American Airlines Shrank for First Time in 7 Years on Boeing 737 MAX Cancellations

Jul 10, 2019

This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.

American Airlines shrank for the first time since before its merger with US Airways in the second quarter, when the Boeing 737 MAX grounding took a big bite out of its schedules.

Capacity at the Fort Worth, Texas-based carrier was down 0.8% year-over-year during the quarter, a second quarter investor update shows. The company had planned to grow by a little over half a percent in the period.

The last time American shrank was in the first quarter of 2013, when capacity fell 1.3% year-over-year, according to Diio by Cirium schedule data. The airline merged with US Airways in December 2013.

American was hard hit by the 737 MAX grounding in the second quarter. The airline cancelled roughly 7,800 flights as a result that, coupled with an on-going labor dispute with its mechanics and severe weather at several of its hubs, resulted in more cancellations than normal, the update shows.

Related: American Airlines: Reviews, Deals, News & Guides

The airline had planned to operate 31 737 MAX 8s by the end of June, the update states. It had 24 737-8s when the type was suspended in March.

American’s cancellations have captured media attention. The Wall Street Journal has called June the beginning of a “nightmare summer” at the carrier, citing data showing that 4% of its flights were cancelled in June.

Even Florida Senator and 2016 Republican presidential candidate Marco Rubio was not immune from American’s operational struggles.

American has removed the 737 MAX from its schedules through Sept. 3. However, many expect the cancellations to slide into at least October as the Federal Aviation Administration, and other global regulators, have yet to determine a timeline for returning the aircraft to the skies.

The airline has temporarily suspended flights between Dallas/Fort Worth (DFW) and Oakland (OAK), California, due to the grounding.

The 737 MAX-related cancellations have also hit American where it hurts – in its pocket book. The grounding reduced the airline’s pre-tax income by about $185 million during the three months ending in June. That number is equal to about a quarter of the company’s entire pre-tax profit over the same period a year ago.

Related: American Airlines: Reviews, Deals, News & Guides

Wall Street analysts, however, are bullish on the carrier’s second quarter results. In a report today, Raymond James analyst Savanthi Syth calls the update “somewhat positive,” citing improvements in both American’s pre-tax margin and total unit revenue guidance for the period.

American anticipates a pre-tax margin of 8.5-9.5% in the second quarter, the update shows. It also forecasts a 3-4% year-over-year improvement in total revenue per available seat mile, a measure of demand, due to higher than expected load factors.

Featured image courtesy of American Airlines.

Delta SkyMiles® Platinum American Express Card

Earn 90,000 bonus miles and 10,000 Medallion® Qualification Miles (MQMs) after you spend $3,000 in purchases on your new card in the first three months of card membership. Offer ends 11/10/2021.

With Status Boost™, earn 10,000 Medallion Qualification Miles (MQMs) after you spend $25,000 in purchases on your Card in a calendar year, up to two times per year getting you closer to Medallion Status. Earn 3X Miles on Delta purchases and purchases made directly with hotels, 2X Miles at restaurants and at U.S. supermarkets and earn 1X Mile on all other eligible purchases. Terms Apply.

Apply Now
More Things to Know
  • Limited Time Offer: Earn 90,000 Bonus Miles and 10,000 Medallion® Qualification Miles (MQMs) after you spend $3,000 in purchases on your new Card in your first 3 months. Offer expires 11/10/2021.
  • Earn up to 20,000 Medallion® Qualification Miles (MQMs) with Status Boost® per year. After you spend $25,000 in purchases on your Card in a calendar year, you can earn 10,000 MQMs two times per year, getting you closer to Medallion® Status. MQMs are used to determine Medallion® Status and are different than miles you earn toward flights.
  • Earn 3X Miles on Delta purchases and purchases made directly with hotels.
  • Earn 2X Miles at restaurants worldwide, including takeout and delivery and at U.S. supermarkets.
  • Earn 1X Miles on all other eligible purchases.
  • Receive a Domestic Main Cabin round-trip companion certificate each year upon renewal of your Card. *Payment of the government imposed taxes and fees of no more than $75 for roundtrip domestic flights (for itineraries with up to four flight segments) is required. Baggage charges and other restrictions apply. See terms and conditions for details.
  • Enjoy your first checked bag free on Delta flights.
  • Fee Credit for Global Entry or TSA Pre✓®.
  • Enjoy an exclusive rate of $39 per person per visit to enter the Delta Sky Club® for you and up to two guests when traveling on a Delta flight.
  • No Foreign Transaction Fees.
  • $250 Annual Fee.
  • Terms Apply.
  • See Rates & Fees
Regular APR
15.74%-24.74% Variable
Annual Fee
Balance Transfer Fee
Recommended Credit
Terms and restrictions apply. See rates & fees.

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.