The shares of American Airlines have seen quite a few ups and downs recently and it has been primarily related to its Max jets. Previously, the company took a financial bump when it had to ground the Max jets because of the questions being raised about its safety and the ever-rising prices of fuels. However, the company recently announced that the Boeing 737 Max jets will be back by the month of August which resulted in a rebound of the share prices.
On the news of the unfortunate grounding, shares dropped by a huge 4% but it regained a percent by midday itself. It remained in the decreased state for close to 12 months. The reason why close to 24 Max 737 jets were grounded by American Airlines was the fact that their anti-stall software was found to be defective which resulted in two crafts crashing in Indonesia and Ethiopia. The number of canceled flights stood at 155 which is 1.5% of the total number of flights flying for the company in the summer.
In comparison to the estimates made by Refinitiv, American Airlines had earnings of 52 cents per share in comparison to the expected 51 cents. The revenue generation has been $10.58 billion when it was expected to make $10.59 billion. Even though the grounding is going to cost the airlines somewhere close to $350 million along with increased spending on fuel by $650 million, they are expected to make a gain of $4 to $6 per share at the end of the year.
The CEO of American Airlines, Doug Parker said that though the times have been really tough, they have noticed a surge in demands for the flights and expects that the news of the resurgence of Max 737 will restore the faith of the people and investors back on them. The sale of the company has the potential to rise by almost 3% by the time the next quarter reports come.