American Airlines cuts profit forecast as 737 MAX woes bite

American Airlines slashed its profit forecast Friday largely due to the crisis around the Boeing 737 MAX. It estimated an overall hit of 350 million U.S. dollars to its 2019 earnings as a result of the jet's grounding.

The grounding ordered by global regulators in mid-March following two deadly crashes has forced the cancellation of nearly 15,000 flights and the re-accommodation of almost 700,000 customers.

On Thursday, the U.S. Federal Aviation Administration (FAA) announced it was convening a meeting of global regulators on May 23 to describe its process for ensuring necessary safety fixes are made to get the 737 MAX back in the air.

That step, though keenly desired by carriers, will present its own series of challenges, including reassuring skittish consumers that the planes are safe.

But for now, U.S. airlines are adapting to the absence of the popular aircraft, as well as to the delays in the delivery of new jets they have ordered.

American Airlines, which has 24 of the MAX planes in its portfolio, said net income for the first quarter was 185 million U.S. dollars, up 16.4 percent from the same period of the prior year, while revenues rose 1.8 percent to 10.6 billion U.S. dollars.

The U.S. carrier, which has canceled flights on the Boeing plane through August 19, said it now expects profits this year of 4.00 to 6.00 U.S. dollars a share, down from the prior range of 5.50 to 7.50 U.S. dollars.

Executives described myriad impacts, such as rebooking customers at the last minute for flights originally booked long in advance at much lower fares.

American's outlook also took a hit from higher fuel costs.

Chief Executive Officer Doug Parker said the company pushed back its target for resuming 737 MAX flights so that it could more effectively plan for the peak summer holiday season.

Obviously, we're not happy about this issue, but no one is, said Parker, adding that the company, like peers, had not discussed any compensation from Boeing at this point.

All of our efforts at this point are working to get the airplane recertified and flying again, he said. Boeing is a good and long-time partner, and we'll work through that privately.

(CGTN)