737 MAX grounding hits North American airlines' high season

The worldwide grounding of the Boeing 737 MAX fleet continues to have knock-on effects for the aviation industry, particularly in capacity, network planning and financial projections.

The two US major airlines American and United have already cut their 2019 capacity forecast as a result of the grounding, and American has also slashed its earnings per share (EPS) projections for this year. 

Canada’s two largest airlines – Air Canada and WestJet – are also facing lower capacity deployment in 2Q2019, and Air Canada in particular has been forced to take several mitigation measures, including using larger gauge aircraft that could affect higher yielding connections in hubs and wet-leasing aircraft to cover other operations.

WestJet is joining other North American MAX operators in its finding that the grounding of the aircraft during the first quarter affected its ability to capture close-in and higher yielding traffic. 

Even when the MAX jets eventually gain approval to re-enter service, it will take some time for airlines to restore their network and operational efficiency. Operators are declining to say whether discussions about compensation are occurring; but there is no doubt that they will eventually seek some form of reparation.