Southwest Airlines Co. will become the second U.S. carrier planning to go more than a year without flying the grounded Boeing Co. 737 Max, as the plane’s biggest operator pulls about 300 daily flights from its schedule.
The airline said Tuesday it is removing the Max from its schedule through April 13, about five weeks longer than previously planned, citing continued uncertainty over when regulators will allow the plane to return to the skies. The dropped flights represent about 7.5% of Southwest’s daily service.
Southwest’s move came a day after Boeing said it would temporarily halt Max production. U.S. regulators last week made clear that the aircraft wouldn’t be approved to resume service this year. The narrow-body jetliner was grounded worldwide on March 13 after crashes at Lion Air and Ethiopian Airlines killed 346 people.
The absence of the Max, on which Southwest has based future growth, has pared the airline’s 2019 operating profit by $830 million. American Airlines Group Inc. has pulled the jet from its schedule through April 6. United Airlines Holdings Inc. so far plans to resume Max service in early March.
“We have no confidence this is the final adjustment to Southwest schedules,” Cowen Inc. analyst Helane Becker said in a report. “The biggest concern for investors remains how and when the Max will re-enter the market and what it means for domestic capacity growth.”
The Dallas-based airline has said it would take as much as two months to prepare the planes to fly once the U.S. lifts its grounding order.
Southwest rose less than 1% to $54.76 at 10:51 a.m. in New York. The shares climbed 17% this year through Monday.
The carrier had 34 Max planes in its fleet when they were grounded and had been scheduled to have 75 by year-end. Southwest said last week that it had reached a settlement with Boeing to recover costs of the grounding for this year. Terms for 2020 will be negotiated separately.
Beyond airlines, Boeing’s Max production shutdown will jolt a supplier base that stretches from fuselage and seat makers to engine manufacturers.