American Airlines adjusts 1Q2019 guidance, cancels 1200 services due to 737 MAX groundings

    American Airlines cancelled (09-Apr-2019) approximately 1200 services in 1Q2019, due to the grounding of its Boeing 737 MAX fleet. The airline also removed 14 737-800 aircraft from its fleet on 07-Mar-2019 due to issues with new cabin interiors, resulting in an additional 940 cancelled services. Three 737-800 aircraft were returned to service in Mar-2019, with the remaining aircraft to return in Apr-2019. Grounding of 737 MAX aircraft, the USGovernment shutdown and removal of 14 737-800 aircraft from the airline’s fleet resulted in 1Q2019 guidance for total revenue per available seat mile (TRASM) falling to approximately flat to up 1% year-on-year, compared to its previous guidance of flat to up 2%. The airline reported the following adjustments to its 1Q2019 guidance:

    • Capacity: ASMs slightly higher than previous guidance due to better completion factor;
    • CASM ex fuel and special items: Up approximately 3%, a drop from previous guidance due to lower than expected salaries and benefits expense;
    • Capex: Approximately USD531 million, an increase compared to previous guidance due to timing of certain projects;
    • Pre tax net special items: Approximately USD70 million;
    • Fuel costs: Between USD2.02 and USD2.07 per gallon of mainline jet fuel;
    • Pre-tax margin ex special items: Approximately 2% to 4%;
    • Liquidity: Approximately USD7.2 billion;
    • Shares outstanding: Approximately 454 million, with 16.7 million shares purchased for USD600 million in 1Q2019. [more – original PR]