American Airlines feels pinch of Boeing Max groundings

American Airlines executives promised Thursday that next year will be better than this one because the airline will get its grounded Boeing planes back and resolve a caustic fight with unions, both of which contributed to thousands of cancelled flights.

Chairman and CEO Doug Parker said the airline is in early talks over compensation from Boeing over the 737 Max. American said the loss of the planes, which were grounded in March after two deadly crashes, have cost it US$540 million in pretax income so far.

“We feel highly confident that the losses that American Airlines has incurred won’t be incurred by American shareholders, but will be borne by the Boeing shareholders,” Parker said on a call with analysts and reporters.

Parker repeated that American still has full faith in the plane, which Boeing is working to fix, and is eager to get more. It had 24 in March, with 76 more on order.

American’s other big challenge that Parker promised to overcome is a bitter, damaging fight over a new contract with union aircraft mechanics. The company sued the mechanics’ two unions and convinced a federal judge to agree that some workers conducted an illegal work slowdown this year, idling many planes and forcing flights to be cancelled.

After a five-month break in negotiations, contract talks resumed last month.

Parker made the promises as American Airlines Group Inc reported third-quarter profit of US$425 million during the quarter, up 14 per cent, with help from lower fuel prices.

Adjusted third-quarter profit was US$1.42 per share, topping Wall Street expectations for US$1.38, according to Zacks Investment Research.

Revenue was a record US$11.91 billion, a sliver shy of expectations.

Lower prices for jet fuel allowed American to cut its fuel bill by US$245 million, or 11 per cent, compared with a year earlier.

American narrowed its full-year profit forecast to between US$4.50 and US$5.50 per share from US$4.50 to US$6.

– AP