American Airlines: $350M impact from 737 Max 8 grounding

By Dom Difurio / The Dallas Morning News

DALLAS — American Airlines has estimated the grounding of Boeing 737 Max 8 aircraft will have a $350 million impact on the company in 2019 meanwhile posting record first quarter revenue of $10.6 billion, according to the company.

It estimates that in just the first quarter, Max 8 groundings cost the company $80 million in income and resulted in the cancellation of 1,200 flights.

“We want to thank our 130,000 team members for the outstanding job they did to take care of our customers, despite the challenges with our fleet during the quarter. Their hard work led American to record revenue performance under difficult operating conditions,” CEO Doug Parker said in a statement.

Although the Max 8 aircraft represent a small portion of the airline’s fleet, the grounding had an outsized impact on the company’s income, the company said on a call with analysts and media Friday morning.

The company operates 24 Boeing 737 Max 8 aircraft in its fleet, all of which were grounded by a Federal Aviation Administration order in March after the Ethiopian Airlines flight 302 crash drove the death toll resulting from the aircraft to 346.

The U.S. and other countries put a halt on flights on the Max blaming the plane’s anti-stall software.

“We are confident the max will be re-certified prior to August 19,” American Airlines Chief Operating Officer Robert Isom said Friday of the company’s talks with the FAA and Boeing.

The company has removed the planes from its fleet through that date. Parker said that it previously had told the FAA and Boeing it needed 95 percent certainty when deciding the Aug. 19 date. Southwest Airlines, which operates the largest fleet of Max 8 aircraft in the country, has canceled its flights on the plane through Aug. 5.

The company estimated it’s had to reaccommodate 700,000 customers for 15,000 flight cancellations through mid-August resulting directly from the grounding order.

American also estimates rising fuel prices will cost the company $650 million more than it had previously anticipated, though CEO Doug Parker told analysts the costs were “not much higher or much different than they were a year ago.”