Travel demand cushions 737 MAX toll
American Airlines and Southwest said strong demand for travel HELPED cushion QUARTERLY results even though the grounding of the Boeing 737 MAX WEIGHS on costs and profits.
The Boeing jets have been out of action since a safety ban took effect in March following two deadly crashes. That forced American and Southwest to cancel thousands of flights.
Although the grounding bit into earnings, healthy demand helped American grow its quarterly profit 27%, surpassing analysts estimates, and revenue also rose.
BUT IT WAS ANOTHER STORY FOR Southwest since it is the world's largest operator of 737 MAX planes. Profit fell 21%, and the carrier warned the grounding will continue to weigh on profits in the first quarter. But STILL, it managed to slightly boost its revenue.
Southwest said it'll likely extend MAX flight cancellations beyond June. American anticipates resuming service in late summer or early fall. Boeing says it does not expect to get regulatory approval for the MAX to fly again until mid-year.
