American Airlines is cutting flights to Europe and Latin America over delays caused by Boeing’s 787 Dreamliner, a growing source of worries for the flying public and the U.S. carrier’s labor unions.
The A5-34 Dreamliner, American’s smallest domestic 787 model, will be ground starting May 8, Chief Executive Doug Parker said in an interview on Friday.
“Our fleet has been flying pretty well lately,” Parker said. “The 787, in many respects, has struggled to complete due to some production issues. … That’s caused further service degradation.”
The foreign network of 787, which can seat up to 314 passengers, is one of a few remaining pieces of domestic Boeing production following the withdrawal of the ailing 757 from its array of narrow-body jets worldwide since 2016.
The 787 fleet faces an array of challenges, including overheating lithium-ion batteries, design flaws and cutbacks that have reduced its average full flight time of around 5 hours and 15 minutes, compared with 5.75 hours for a Boeing 777, according to data from aircraft tracking service FlightRadar24.
Boeing spokesman Marc Birtel said Boeing has reduced annual production from 42 to 30 Dreamliners after industry pressures caused delays, and had also cut the weight of the first 787 Dreamliner to close some manufacturing costs.
Airlines are not required to be happy with the wide-body Dreamliner and have reservations over its reliability, but they need extra planes.
“Boeing is trying to get 737s in place to create the hangover in order to make up for that, but you’ve got to figure these planes will be in the market for many years,” said Jeff Fossett, CEO of Anantara Airlines, which operates joint venture A350-900 services with Lufthansa.
Parker is under pressure to return the airline to profitability after American’s 2017 operating margin more than halved to 1.5 percent.
The May-dated 787 order cancellation will push first-quarter and 2018 passenger unit revenue down about 2.5 percent, he said.
U.S. passenger unit revenue fell 3.8 percent in the fourth quarter from a year earlier, according to a Feb. 21 presentation.
American currently has 30 A5-34s on order, but Parker said the carrier has decided to send some to larger mainline jets in the second half of the year.
American has ordered 200 737 MAX planes in January, but instead of buying 65 Boeing 737s from the smaller A350-900, it plans to buy 60 787-9 Dreamliners, plus four more models with more seating. American is also building 14 Boeing 787-10 jets.
Parker said those planes will be leased.