US airlines may be forced to defer or cancel more aircraft orders

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US airlines, which have already downsized, may be forced to defer or cancel more aircraft orders if the prolonged recession further erodes travel demand and continues to choke credit markets. Experts say the possibility for more order modifications in the near future is growing.

That’s bad news for airlines in need of modern aircraft, and also for plane makers.

For US airlines that currently lag foreign rivals in fleet renewal, the need is great for fuel-efficient planes to bolster their competitive positions and to meet potential demand for heightened energy conservation.

Meanwhile, plane makers Airbus and Boeing, who get paid when they deliver aircraft, face a weaker growth outlook. Airlines already are discussing changes to their plane orders, said JP Morgan analyst Joseph Nadol.