American Airlines says that the grounding of its B737 Max aircraft will impact its pre-tax profits for this year by approximately $400 million.
Boeing’s Max aircraft are currently grounded worldwide, following two fatal crashes involving the jets, and AA recently extended the cancellation of its B737 Max flights until November 2, as speculation grows that the aircraft may not return to passenger service until 2020.
Announcing second quarter pre-tax profits of $882 million, the carrier said that its income in the second quarter alone had been negatively impacted by approximately $175 million.
AA currently has a fleet of 24 Max aircraft, with another 76 on order, seven of which were due to be delivered during the second quarter of this year.
The airline said that its cost per available seat mile (CASM) rose 4.8 per cent year on year, “driven primarily by lower than planned capacity due to the Boeing 737 Max grounding and operational disruptions related to an illegal work slowdown by our mechanics’ union in an effort to influence contract talks”.
Commenting on the results chairman and CEO Doug Parker said:
“Our team members did a tremendous job to deliver solid results despite a challenging start to our summer.
“Their extraordinary efforts led to an increase in earnings and record revenue performance, and we thank our team for their expertise and care for our customers.”
“These strong results in the face of near-term adversity, coupled with our ongoing initiatives, give us great confidence in the future of American Airlines.”