The world’s biggest airline, American Airlines, announced yesterday that they would be canceling flights on the 737 MAX through to November. This is due to the ongoing grounding of the jet and is the fourth time the carrier has extended its cancellations. It follows swiftly behind United Airlines’ recent extension which is now also through to November.
It is thought that American Airlines will be canceling around 115 daily flights as a result of the MAX grounding, a situation which now looks to continue well into the latter half of the year. The US airline has said it has removed the 737 MAX from its schedules until November 2019. In a statement the airline said,
“American Airlines remains confident that impending software updates to the Boeing 737 MAX, along with the new training elements Boeing is developing in coordination with our union partners, will lead to recertification of the aircraft this year,”
Previously, American Airlines had planned to keep the MAX off its schedule until the 3rd September. CEO Doug Parker has said at the time that he was ‘confident’ it would return by the early part of that month.
It had been using other aircraft for its busiest services, while many others had been canceled and one route was temporarily suspended altogether. The service between Oakland, California and Dallas-Fort Worth was cut on Friday, July 5th, making it the first airline to completely suspend a service as a result of the MAX crisis.
A costly impact
American Airlines, with 24 737 MAX aircraft in its fleet and 76 more on order, is the second biggest operator of the jet in the US. They are not scheduling the planes now through to November 2nd, demonstrating a lack of confidence in Boeing’s determination to have the plane recertified by the fall. Some analysts have speculated that the jet will not return to service this year at all.
In the second quarter alone, American Airlines said that the grounding of the MAX resulted in the cancellations of around 7,800 flights, with an estimated 4,000 canceled in June. This, they told CNBC, cost the $185m in just that quarter.
But the problems at American Airlines extend far beyond the loss of 24 jets. Ongoing labor disputes have led to the carrier accusing mechanics of deliberately grounding aircraft, and then taking far longer than necessary to return them to operation. AA has filed federal lawsuits against the unions representing the mechanics, although the unions strongly deny the accusations.
The good news at American is that the planes they are flying are just about full. Due to reduced capacity in the network, they have been able to charge more for their fares than originally projected. This, combined with lower than expected fuel prices in the last quarter, actually allowed the carrier to raise its price projection for revenue per seat mile, giving them a small bump in share prices too.
Other US MAX operators
Southwest Airlines, the world’s largest operator of the type, had previously removed the aircraft from schedules through to 1st October. More recently, United Airlines had taken the plane out of its plans up until 3rd November. Delta, the remaining airline in the US ‘big three’ has no MAX jets in its fleet, therefore has been unaffected by the ban.