Southwest Cuts Boeing Max Flights Out Of Schedule Through Holidays

Alan Scaia
July 25, 2019 - 12:19 pm
Southwest Airlines Boeing 737 MAX 8

© Jeremy Dwyer-Lindgren for USA TODAY

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DALLAS (1080 KRLD) - Southwest Airlines is planning to keep the Boeing 737 Max out of service through the holidays. Chief Executive Gary Kelly made the announcement Thursday when he reported second quarter earnings.

Kelly says the 737 Max will stay off the schedule through January 5, 2020. He says he expects approval to start flying the jet sometime in the fourth quarter, but he expects the airline will need another one to two months to comply with FAA directives and provide additional pilot training.

"With this in mind, we will proactively extend the MAX-related flight schedule adjustments through January 5, 2020, to provide reliability of our operation and dependability for our Customers booking their fall and holiday travel," Kelly wrote in the earnings report.

Southwest will also end service to Newark Airport. Kelly says revenue to Newark had fallen below expectations, so Southwest will consolidate New York operations at LaGuardia.

The airline started service to Hawaii in March. Kelly says demand there has been strong, but he had to delay an expansion because of the grounding. He says plans for additional service to Hawaii should now start in August.

Kelly says the airline was expecting "available seat miles" to increase five percent this year. As a result of the grounding, available seat miles are now expected to increase three to four percent. 

Despite the cuts, revenue in the second quarter increased 6.8 percent from last year. Kelly says Southwest has had "preliminary discussions" with Boeing about compensation for damages caused by the grounding.

"We have not reached any conclusions regarding these matters, and no amounts from Boeing have been included in our second quarter results," he wrote.

Southwest will also add additional flights to Mexico. Kelly says he expects to add year-round service to four cities in Mexico from Hobby Airport in Houston in the first quarter of 2020.

"Despite challenges caused by the MAX groundings, our network is performing well, and our financial outlook for second half 2019 remains solid. Looking ahead, our long-term financial goals remain unchanged: maintain a strong balance sheet, investment-grade credit ratings, and ample liquidity; generate robust operating and free cash flows; grow earnings, margins, and capital returns; and maintain healthy Shareholder returns," he wrote.