By Maria Sheahan
FRANKFURT, March 16 (Reuters) - Air Berlin cancelled about $1.7 billion worth of firm orders for Boeing's 787 Dreamliner aircraft amid uncertainty over whether it will expand the number of its long-haul flights.
Air Berlin, Germany's second-biggest airline after Lufthansa , said on Tuesday that it has cut its order to 15 planes from 25. It also reduced the number of options for further 787 aircraft to five from 10, it said.
The airline had ordered the planes in 2007, when it planned to buy charter airline Condor from Thomas Cook. Air Berlin backed out of the planned takeover a year later, citing soaring oil prices and worsening economic conditions.
Since then, the company has left investors wondering what it planned to do with the 787 aircraft order for the twin-aisle, mid-sized planes that can each carry about 250 people long distances.
'We will continue to fly long-haul, but the bulk of our business is medium-haul,' a spokesman for the company said. He did not comment on whether Air Berlin will expand the number of its long-haul flights in the future.
A number of airlines cancelled or deferred aircraft orders amid the industry's worst downturn in decades last year as they moved to shore up cash rather than splurge on planes. Airlines commonly pay for new aircraft upon delivery.
The drop in global passenger demand led Boeing and rival Airbus to face their worst annual order tally last year in at least 15 years.
Under Air Berlin's original deal with Boeing, the German carrier was to receive its 787 aircraft between 2013 and 2017. Air Berlin also said on Tuesday it is deferring delivery of nine Boeing 737 aircraft to 2015 from 2010 or 2011.
Shares of Air Berlin were down 1.49 percent at 3.980 euros at 1216 GMT. The stock has advanced by almost 18 percent over the past 12 months.
Air Berlin had said last year that it could cancel or defer some of its outstanding aircraft orders, which also included Q400s built by Bombardier and A320-family aircraft from Airbus.
'For Air Berlin, the agreement means a significant reduction of its financial obligations,' it said on Tuesday.
The company last year placed a convertible bond and launched several capital increases to generate cash and cut its debt, which stood at just over 500 million euros ($683.2 million) at end-September. It had said it planned further measures to reduce debt, such as the sale of some of its aircraft.
Air Berlin had 129 aircraft at the end of September, the bulk of which were from the Airbus A320 family as well as Boeing 737 planes, usually used for short- and medium-haul flights.
(Editing by Sharon Lindores)
($1=.7318 Euro) Keywords: AIRBERLIN/ (maria.sheahan@thomsonreuters.com; +49 69 7565 1286; Reuters Messaging: maria.sheahan.thomsonreuters.com@thomsonreuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
FRANKFURT, March 16 (Reuters) - Air Berlin cancelled about $1.7 billion worth of firm orders for Boeing's 787 Dreamliner aircraft amid uncertainty over whether it will expand the number of its long-haul flights.
Air Berlin, Germany's second-biggest airline after Lufthansa , said on Tuesday that it has cut its order to 15 planes from 25. It also reduced the number of options for further 787 aircraft to five from 10, it said.
The airline had ordered the planes in 2007, when it planned to buy charter airline Condor from Thomas Cook. Air Berlin backed out of the planned takeover a year later, citing soaring oil prices and worsening economic conditions.
Since then, the company has left investors wondering what it planned to do with the 787 aircraft order for the twin-aisle, mid-sized planes that can each carry about 250 people long distances.
'We will continue to fly long-haul, but the bulk of our business is medium-haul,' a spokesman for the company said. He did not comment on whether Air Berlin will expand the number of its long-haul flights in the future.
A number of airlines cancelled or deferred aircraft orders amid the industry's worst downturn in decades last year as they moved to shore up cash rather than splurge on planes. Airlines commonly pay for new aircraft upon delivery.
The drop in global passenger demand led Boeing and rival Airbus to face their worst annual order tally last year in at least 15 years.
Under Air Berlin's original deal with Boeing, the German carrier was to receive its 787 aircraft between 2013 and 2017. Air Berlin also said on Tuesday it is deferring delivery of nine Boeing 737 aircraft to 2015 from 2010 or 2011.
Shares of Air Berlin were down 1.49 percent at 3.980 euros at 1216 GMT. The stock has advanced by almost 18 percent over the past 12 months.
Air Berlin had said last year that it could cancel or defer some of its outstanding aircraft orders, which also included Q400s built by Bombardier and A320-family aircraft from Airbus.
'For Air Berlin, the agreement means a significant reduction of its financial obligations,' it said on Tuesday.
The company last year placed a convertible bond and launched several capital increases to generate cash and cut its debt, which stood at just over 500 million euros ($683.2 million) at end-September. It had said it planned further measures to reduce debt, such as the sale of some of its aircraft.
Air Berlin had 129 aircraft at the end of September, the bulk of which were from the Airbus A320 family as well as Boeing 737 planes, usually used for short- and medium-haul flights.
(Editing by Sharon Lindores)
($1=.7318 Euro) Keywords: AIRBERLIN/ (maria.sheahan@thomsonreuters.com; +49 69 7565 1286; Reuters Messaging: maria.sheahan.thomsonreuters.com@thomsonreuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
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