American Airlines cancels 737 MAX flights until 2020

0
117

American Airlines Group has extended cancellations of Boeing 737 MAX flights through January 15, running contrary to the U.S. plane maker’s promises that the grounded jets would be flying again before the year-end.

An American Airlines Boeing 737 Max 8, on a flight from Miami to New York City, lands at LaGuardia Airport on Monday morning, March 11, 2019 in the Queens borough of New York City-Getty Images

The largest U.S. airline, which had previously canceled about 140 flights a day through December 3, upped its estimate for the impact of the groundings on third-quarter pre-tax profit to $140 million, $15 million more than a previous estimate.

American’s shares, down about 16% in a rough year for airlines, rose, however, on the company’s statement that lower fuel costs had boosted margins in the third quarter. Boeing shares, buffeted this week by conflicting signals on European regulators’ attitude to the MAX, were also marginally higher.

In July, American Airlines said its full-year profit would fall by about $400 million if the MAX remained grounded through November 2, and that figure is likely to increase now with a spillover effect into 2020.

Boeing’s sales numbers on Tuesday also showed that by the end of September it had delivered only half the number of aircraft it did in the same period of 2018.

Regulators are still reviewing proposed software changes to the grounded plane with no certain timetable for the jet’s return.

American said it expects to gradually resume MAX flights starting January 16, adding that software updates could lead to the Federal Aviation Administration’s (FAA) “re-certification of the aircraft later this year and resumption of commercial service in January 2020.”

The fast-selling 737 MAX has been grounded worldwide since mid-March while Boeing updates flight control software at the center of two crashes in Indonesia and Ethiopia that together killed 346 people within a span of five months.

Priests hold a ceremony beside coffins of victims of the crashed accident of Ethiopian Airlines during the mass funeral at Holy Trinity Cathedral in Addis Ababa, Ethiopia, on March 17, 2019-AFP/Getty Images

Meanwhile, airlines that had purchased the fuel-efficient MAX have canceled thousands of monthly flights as they scramble to meet demand with fewer fleets, eating up profit and hurting some growth plans.

On Monday, the Southwest Airlines Pilots Association sued Boeing alleging that the planemaker “deliberately misled” the airline and pilots about its 737 MAX aircraft.

The grounding of the 737 MAX has wiped out more than 30,000 Southwest Airlines flights, causing over $100 million in lost wages for pilots, the union said. Boeing said the suit lacks grounds.

Leave a Reply