FX Excursions

FX Excursions offers the chance for once-in-a-lifetime experiences in destinations around the world.

Boeing 737 Max Grounding Costs Exceed $4 Billion

Sep 5, 2019

Aer Lingus Passenger Jet. Airbus A320

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As 387 Boeing 737 Max planes from 43 airlines around the world sit idle, costs are piling up. A new report shows, since the March grounding after two crashes killed 340 people, the airline industry’s losses ballooned to $4.1 billion. It will be at least another four months before the plane is certified as safe to fly.

“The grounding of the Boeing 737Max continues and the commercial damage for airline operators appears to be increasing as the loss of capacity is now at its highest during the peak summer season for many operators,” John Grant, OAG senior analyst, said in a prepared statement. “For every carrier there appears to be a significant reduction in capacity offered, much of which would have been assumed in the original planning of the carriers for this financial year.”

Grant calculated the difference between the airlines’ planned 737 Max capacity and the actual capacity, which showed nearly 41 million seats have been lost so far due to the aircraft’s grounding. That comes at a cost of $4.1 billion, including $600 million for three U.S. airlines that fly the aircraft — Southwest, American Airlines and United Airlines. Southwest lost $290 million, American lost $220 million and United lost $90 million in potential revenue.

Internationally, China Southern lost the most at $370 million, followed by Air Canada’s $300 million, $290 million for Southwest, $270 million for Turkish Airlines and $220 million for American.

In a statement, Boeing said, “We regret the impact the grounding has had on all of our airline customers and their passengers. Safety is our top priority as we work with global regulators and our customers on certification of the software update and return of the 737 MAX to service.”

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