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Boeing 737 Max grounding hits American Airlines outlook

April 11, 2019 00:00:00

LONDON, Apr 10 (BBC): American Airlines has cut its sales outlook after being forced to cancel hundreds of flights involving the grounded Boeing 737 Max 8 aircraft.

The airline now expects a key measure of total revenue to be flat or grow by 1.0 per cent during the first quarter, compared to previous forecasts of a 2.0 per cent increase.

The firm is the second largest operator of the Boeing 737 Max 8 in the US.

The jet is at the centre of two fatal crashes in Indonesia and Ethiopia within five months of each other. 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.

The plane is grounded as investigations continue into the Ethiopian Airlines crash last month which killed all 157 people on board.

It follows 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 said: "The financial costs of this disruption in future periods cannot be forecasted at this time and will be dependent upon a number of factors, including the period of time the aircraft are unavailable and the circumstances of any reintroduction of the aircraft to service."

American Airlines' share price fell by 2.8 per cent to $32.94 in early trading.

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.

American Airlines operates 24 of the 737 Max 8 planes and has an additional 76 jets on order from Boeing.

Southwest Airlines is Boeing's largest customer for the 737 Max 8. It already operates 34 of the jets out of a total order for 250 planes.

Boeing has temporarily cut production of the 737 airliner, which will drop from 52 planes a month to 42 from mid-April.

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