DALLAS (AP) — Airlines are assessing the damage and holding meetings with Boeing about possible compensation for stopping using the company’s problematic 737 Max aircraft. On Thursday, two of the largest U.S. airlines that have Max aircraft in their fleet updated their estimates of how the aircraft affected their revenue.
American Airlines noted that its 2019 earnings will be reduced by $400 million, $50 million more than its previous estimate. Meanwhile, Southwest Airlines announced that because it took fewer planes after stopping using the Max, it will end its services at Newark Airport in New Jersey.HELP US Click the Google News star and follow usSouthwest removed the plane from its program until early January, two months after American did the same, to allow for a retraining of drivers and avoid problems for holiday season travelers. Airline executives, however, back the plane and bet that passengers will get back on it. The Max was discontinued from March, after he was involved in two accidents that killed 346 people. American Airlines President and CEO Doug Parker said that once the Federal Aviation Administration approves the changes Boeing made to the plane and the pilots feel comfortable and trained enough to fly, that will “mark the difference in consumer attitudes about the aircraft.” This week, Boeing reported the biggest loss in a quarter it has had, of nearly $3 billion, after having $5.6 billion available to compensate its customers. Boeing CEO Dennis Muilenburg said he expects the Max to be back in operation in October, after the company completed some software updates in September. Boeing’s previous forecasts have been overly optimistic, although Muilenburg admitted there is a risk that more problems will be encountered on the plane. When the aircraft was ordered to stay grounded in March, Southwest owned 34 of them, the largest number of the dozens of airlines using the aircraft. That accounts for nearly 5% of Southwest’s fleet and 8% of the airline’s passenger carrying capacity. Without those aircraft, Southwest has cancelled about 180 flights a day since January 5, nearly 5% of its program, and took the unusual action of decreasing its operations rather than increasing its passenger transport capacity. American Airlines, which had 24 Max aircraft, cancels about 115 flights a day until November 2, because it stopped using the model. Airline executives said last-minute bookings were reduced for more than a month after they stopped using the Max because business travelers feared they were stranded by a cancellation. The company said the problem with the Max snatched 175 million of its second quarter profits from it.
