DUBAI/ABU DHABI (Reuters) – Etihad Airways is exploring options with Boeing to cancel or defer orders for 777X jets worth billions of dollars in a fresh sign of the carrier’s financial strains and potentially squeezing Boeing’s newest model, four sources familiar with the matter said.

Etihad, owned by Abu Dhabi, has been reviewing its fleet plans as part of a strategy overhaul launched after a nearly $2 billion loss in 2016.

The airline’s management believes it no longer needs all of the 25 777X twin-engined jets and may be willing to incur penalties for cancellations rather than be saddled with future recurring losses stemming from overcapacity, the sources said.

Etihad and Boeing declined to comment.

Etihad is a launch customer of the 777X: an upgrade to Boeing’s successful mini-jumbo series that includes plans for the world’s largest twin-engined jetliner, the 406-seat 777-9 which is due to enter service in 2020.

Cancelling or deferring orders for jets earmarked for production at such an early stage of the ambitious new program could create a headache for Boeing as it switches to the new model.

Although twinjets like the 777X have prevailed over larger and less-efficient four-engined aircraft like the A380 and Boeing 747, analysts say demand for such aircraft remains relatively thin due to cost and size. The 777-9 version has a list price of $426 million.

Reuters