Southwest Airlines says Boeing’s 737 Max groundings are hurting sales

Southwest Airlines warned that the 737 Max groundings are hurting its ticket sales. But Southwest’s problems extend beyond Boeing.

The airline warned investors Wednesday that it has canceled 9,400 flights because of weather and its dispute with mechanics in addition to Boeing’s grounding of the 737 Max airplane.
Southwest said the number of seats it has to sell this quarter will be much lower than it previously expected because it isn’t flying as many planes. It said 2,800 of the cancellations were because of the Boeing (BA) 737 Max grounding.

The airline also disclosed that has cut back on the number of flights through April 20 in anticipation of a continued grounding of its 737 Max planes.
Southwest also said it will lose a total of 2,800 flights during the quarter because of “unscheduled maintenance disruptions arising from contract negotiations” with its mechanics union. The union has disputed the airline’s claim that members are calling off sick or ordering extra work to put pressure on management during labor talks.

The company said it also lost 3,400 flights because of worse-than-expected weather during the quarter. It had previously said softness in passenger bookings because of the government shutdown would cost it $60 million during the quarter.

It said the latest problems with 737 Max grounding, the maintenance issues and weather would cost it an additional $150 million during the quarter that ends on Sunday.

Southwest’s (LUV) stock was more than 1% lower in premarket trading.
Southwest has more of the 737 Max planes than any other US airline. American and United Airlines (UAL) also have the planes in their fleets. On Sunday American Airlines (AAL), the world’s largest airline, announced it was canceling flights through April 24.

The planes were grounded on March 13, following two fatal crashes in a little more than five months. Although Boeing and the Federal Aviation Administration said they are working on a software fix for the automatic safety feature that is the focus of those crash investigations, the global grounding of the jets is for an indefinite period of time.
Southwest flies nothing but 737 jets, 34 of which are 737 Max jets. It has not indicated any plan to cancel or change its 737 Max orders with Boeing.

resource: https://www.cnn.com/2019/03/27/investing/southwest-airlines-growth/index.html

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