June 19, 2005
Air Canada has canceled a USD$6 billion order for 32 Boeing jets after the airline's pilots rejected an agreement on costs related to the jet purchase.
"The company accepts the pilots' decision and has notified Boeing of the order cancellation," Air Canada said in a statement.
The April 25 agreement with Boeing for 18 of its 777 jets and 14 of its 787 Dreamliners was subject to the Air Canada pilots' union ratifying an agreement on costs and other matters related to use of the jets. The airline had reached a tentative agreement with the pilots earlier this month.
Air Canada said it was disappointed by the cancellation, for which it is not subject to a penalty from Boeing.
The airline added that it would turn to the used aircraft market to find alternative aircraft to the three Boeing 777-300ER jets contemplated for 2006 delivery under the canceled order.
"The critical component of the Boeing order were the 787 aircraft scheduled for delivery in 2010 and beyond to replace our Boeing 767 fleet. In time we will readdress this requirement," Air Canada said.
The order cancellation may bring Airbus back into the fleet renewal plans at Air Canada, which already flies the European aircraft maker's planes.
The airline had planned to renew its long-range, wide-body fleet with the Boeing jets in efforts to lower operating costs and improve efficiency. Air Canada did not mention Airbus in its statement.
The airline, which is Canada's largest, emerged from 18 months of bankruptcy protection at the end of September 2004 with a much-reduced work force and debt level and a trimmed back aircraft fleet.
(Reuters)