American Airlines Pushes Back Return Of Grounded Boeing 737 MAX To January

Boeing Co BA's grounded 737 MAX continues to weigh on the bottom-lines of carriers, with American Airlines Group Inc AAL stating in a third-quarter operational update on Wednesday that the plane will remain out of service until Jan. 15, 2020, over a month later than the initially communicated schedule.

What Happened

The 737 MAX aircraft was grounded in March by the the Federal Aviation Administration following two fatal crashes. Carriers such as American Airlines, Southwest Airlines Co LUV and United Airlines Holdings Inc UAL suspended operations of the aircraft, incurring additional costs for maintaining the grounded fleet and the logistical burden.

American Airlines said in the update it had to cancel 9,475 flights in the third quarter, negatively impacting pretax income for the quarter by $140 million.

The airline expects the extension of the grounding until mid-January to reduce available seat miles, or ASMs — a measure of capacity — to 70.1 billion in the fourth quarter.

Despite the impact from Hurricane Dorian, the airline said it expects total revenue per available seat mile, or TRASM, to be up about 1.5-2.5% year-over-year in the third quarter versus earlier guidance for 1-3% growth.

American Airlines expects total pretax net special items to amount to about $280 million in the third quarter.

The airline continues to expect third-quarter total cost per available seat mile excluding fuel and special items to be up about 4-6% year-over-year.

As of Sept. 30, the company said it had $8 billion in total available liquidity.