American Airlines has reported a strong profit rise of more than 20 per cent to $662 million (2018: $556 million) in the second quarter of 2019 but said the grounding of Boeing 737 Max aircraft is hitting results.
The US carrier had 24 Max aircraft grounded in March and has an additional 76 on order, seven of which were scheduled to be delivered in the second quarter, estimates the cancellations negatively impacted pre-tax income by approximately $175 million.
American has removed all Max flying from its flight schedule through to 2 November with the flight cancellations extending an additional two months, the company now expects the Max cancellations will negatively impact its full year 2019 pre-tax earnings by approximately $400 million.
In the second quarter, record revenue of $12 billion was recorded, driven by 2.7 per cent passenger demand growth. Cargo revenue decreased 15.4 per cent to $221 million due primarily to a 16.2 per cent decrease in cargo ton miles.
“Our team members did a tremendous job to deliver solid results despite a challenging start to our summer,” said chairman and chief executive officer Doug Parker. “Their extraordinary efforts led to an increase in earnings and record revenue performance, and we thank our team for their expertise and care for our customers.”
“These strong results in the face of near-term adversity, coupled with our ongoing initiatives, give us great confidence in the future of American Airlines.”