Thursday, 25 July 2019

Boeing 737 MAX groundings continue to frustrate US airlines

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It is a frustrating time for key US airlines and big customers of Boeing's ill-fated 737 Max models as the financial toll from the grounding drags on and ever deeper.  Low-cost giant Southwest has said it was frustrated as it confirmed it had been forced to end operations at Newark's Liberty International Airport.

Southwest also recently announced it was halting recruitment of new pilots, suspending upgrades along with ceasing services from Newark, where it operated up to 20 daily departures, concentrated on LaGuardia.  There is a little trickle of new operations, especially in California and to Hawaii for which is has had to delay the retirement of older 737-700s.  Southwest expects its flying capacity to drop by around 2% this year because of the 737 Max problems and it's long journey to get back to being airworthy. 

According to Gary Kelly, Southwest's CEO, the 737 Max is taking up almost all the airlines attention. “It’s really all about the MAX. It’s the only thing we’re dealing with,” after telling the airlines shareholders that the firm was taking a $175 million hit to its operating income in the second quarter alone because of the grounding.

American Airlines, said it expected the 737 Max grounding would dent its 2019 pre-tax earnings by about $400 million, around $50 million more than forecast. And, there is still no date for the types return to the skies or even a sensible indication. However, Southwest has indicated it will be out until at least 5th January next year.

On Wednesday, Boeing posted its largest-ever quarterly loss simply because of the spiralling cost of trying to get the 737 Max airworthy again. The planemaker also said it may have to shut production of the troubled jet until safety regulators around the world approve it for a return to flying operations.

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