Lufthansa switches Boeing 777 orders to options in fleet rethink

Bloomberg

Deutsche Lufthansa AG is stepping back from a commitment to buy 14 Boeing Co 777X wide-body jets valued at $6.2 billion as it slows fleet growth in an effort to cut capital spending and rein in capacity.
Announced as a regular order six years ago as part of a 34-jet deal, the aircraft have been re-designated as “options,” Lufthansa said in a quarterly earnings report. The change is normally in the other direction, with options upgraded to firm purchases. The airline said the deal had always been “reconfirmable” and that the move doesn’t amount to a cancellation.
Lufthansa has been scrutinising its backlog for the biggest wide-body jets as it increasingly opts for smaller twin-aisle planes. The company plans to get rid of some Airbus SE A380 superjumbos and in March ordered 787 Dreamliners, which carry fewer people than the 777, for the first time.
Chief Executive Officer Carsten Spohr told staff as long ago as 2017 that the 777-9 order was under review.
Lufthansa said in its third-quarter statement that the orders for the 14 planes are “not sufficiently certain to be exercised.” The switch to option status is a “more sensible approach to capacity growth,” Sanford C Bernstein analyst Daniel Roeska said in a note.
Boeing said the aircraft weren’t listed as orders in
its backlog and that Lufthansa “continues to have a firm order for 20 777Xs and 14
options.”
The 777X’s service entry has shifted to early 2021 from late next year following a delay concerning the model’s
General Electric Co engines. Launch customer Emirates may juggle its order book in light of the development and stuttering demand for travel in the Persian Gulf.