American Airlines feels pinch of Boeing Max groundings
FORT WORTH, Texas (AP) — American Airlines executives promised Thursday that next year will be better than this one because the airline will get its grounded Boeing planes back and resolve a caustic fight with unions, both of which contributed to thousands of canceled flights.
Chairman and CEO Doug Parker said the airline is in early talks over compensation from Boeing over the 737 Max. American said the loss of the planes, which were grounded in March after two deadly crashes, have cost it $540 million in pretax income so far.
“We feel highly confident that the losses that American Airlines has incurred won’t be incurred by American shareholders, but will be borne by the Boeing shareholders,” Parker said on a call with analysts and reporters.
Parker repeated that American still has full faith in the plane, which Boeing is working to fix, and is eager to get more. It had 24 in March, with 76 more on order.
American’s other big challenge that Parker promised to overcome is a bitter, damaging fight over a new contract with union aircraft mechanics. The company sued the mechanics’ two unions and convinced a federal judge to agree that some workers conducted an illegal work slowdown this year, idling many planes and forcing flights to be canceled.
After a five-month break in negotiations, contract talks resumed last month.
Parker made the promises as American Airlines Group Inc. reported third-quarter profit of $425 million during the quarter, up 14%, with help from lower fuel prices.
American narrowed its full-year profit forecast to between $4.50 and $5.50 per share from $4.50 to $6.
Adjusted third-quarter profit was $1.42 per share, topping Wall Street expectations for $1.38, according to Zacks Investment Research.
Revenue was a record $11.91 billion, a sliver shy of expectations.
Lower prices for jet fuel allowed American to cut its fuel bill by $245 million, or 11%, compared with a year earlier.
Shares of Fort Worth-based American rose 39 cents to $28.68 in morning trading. They began the day down 12% this year, compared with a 20% gain in the S&P 500 index.