El Al announced cancellation of 787 options

However, the company said it was keeping its order for two Boeing 777s, which will be delivered in the summer of 2007
 
In a statement to the Tel Aviv Stock Exchange El Al Israel Airlines announced last week it had cancelled its option to buy 10 Boeing 787 jets. El Al officially explained that it had not come to an agreement with the manufacturer within the timeframe Boeing had set.
 
El Al said, however, it was keeping its order for two Boeing 777s, which will be delivered in the summer of 2007. In early November 2006, El Al took possession a new Boeing 767 for long-haul routes.
 
The company was meant to purchase the 787 aircraft by 2014, at a cost of about USD 800 million and USD 1 billion.
 
The carrier said it was considering other options for jets, including both Boeing and Airbus aircraft.
 
The Israeli airline has so far only bought Boeing aircraft. Last July El Al gave a warning that it expected to make a loss in 2006 due to high fuel costs, stiff competition from foreign carriers, and the war in the north fighting between Israel and Hezbollah guerrillas, which greatly cut tourism during Israel's peak summer tourist period.
 
Sources in El Al explained that the decision to cancel the options was expected to improve the company’s financial situation. The company said it was re-organizing, with changes such as management retirement, and contracted employee dismissals, as well as the sale of several aircraft.
 
Following El Al's announcement, Boeing's spokesman in Tel Aviv said that Boeing still intends to work closely with the Israeli carrier, but that the Israeli carrier had decided to take additional time to conduct further fleet evaluation.