions of the venerable McDonnell Douglas DC-9. Under certain bankruptcy provisions, that would be exercised as part of TWA's planned filing, American could choose to accept or reject terms of any existing leases.
Meanwhile, rival plane maker Airbus Industrie of Europe faces the prospect of losing its own TWA orders for 75 of that manufacturer's "A320" family of small-plane sizes. TWA has been scheduled to start taking delivery of those planes during the next few years. American officials may not want to mix the new Airbus types into their fleet. Some Airbus officials signal that the complex transactions face a tough series of hurdles, and they plan to defend the value of their TWA order contracts through any court proceedings or transactions.
Analysts suggest there is a silver lining for Airbus, in that 90 of the smaller airliners it has placed at US Air would go to United. That is because United would get the planes as part of its bid to buy most of US Airways. A total of 150 of the smaller planes have been ordered by US Airways and all unfilled order agreements would transfer to United, which already operates many smaller Airbus planes.
Some larger Airbus A330 planes on order by US Airways also should be transferred to United, but some United officials have hinted they don't want those planes.