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Southwest Airlines Boeing 737 MAX aircraft are parked on the tarmac after being grounded, at the Southern California Logistics Airport in Victorville, California on March 28, 2019.
Mark Ralston | AFP | Getty Images
Shares of Southwest Airlines tumbled Thursday after the low-cost carrier said it doesn’t plan to fly the grounded Boeing 737 Max until next year, warned about higher-than-expected costs and announced it’s pulling out of Newark Liberty International Airport.
The airline removed the Max from its schedules until Jan. 5, the latest of any U.S. airline and a sign that carriers are struggling with repeated delays to the planes’ return to service. The Boeing 737 Max has been grounded since mid-March after two fatal crashes. Southwest has more Maxes that any other airline — 34 of its 750 planes as of March.
Southwest shares were down 5% in premarket trading after second-quarter revenues of $5.9 billion came in slightly below estimates and the airline said the Max grounding would force it to reduce capacity this year.
The Dallas-based airline said it would decrease its capacity by as much as 2%, down from a growth forecast of around 5%, because of the “extensive delays” in the Max planes’ return to service.
“As such, we are taking necessary steps to mitigate damages and optimize our aircraft and resources,” Southwest said in an earnings release.
Starting Nov. 3, Southwest will no longer operate out of Newark, where United dominates, and consolidate its New York operations out of LaGuardia Airport in Queens.
Southwest said its Newark operations haven’t been profitable enough and that it is observing strong demand out of LaGuardia.
Southwest launched service out of Newark in 2011 and as of the end of June offered 20 daily departures to 10 cities, including Denver, San Diego and Chicago, from the New Jersey airport.
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