Boeing, US Airways Settle Contract Dispute

US Airways Group Inc. and Boeing Co. said they settled a legal dispute involving a US Airways 1996 cancellation of airplane orders.

US Airways acknowledged a breach of contract and made an undisclosed payment to Seattle-based Boeing.

“Based on mutual business considerations, Boeing and US Airways have resolved our differences,” the companies said in a statement.

Boeing’s lawsuit against the carrier and a countersuit by US Airways stemmed from the airline’s refusal in 1996 to accept delivery of eight Boeing 757 aircraft or to make a $3-million partial payment for them.

Arlington, Va.-based US Airways had disclosed in a filing with the Securities and Exchange Commission that it would have been liable for $450 million in damages for breaching the 757 contract and another contract for 40 Boeing 737s.

The carrier had filed a counterclaim against Boeing for $45 million in deposits and “past overcharges,” which also was dropped as part of the settlement.

Neither Boeing nor US Airways, a longtime Boeing customer, would comment further.

US Airways fell $3.31 to close at $73.69 on the New York Stock Exchange.

Boeing stock fell 81 cents to close at $50.69, also on the NYSE.