American’s New Math: 2 Dozen 737 Max Jets Equals a $350 Million Hit
Photo Credit: An American Airlines Boeing 737-800. American grounded 14 of the jets in March because of shoddy interior repair work. American Airlines
Skift Take
American Airlines is making money, but its financial performance has not been as strong as United's and Delta's. It's not clear whether that will change soon, given the 737 overhang.
American Airlines expects to take a pre-tax earnings hit of $350 million this year because it cannot fly its two dozen Boeing 737 Max 8 airplanes — and that's assuming the jets return to service by mid-August, as American and its competitors hope.
At first glance, this seems like an oversize number. Counting regional jets, American has more than 1,500 airplanes, and the Max accounts for a relatively small percentage of its capacity. American has an average of 6,700 daily flights, and in the second quarter, it's canceling 115 each day through August 19 because it cannot fly the Max.
But Derek Kerr, American's chief financial officer, said the math is more complicated.
The financial impact is disproportionate, as most of the revenue from
