Boeing Sues Airline Over Canceled Order

Boeing Co. sued US Airways Group Inc. Friday over the airline’s decision to cancel its order for 737 and 757 aircraft.

The lawsuit claims that US Airways breached its contract with Boeing when the Arlington, Va.-based carrier refused to make a payment for the 757 aircraft in November 1996 and said that it wouldn’t accept delivery of eight 757s and 40 737s it had ordered. At the time, US Airways said it intended to reconfigure its fleet with jetliners from Airbus Industrie.

US Airways said it intends to “vigorously defend against the lawsuit.”

Liz Verdier, a Boeing spokeswoman, said the Seattle-based aircraft maker was “disappointed” to resort to the legal system to settle the matter with the long-time customer.