Cost Of Boeing 737 Max Grounding Exceeds $4 Billion

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Southwest Boeing 737 at Phoenix Sky Harbor International Airport

There are 387 Boeing 737 Max aircraft at 43 different worldwide airlines that currently sit idle, grounded since March after a pair of crashes involving the plane killed more than 340 people.

Now, a new report has assessed the financial impact of the grounding and it’s staggering.

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Great Britain-based flight data information firm OAG has issued a report that puts the global airline industry’s losses at $4.1 billion for the five months since the grounding – with at least four more months expected before the 737 Max is expected to be certified to fly again.

“The grounding of the B737Max 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’s methodology was to calculate the difference between individual airlines’ planned 737 Max capacity and the actual capacity. It found that nearly 41 million seats have been lost so far due to the aircraft’s grounding. That has translated into the $4.1 billion, including $600 million for three U.S. airlines that fly the aircraft – Southwest, American and United.

Southwest has lost $290 million, American has lost $220 million and United has lost $90 million in potential revenue.

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

In a prepared 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.”