Russia's S7 cancels Boeing 787 order

NEW YORK (Reuters) – Russia's S7 has become the first airline to cancel a major contract for Boeing Co's (BA.N) 787 Dreamliner, as the country's airlines face their worst-ever financial crisis.
The order for 15 787s, due to be delivered in 2014, was worth about $2.4 billion at list prices. The cancellation is a blow for Boeing, whose new, lightweight jetliner has not yet left the ground and is about two years behind schedule.
S7, the main domestic rival to Russia's flag carrier Aeroflot (AFLT.MM), will seek to lease the planes instead, the company said on Thursday.
"S7 retains interest in using the Dreamliner and at the moment is looking into receiving the planes under a leasing scheme at an earlier date, for which it is in negotiations with several leasing companies," it said, without naming the leasing company.
Russia's airlines were hit hard by high oil prices and global economic turmoil, which left about a dozen of them unable to fly last year.
The resulting crisis prompted Russia's government to create a new state giant, Russian Airlines, to absorb crippled carriers.
Boeing, which has faced a series of production problems on the 787 and a two-month strike last year by its assembly workers, is expecting more cancellations from airlines this year as the demand for flights wanes.
The plane maker warned on Wednesday that an airline had canceled a 787 order, but did not say which.
Boeing shares were down 4.5 percent to $41.30 in late morning trade on the New York Stock Exchange.