The constant grounding of the Boeing 737 Max is costing the airline company hundreds of millions of dollars.
Southwest Airlines (LUV), American Airlines (AAL), and European budget carrier Norwegian all announced this week, the grounding is costing approximately USD 600 million.
It's not just the airlines that are feeling the pinch: Boeing (BA) also mentioned this week that its income has reduced by 21% in the first quarter of the year due to the crisis. The complete cost is yet to be calculated, but a major part of expense is for fixing the problems of the plane.
Various Airlines started grounding the 737 Max in the month of March. The grounding is about to enter its second month and till now there is no solution for Boeing. American, which operates 24 of the 737 Max jets in its fleet, mentioned on Friday that the grounding has cost it almost USD 350 million this year. On an average 115 flights a day have been cancelled. Southwest, has most of it’s 737 Max planes than other US airline companies, mentioned in its earnings report that total shut down USD 200 million in the first quarter. The cost-effective carrier has stopped some aircrafts that they planned to use the 737 Max until August 5. Southwest uses Boeing 737 aircraft, but CEO Gary Kelly mentioned that the lineup of fleets can change.
European discount air flight carrier, Norwegian mentioned on Thursday this will cost it Norwegian Krone (NOK) 500 million, or USD 58 million US dollars, in the year of 2019.
Norwegian has 18 of the 737 Max planes in its fleet, typically for trans-Atlantic flights among Europe and the East Coast of the United States. The airline has orderly more than 100 of the 737 Max 8 planes.
At present, it is difficult to understand how much Norwegian would receive from Boeing. This information is available in secure sales contract.
Boeing CEO Dennis Muilenburg mentioned the company is functioning to improve these relationships with airlines as it finds a solution for the 737 Max.