American, Southwest Airlines Say Boeing 737 Max Grounding Will Cost Over $1 Billion

A Boeing 737 cockpit

By Jesse Sokolow on 24 October 2019
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The worldwide grounding of Boeing 737 Max aircraft, now in its seventh month, is costing the airline industry billions of dollars and the exact figures are starting to come out as airlines release third-quarter financial information.

The grounding, which has yet to be lifted, has cost American Airlines and Southwest Airlines at least $945 million and that figure is expected to rise in the weeks ahead.

American Airlines, which has 24 of the beleaguered airliners and which posted earnings slightly ahead of Wall Street estimates, said that the third quarter had been challenging

The quarter’s “results should have been better,” said American CEO Doug Parker. “Our third quarter was impacted by the continued grounding of the Boeing 737 Max” as well as some operational issues.

Meanwhile, Southwest, which reported a strong third quarter and which has 31 Max jets, said that the costs will continue well into 2020.

“The operating income reduction from the Max groundings is estimated to be $435 million for the nine months ended September 30, 2019, and we expect the damages to continue to grow into 2020,” said Gary Kelly, the airline’s CEO.

United Airlines, which has 14 737 Max jets in its fleet, has not yet released third-quarter earnings details but the airline is expected to face millions of dollars in costs due to the grounding.

Boeing expects the 737 Max to return to the skies before the end of the year but due to ongoing issues in obtaining recertification for the aircraft type it has consistently fallen behind in meeting its own projected deadlines.

(Photo: Accura Media Group)

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