American Airlines said Friday it is delaying delivery of 22 new Airbus A350s. The announcement adds to growing concerns in the industry that demand for big new jetliners is headed for a downturn after years of record high levels.
Several airlines have opted to put off taking new, more-efficient jetliners and fly older models. It makes more financial sense for them given persistently low oil prices and the number of readily-available older jets.
“It’s an indication that airlines are almost certainly going into a cyclical downturn,” Sash Tusa, an analyst at Agency Partners, told Bloomberg. “U.S. airlines have been by far the most profitable part of the global airline market, and if U.S. airlines are now starting to defer capacity, that doesn’t send a positive signal across the rest of the industry.”
Tusa recommends selling shares of Airbus and A350 engine-provider Rolls-Royce Holdings.
American delayed delivery of five Dreamliners last year.
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