Both American’s and Southwest’s profits were boosted, in a somewhat perverse way, by the grounding of the Boeing 737 MAX. Southwest also dropped the 737 MAX from its schedule until January, becoming the first U.S. airline to do so, and said it would halt service from Newark Airport.
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Meanwhile, Southwest dropped the 737 MAX from its schedule until January, becoming the first U.S. airline to do so, and said it would halt service from Newark Airport, consolidating its New York City-area service at LaGuardia.Fort Worth-based American earned $1.49 per share in the April-June quarter. After adjusting for one-time costs, each share of the company’s stock earned $1.82. On that basis Wall Street had been expecting a profit of $1.77 a share, according to Zacks Investment Research.
That seemingly positive result, however, not only means slightly higher average prices for travelers but also less total revenue taken in by the airlines that almost would have used those MAX planes to fly more total passengers, albeit for a fraction of a penny less per mile flown, if those planes had been available for service. Long term that translates into restrained revenue growth and, potentially, lost market share to rivals.
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