American Airlines reaches deal with Boeing over 737 MAX

John Patota

American Airlines (A1G) (AAL) announced that it has reached a “confidential agreement” with Boeing regarding the 737 MAX groundings.

Fort Worth, Texas-based airline, citing reduced revenue income in 2019 due to the aforementioned crisis, will add $30 million to its profit-sharing scheme among its employees. However, the total sum of the agreement between the airline and the manufacturer was not disclosed.

Instead, the carrier’s press release indicates that the compensation will not be realized in its Q4 2019 financial results and will be accounted as “a reduction in cost basis of grounded MAX aircraft and certain future MAX aircraft deliveries.”

Out of the 944 aircraft that the airline has in its fleet, American Airlines (A1G) (AAL) has 24 Boeing 737 MAX jets grounded, with 12 more produced but undelivered, according to data. The manufacturer indicates that the carrier has a total of 100 Boeing 737 MAX on order.

In 2011, American Airlines (A1G) (AAL) became the culprit of the 737 MAX, when the carrier publicly announced a then record-breaking order for 460 narrow-body aircraft, including 100 of “Boeing’s expected new evolution of the 737NG, with a new engine that would offer even more significant fuel-efficiency gains over today’s models.” Back then, as the airline’s press release indicates, the 737 MAX was not yet confirmed by the manufacturer.

“American is pleased to be the first airline to commit to Boeing’s new 737 family offering, which is expected to provide a new level of economic efficiency and operational performance, pending final confirmation of the program by Boeing.”

The latest schedule update by the company set the date of April 7, 2020, as the expected return of the 737 MAX to commercial service in American Airlines’ (A1G) (AAL) operations. United Airlines, another United States-based airline with the troubled narrow-body in its fleet, is less hopeful – the return date was announced to be June 4, 2020.


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