Airlines

American Airlines cuts Boeing 737 Max from schedules until June as more delays arise

Key Points
  • American had 24 of the Boeing 737 Max planes at the time of the grounding last year and 76 on order.
  • Boeing recently about-faced on whether pilots should undergo simulator training before flying the Max.
  • It isn't clear when regulators will allow the planes to fly again.
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American Airlines on Tuesday said it is pulling the Boeing 737 Max from its schedules until early June as the date of the troubled plane's return to service becomes more uncertain and the manufacturer calls for time-consuming simulator training for pilots before they can fly the plane again.

American has taken the 737 Max off its schedules through June 3, more than a full year later than it expected. The planes have been grounded since mid-March after two fatal crashes over five months killed 346 people and sent Boeing into the biggest crisis in its more than 100-year history.

United Airlines also doesn't expect the Max to return until early June — a sign carriers, which have already lost more than $1 billion in revenue from the grounding, are expecting the problem to extend to the peak second- and third-quarter travel seasons.

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American Airlines delays 737 Max return until June 4

It has becoming increasingly less clear when the planes will be able to fly again. Boeing is planning to temporarily shut down production of the planes this month as it works to win over regulators on fixes prompted by the two crashes. Last week, Boeing about-faced on simulator training, saying pilots should undergo that time-consuming preparation before the planes return to commercial service.

A lack of simulator training was a key selling point to airlines and shocking emails recently revealed Boeing employees boasted about bullying regulators and airlines into accepting the jets without requiring pilots to undergo the additional training. That change promises to add to Boeing's costs and possible revenue losses for airlines.

American estimates the grounding cost it $540 million in pretax income last year. Last week, the Fort Worth, Texas-based airline said it reached an initial compensation agreement with Boeing. It didn't disclose the terms but said it would share $30 million with its employees. Pilots said they would seek additional compensation for lost income after the carrier had to slash its growth plans for the year. American had 24 of the planes in its fleet at the time of the grounding and expected to have 40 more by the end of 2019, and 10 additional in 2020.

The airline said that it will operate flights for American Airlines employees and "invited guests" before the planes return to commercial service. American reports earnings later this month.

Boeing took a $4.9 billion charge last July to compensate its 737 Max customers. As the grounding drags on, that amount may rise and the company is set to update investors on that cost later this month.