American Cuts Orders for Jets

DALLAS â€”  American Airlines announced Thursday that it has reached tentative agreements with two jet makers to slow delivery of planes that it has ordered between now and 1995.

American Chairman Robert Crandall, in a private speech to analysts in New York on Wednesday night, detailed the airline’s $8.2-billion cut to its five-year capital spending plan that would have originally cost $22 billion.

Citing financial upheaval in the airline industry, Crandall said American would build its fleet of 602 jets to 682 by the end of 1995 instead of 775 as originally planned.

American will defer or cancel options to purchase 93 jets valued at $5.2 billion.

In addition, the airline has reached agreements with Boeing Co. and McDonnell Douglas Corp. to push back the delivery time for aircraft that it has on firm order. The delay and other initiatives will trim capital spending by about $3 billion.

American, the nation’s largest airline, will continue to grow, but it has decided to cut the pace because of the industry’s deep troubles. Crandall had already said the spending plans would be cut $5 billion, with more cuts to be announced, and Wednesday’s speech outlined those cuts.

“Should conditions change, we have the ability to restart our growth at whatever rate then seems appropriate,� Crandall said.

Signaling an intention not to exercise its purchase options now gave American some leeway in negotiating to delay the delivery of the aircraft it has on firm order with the companies.

A typical jet takes 18 months to build. “Because of that lead time, we have to look pretty far ahead of time to decide what most effective production rates are,� said Randy Harrison, spokesman for Boeing.