FORT WORTH, Texas (AP) — American Airlines is reporting higher third-quarter profit, but it is cutting the upper end of its estimate for full-year earnings as it struggles with the grounding of its Boeing 737 Max jets.
The airline said Thursday that it expects the grounding of its Max jets to cut full-year pretax earnings by about $540 million. During the three months ended in September, the Max grounding cut pretax income by about $140 million.
Even with the loss of its 24 Max planes and others it had expected to receive this year, American earned $425 million during the quarter, up 14%, with help from lower fuel prices.
Chairman and CEO Doug Parker said, however, that the results should have been better were it not for the Max grounding and ongoing labor-contract negotiations. American sued its mechanics’ unions over what it viewed as an illegal work slowdown that caused some summer flights to be delayed or canceled.
Parker promised that American is “taking decisive action to correct this performance,” and spoke in upbeat terms about 2020 and beyond.
For 2019, however, the company narrowed its full-year profit forecast to between $4.50 and $5.50 per share from $4.50 to $6.
Adjusted third-quarter profit was $1.42 per share, topping Wall Street expectations for $1.38, according to Zacks Investment Research.
Revenue was a record $11.91 billion, a sliver shy of expectations.
Lower prices for jet fuel allowed American to cut its fuel bill by $245 million, or 11%, compared with a year earlier.
In trading before the opening bell, shares of Fort Worth-based American Airlines Group Inc. were down 29 cents to $28.