American Airlines to cancel 115 flights daily over 737 MAX

In a March 13, 2019 file photo, an American Airlines Boeing 737 MAX 8 sits at a boarding gate at LaGuardia Airport in New York. (AP)
Updated 15 April 2019
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American Airlines to cancel 115 flights daily over 737 MAX

  • The global fleet of 737 MAX planes has been barred from flying since mid-March
  • Earlier this week, competitor Southwest Airlines said it would operate its 34 aircraft of the same model starting August 5

WASHINGTON: American Airlines announced Sunday it would scrap some 115 flights per day in the coming months because its fleet of Boeing 737 MAX planes is being grounded until August 19.
America’s leading airline had previously only planned to keep the planes out of commission until June 5, with Boeing facing intense scrutiny after 157 people died in an Ethiopian Airlines 737 MAX crash on March 10 — the second deadly crash involving the aircraft in five months.
The global fleet of 737 MAX planes has been barred from flying since mid-March.
“These 115 flights represent approximately 1.5 percent of American’s total flying each day this summer,” American Airlines chairman and CEO Doug Parker said in a statement.
But he stressed his confidence in the aircraft overall.
“Based upon our ongoing work with the Federal Aviation Administration (FAA) and Boeing, we are highly confident that the MAX will be recertified prior to this time (August 19),” he said.
“By extending our cancelations through the summer, we can plan more reliably for the peak travel season and provide confidence to our customers and team members when it comes to their travel plans.
“Once the MAX is recertified, we anticipate bringing our MAX aircraft back on line as spares to supplement our operation as needed during the summer.”
American Airlines had lowered one of its first quarter indicators in light of the Boeing 737 MAX 8 planes being grounded, along with the partial US government shutdown and technical challenges.
Earlier this week, competitor Southwest Airlines said it would operate its 34 aircraft of the same model starting August 5.


Microsoft tops $1 trillion as it predicts more cloud growth

Updated 12 min 8 sec ago
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Microsoft tops $1 trillion as it predicts more cloud growth

BENGALURU/SAN FRANCISCO: Microsoft Corp. on Wednesday briefly topped $1 trillion in value for the first time after executives predicted continued growth for its cloud computing business.
The Redmond, Washington-based company beat Wall Street estimates for quarterly profit and revenue, powered by an unexpected boost in Windows revenue and brisk growth in its cloud business which has reached tens of billions of dollars in sales.
Microsoft shares rose 4.4% to $130.54 in late trading after the forecast issued on a conference call with investors, pushing the company ahead of Apple Inc’s $980 billion market capitalization. The companies and Amazon.com Inc. have taken turns in recent months to rank as the world’s most valuable US-listed company.
Microsoft’s stock has gained about 23% gain so far this year, after hitting a record high of $125.85 during regular trading hours.
Under Chief Executive Satya Nadella, the company has spent the past five years shifting from reliance on its once-dominant Windows operating system to selling cloud-based services.
Azure, Microsoft’s flagship cloud product, competes with market leader Amazon Web Services (AWS) to provide computing power to businesses.
Growth in that unit slowed to 73% in the third quarter ended March 31 from 76% in the second quarter. Mike Spencer, Microsoft’s head of investor relations, said the decline was roughly in line with the company’s estimate.
Christopher Eberle, a senior equity analyst with Nomura, said that with Azure, “one should assume a slower rate of growth as we move forward, simply due to the law of large numbers.” Still, Azure will bring in $13.5 billion in sales in fiscal 2019 with an overall growth rate of 75%, he estimated. “I can’t name another company of that scale growing at these rates.”
Microsoft tops tech rivals such as Amazon in market capitalization on some days despite having less revenue, partly because most of its sales is to businesses, which tend to be steadier customers than consumers. A growing proportion of Microsoft’s software sales are billed as recurring subscription purchases, which are more reliable than one-time purchases.
Microsoft’s earnings per share of $1.14 beat expectations of $1 according to IBES data from Refinitiv.
Windows licensing revenue from computer makers grew 9% year over year, beating expectations after a 5% decline in the previous quarter. Spencer said a shortage of Intel Corp. processor chips for PCs that many analysts expected to last into this summer had been resolved earlier than expected, allowing PC makers to ship more machines.
Microsoft’s “commercial cloud” revenue — which includes business use of Azure, Office 365 and LinkedIn — was $9.6 billion this quarter, up 41% from the previous year but down slightly from the 48% growth rate the previous quarter.
Microsoft’s so-called “intelligent cloud” unit, which contains its Azure services, posted revenue of $9.65 billion, above Wall Street estimates of $9.28 billion, according to IBES data from Refinitiv. Chief Financial Officer Amy Hood said that unit could reach $11.05 billion in revenue in the fiscal fourth quarter.
The “productivity and business process” unit that includes both Office as well as social network LinkedIn had $10.2 billion revenue versus expectations of $10.05 billion.
Microsoft’s latest results contained two weak spots.
Its gaming revenue was up only 5% versus 8% the quarter before, which Spencer attributed to less revenue from third-party game developers and the fact that many gamers are delaying purchases of Microsoft’s Xbox console because a new model is expected soon.
Sales of the company’s Surface hardware grew 21% versus 39% the quarter before, also because customers waited for updated hardware they expected to be released soon.
Total revenue rose 14% to $30.57 billion, beating analysts’ average estimate of $29.84 billion according to IBES data from Refinitiv.
Net income rose to $8.81 billion, or $1.15 per share, from $7.42 billion, or 96 cents per share, a year earlier.