American Airlines’ bankruptcy restructuring should make the carrier more profitable and able to purchase more aircraft, said the head of Boeing Co’s commercial airplane division
Speaking at a Credit Suisse aerospace and defense conference in New York, Jim Albaugh said the bankruptcy filing by the AMR Corp unit would give the carrier long-term stability. But in the short term, American may ask to restructure some aircraft leases, he said.
“Taking a long-term view, the American bankruptcy is a very positive thing for them and a very positive thing for us,” Albaugh said. “By going through a restructuring, they’re going to come out of it a very competitive airline.”
American, the third-largest U.S. airline, suffers from higher labor costs than its peers and filed for Chapter 11 bankruptcy protection on Tuesday, Reuters reports.
This year the carrier placed a giant split order for 460 single-aisle jets worth up to $40 billion with Boeing and its European rival Airbus, a unit of EADS.
Bankruptcy could jeopardize parts of the order that are not yet firm. On Tuesday, AMR Chief Executive Tom Horton called the order “rock solid.”
Yet, when asked whether AMR would be able to firm up its Boeing order in Chapter 11, Albaugh said the answer was to be determined.
“There are a lot of questions about the bankruptcy that we need to understand better and probably that AMR needs to understand better as well,” Albaugh said after his speech.
Meanwhile, Airbus sales chief John Leahy told the conference that American Airlines has been clear that it intends to confirm its plane contracts.
Albaugh said Boeing would work hard to win business from United Continental Holdings the world’s largest airline, which sources have told Reuters could order as many as 150 jets.
“Both United and Continental have been great partners and we’re going to do everything we can to win that,” Albaugh said.