General Industry

American Airlines Expects $400m Pre-Tax Hit In 2019

By Dave Simpson
American Airlines Expects $400m Pre-Tax Hit In 2019

American Airlines Group Inc has said that it expects the Boeing 737 MAX grounding to hit its 2019 pre-tax earnings by about $400 million, even as a strong passenger demand lifted quarterly revenues.

Rising bookings have fuelled revenue growth for the main US carriers, partially because they have been able to charge passengers more for seats that are in scarcer supply following the worldwide MAX grounding in March after two fatal crashes.

But the lower than planned capacity is also weighing on costs.

American has removed its 24 MAX jets from its schedule through early November, leading to about 115 daily cancellations.

To compensate for its reduced fleet and the absence of fresh MAX deliveries, the airline will extend the lifespan of other 737 models, as well as the lifespans of some 757s and A320s, to help it meet demand.


The US airline lifted the lower end of its 2019 adjusted profit forecast to between $4.50 per share and $6 per share, up from a previous range of $4.00 per share to $6.00 per share.

Net Income, Earning Per Share And Total Operating Revenue

American's net income rose 19% to $662 million, or $1.49 per share, in the quarter that ended on June 30, 2019, from a year earlier.

On an adjusted basis, the airline earned $1.82 per share. Analysts had on average forecast $1.80 per share, according to Refinitiv data.

Total operating revenue rose 3% to $11.96 billion.

News by Reuters, edited by Hospitality Ireland. Click subscribe to sign up for the Hospitality Ireland print edition.