American Airlines had to cut down its sales forecast after being forced to drop hundreds of flights involving the grounded Boeing 737 Max 8 aircraft.
However, I can provide you with some general information about the Boeing 737 Max grounding and its potential impact on airlines. The Boeing 737 Max aircraft was grounded worldwide in March 2019 following two fatal accidents involving the model. The grounding was implemented to ensure passenger safety while investigations and necessary modifications were conducted.
During the grounding period, airlines that had ordered or were operating the Boeing 737 Max, including American Airlines, had to adjust their operations and find alternative solutions. This involved canceling flights, rearranging schedules, and utilizing other aircraft in their fleet or leasing planes from different airlines to mitigate the impact on passengers.
The grounding of the Boeing 737 Max had financial implications for airlines, including potential disruptions to their operations and adjustments to their revenue forecasts. It’s likely that the grounding impacted American Airlines’ operations and had some effect on its sales forecast during that time. However, the extent of the impact would depend on various factors, including the duration of the grounding and the airline’s ability to minimize disruptions and manage customer expectations.
For the most accurate and up-to-date information on the Boeing 737 Max grounding and its impact on American Airlines, I recommend referring to recent news articles or official statements from the airline.
Now the airline demands a key measure of total revenue to be even or grow by 1% during the first quarter, compared to previous forecasts of a 2% increase.
Well, the firm is the second largest operator of the Boeing 737 Max 8 in the US.
The jet is at the center of two fatal crashes in Indonesia and Ethiopia with a gap of five months.
American Airlines also said that it was unable to forecast how much the disruption would cost the company.
Since the Boeing 737 Max 8 was grounded in the US on 13 March, American Airlines has cut 1,200 flights and has extended cancellations through its second quarter to 30 June, which will affect about 90 flights a day.
However, the plane is grounded as investigations continue into the Ethiopian Airlines crash last month which killed all 157 people on board.
It struck an earlier disaster in October when a 737 Max 8 flown by Indonesian airline Lion Air crashed, claiming the lives of 189 people.
American Airlines
The financial costs of this disruption in future periods cannot be forecasted at this time. It will depend upon a number of factors, including the period of time the aircraft is unavailable and the circumstances of any reintroduction of the aircraft to service.
With the incident, American Airlines’ share price plunged by 2.8% to $32.94 in early trading.
Meanwhile, Boeing is working on a fix to the anti-stall system, known as MCAS, in 737 Max 8 planes which preliminary reports suggest caused both the Lion Air and the Ethiopian Airlines flights to repeatedly nosedive.
Also, American Airlines operates 24 of the 737 Max 8 planes and has an additional 76 jets on order from Boeing.
And Southwest Airlines is Boeing’s largest customer for the 737 Max 8. Which already operates 34 of the jets out of a total order of 250 planes.
Currently, Boeing has cut production of the 737 airliners which will drop from 52 planes a month to 42 from mid-April.
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