Boeing 737 MAX Grounding Cost For American Airlines

Boeing 737 MAX Grounding Cost For American Airlines. American Airlines expects the total cost of grounding the Boeing 737 Max to be approximately USD 540 million in pre-tax earnings in 2019, compared to a previous estimate of USD 400 million.

The Dallas / Fort Worth-based airline received only USD 140 million in the third quarter for the grounding of its fleet of 24 Max aircraft, the company said in its quarterly update to investors on October 24.

boeing 737 max american airlines

Boeing 737 MAX Grounding Cost For American Airlines

CEO Doug Parker said the airline expects Boeing compensation for losses incurred and "wants to make sure that Boeing shareholders share the cost of Boeing failures, not shareholders." American. "

Negotiations on this compensation are "continuous, fast and productive," says Parker. "There is still no real precision at this stage, but we are very sure that the losses incurred by AA will not be borne by AA shareholders."

The airline has now removed the plane from its schedule until January 15, approximately one more week than previously planned.

In addition to the current fleet of 24 Max aircraft in stock, the airline ordered 76 additional aircraft, five of which were scheduled for delivery in the third quarter. After grounding on March 13 after two accidents, American canceled 9,475 flights in the third quarter.

Once the 737 Max was recertified by the Federal Aviation Administration (FAA), Mr. American announced that he would put the plane back into service in stages. The start-up will begin with five planes leaving 20 times a day, followed by 12 planes two weeks later and seven more two weeks later.

"We are reasonably sure that we will have five planes on January 15," Parker adds. "We believe the FAA is demonstrating true leadership in security. Once it is re-certified, it will be the safest aircraft in the world and we look forward to that date."

The company had planned to have an additional 26 Max units by the end of 2020, for a total of 50. According to 10 of these aircraft already built, ten of them have already been built, but it is uncertain to know when they will be delivered or when they will be built and delivered.

"We want these planes. Once they are certified and the pilots are trained, we would like to get them as quickly as possible," says Parker. "In any case, we would like to speed up the delivery schedule."

Net income in the third quarter increased 14 percent to USD 425 million from USD 372 million the previous year, thanks to lower fuel costs, the company said in its quarterly investor newsletter. Revenue for the quarter increased 3% to a record USD 11.9 billion, driven by strong passenger demand. Revenue per passenger per available seat (ASR) reached 14.50 cents, 3% more than in the same quarter of the previous year.

"Our earnings have been hampered by two things that we hope to fully support next year." Whatever the revenue in 2019, it will be a little better in 2020, "says Parker.