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American Airlines Extends Boeing 737 MAX Cancellations Into January



Officials from American Airlines announced Wednesday they are extending the cancellation of Boeing 737 MAX flights through at least January 15.

According to airlines-cancels-boeing-737-max-flights-until-jan-16-idUSKBN1WO1FX” target=”_blank” rel=”nofollow noopener noreferrer”>, American revealed it believes software updates to the 737 MAX fleet will soon be approved by the Federal Aviation Administration (FAA), which will lead to the “recertification of the aircraft later this year and resumption of commercial service in January 2020.”

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The airline already boasts 24 MAX planes as part of its fleet and has dozens more on order. American officials are working under the assumption the carrier will gradually resume MAX flights starting January 16.

The plan is for American to resume about 20 MAX flights a day starting in mid-January until all of the planes are flying once again in February. The airline previously announced it would cancel about 140 flights a day through December 3.

The FAA responded Wednesday by saying the agency is “following a thorough process, not a prescribed timeline, for returning the Boeing 737 Max to passenger service. The FAA will lift the aircraft’s prohibition order when it is airlines/faa-says-individual-countries-will-decide-when-to-return-737-max-to-the-air.html” target=”_self” rel=”nofollow noopener noreferrer”>deemed safe to do so.”

Earlier this month, American Airlines‘ pilots asked for compensation from lost pay caused by the 737 MAX grounding.

Southwest Airlines previously announced it had canceled MAX flights through January 5 and United Airlines revealed cancellations through December 19. In addition, Southwest pilots have filed a lawsuit against Boeing accusing the company of misleading the airline.

The Boeing 737 MAX has been grounded since mid-March following two crashes in Indonesia and Ethiopia that killed 346 people.

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Expect Airlines to Supply Fewer Options and Higher Fares After COVID-19



While many in the air travel industry are, of course, hoping for a swift and complete rebound in passenger traffic once the COVID-19 crisis finally comes under control, others aren’t as optimistic.

In fact, aviation analysts are saying that the diminished demand for air travel brought on by the coronavirus pandemic will likely persist for quite some time, even once the threat of contagion has passed.

CNN Business’ coverage looked back at the commercial aviation industry’s path to recovery after the 9/11 attacks in 2001, pointing out that passenger traffic didn’t fully bounce back until 2004. And, in the wake of the 2008 Global Financial Crisis, it wasn’t until 2013 that passenger traffic again reached the levels seen in 2007, just prior to the recession. The slumps seen in air traffic during those two crises were just a fraction of what the world has witnessed over the past four weeks.

It’s likely to take a long time for passenger air traffic to rebound from this unprecedented downturn, even once people are able to start flying again. As airlines resume operations, they’ll be selective about the routes they maintain and reduce frequency in order to fill more seats per plane, which will lead to higher fares than were seen before the crisis.

Chief credit analyst for airlines for S&P Global, Philip Baggaley, explained that, as airlines return fewer planes to service and fill those in operation to maximum capacity, many of the low-costs seats that fliers once enjoyed booking will vanish. “Fewer seats flying means fewer cheap seats at the margin,” he said.

“There’s going to be fewer airplanes. That means less flying,” industry consultant, Mike Boyd, told CNN Business. “So, there’s going to be less choice, and you’ll be paying more. There’s no way around that.”

Historically, major economic blows to the industry have resulted in bankruptcies and mergers for the airlines. Prior to the 9/11 attacks, there had been nine major U.S. carriers, which afterward merged into today’s four major carriers, which last year accounted for 80 percent of passengers flown aboard U.S. airlines: American Airlines, United Airlines, Delta Air Lines and Southwest Airlines.

It’s possible, then, that a new wave of airline failures and mergers is on the horizon, especially given that the $50-billion federal bailout promised to the industry won’t even cover the near-$65 billion in revenue that U.S. airlines would have otherwise collected, even if they only matched last year’s numbers.

“In the near term, we’re going to see a shakeout,” said Joe Schwieterman, a transportation expert and professor at DePaul University in Chicago. “The weaker players may not survive this. Most industry leaders are expecting a long, painful recovery.”

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