USAir canceling eight Boeing 757s Loss-plagued carrier consolidating its fleet with Airbus Industrie

November 15, 1996|By SEATTLE TIMES

SEATTLE -- USAir, which last week ordered 120 Airbus Industrie jets worth an estimated $5.3 billion instead of Boeing 737s, says it will cancel orders for eight Boeing 757s worth about $520 million.

USAir also plans talks with Boeing about canceling 40 more orders for Boeing 737s, worth about $1.4 billion, a USAir spokesman said.

The carrier is consolidating its fleet with the European manufacturer, rather than Boeing, to cut costs.

USAir has lost more than $3 billion since 1989.

USAir, based in Arlington, Va., and operating mostly on the East Coast, has about 200 Boeing 737s. Besides streamlining its fleet, it is reorganizing its route structure and trying to cut labor costs.

The larger 757s were to be delivered beginning in 1998, but the earlier 737 order was renegotiated a few years ago, putting deliveries past 2000.

No immediate impact in production at Renton will be felt if the orders are canceled.

The airline also is considering ordering 20 777 widebody jets, worth an estimated $2.8 billion. A deal might eventually be worked out to exchange the 737 orders for 777s.

L But Airbus also is competing in that category with its A330.

Boeing officials declined comment on the discussions.

Stephen Wolf, USAir chairman, told security analysts in New York this week that he eventually wants to get rid of all smaller Boeing airplanes in his fleet and use Airbus jets in the future.

Such a move would give Airbus a strong foothold in the United States.

In 1992, Wolf also ordered Airbus jets over Boeing airplanes when he was United Airlines chairman.

USAir's most recent Airbus order for A320-series jets included options for 280. They will be used to replace older DC-9s, 737s, F-28s and MD-80s currently in the USAir fleet.

Analysts believe USAir negotiated deep discounts with Airbus and that Boeing refused to go below a certain price.

Boeing had a backlog of more than 660 orders for 737s as of Oct. 31.

Pub Date: 11/15/96

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