Airlines Are Continuing To Suffer From Boeing 737 MAX Grounding

Since the grounding of the Boeing 737 MAX series earlier this year, airlines that have relied heavily on the type have struggled to replace capacity, fulfill routes and even maintain a profit.

As there is no end in sight for the Boeing 737 MAX problems, many airlines are facing troubling financial results well into next year.

What are the details?

According to various sources, many airlines have had to increase their losses estimate or issue profit warnings due to the Boeing 737 MAX groundings.

These airlines are affected either by their fleet being grounded (and thus costing them money in maintenance and staff) or loss of potential profit (either by their fleet not flying or their order of Boeing 737 MAX aircraft not being delivered at the predicted time).

Here are a few of the major airlines that have been affected recently.

American Airlines eyes $183 million USD loss

American Airlines expects to post a negative impact of up to $183 million USD due to the Boeing 737 MAX grounding, according to Flight Global.

The airline had to cancel 7,800 flights in Q2 of 2019, grounding thousands if not hundreds of thousands of passengers across the United States (or losing that potential revenue to rivals like Delta, who is doing very well out of the 737 MAX situation).

American Airlines Boeing 737 MAX 8
All American Airlines Boeing 737 MAX 8 aircraft remain grounded. Photo: Boeing.

American Airlines operates 24 Boeing 737 MAX aircraft and was one of the last in the world to ground the aircraft, due to the FAA being the last to issue a grounding order. The carrier is also facing an aircraft maintenance union slowdown, as the workers stall, working at a reduced rate while demanding better conditions.

“That slowdown has significantly impacted the company’s operation and caused a significant number of flight cancellations and delays in the second quarter,” says American in an investors update published by Flight Global. 

Norwegian estimates $81 million USD due to 737 MAX grounding

Norwegian believes that their fleet of 18 Boeing 737 MAX aircraft will take back to the skies in October, but aviation experts such as Flight Global believe this to be a little optimistic. Until then, the grounding has added an extra $81 million USD to Norwegian’s bottom line.

“The 737 MAX grounding has affected both demand, operating expenses and production negatively,”

Simple Flying has previously reviewed how the Boeing 737 MAX grounding has affected the airline.

With the current CEO on the way out, this MAX grounding could not put more of an impact on the pathway to profitability for the hungry airline. But despite all this, the airline actually posted a higher per-seat profit, mainly thanks to its long-haul operations.

“Despite operational issues outside of our control, like the grounding of our 737 MAX fleet, we are delivering the highest second-quarter operating revenue in the history of Norwegian”.

NAI 737MAX at gate
A Norwegian Boeing 737 MAX sits idle on the tarmac. Photo: Edward Russell / Wikimedia Commons

Ryanair re-evaluates growth in 2020 due to MAX grounding

Low-cost carrier Ryanair, who has seemed to go from strength to strength in 2019, expanding and buying up other European airlines, has had to re-evaluate just how much they can grow without their Boeing 737 MAX order

Ryanair has said that it could take months for them to integrate their backlog order of fifty Boeing 737 MAX 200 aircraft and thus would have to ‘trim’ their summer 2020 schedule.

“The challenge for us is that we need to see the plane back flying by the end of September, October, November at the latest, so as not to disrupt our growth for the summer of 2020,” Ryanair CEO said to Reuters.

Boeing 737 MAX Fund
Airlines have had to make alternate plans while the Boeing 737 MAX is grounded. Ryanair was expecting their first MAXs in April. Photo: Boeing

At this stage, it is still not clear when the troubled Boeing 737 MAX will take to the skies, or if Boeing will compensate these airlines.

Leave a Reply

Your email address will not be published. Required fields are marked *