On Thursday, Southwest Airlines said they would shut down the operation at Newark Liberty International Airport, as the founding of the Boeings 737 Max continued to take a toll on US carriers.
Southwest, which reported revenue in the second quarter, said that as a result of the turbulent jet's downfall, passenger numbers had dropped, costs had increased and it had lost an estimated $ 175 million in profits. Second quarter operating revenues were $ 968 million $ 4 million less than in the same period the year before.
Southwest is particularly dependent on 737 Max, and the airline had expected to deliver 44 of the aircraft this year . It was before Boeing stopped delivering the aircraft until it was considered safe to fly again.
737 Max was grounded on March 13 shortly after crashing on an Ethiopian Airlines plane and killed all 157 people on board. About five months earlier, a 737 Max plane crashed in Indonesia, killing 189 passengers.
Gary C. Kelly, Southwest's CEO, said the company "took the necessary steps to mitigate injuries" by withdrawing from Newark, where the airline began in 2011, and consolidated its operations in the New York area of La Guardia. airport November 3.
"The financial results in Newark have been below expectations, despite the efforts of our excellent team in Newark," Kelly said in a statement.
Southwest currently has 20 daily departures from Newark to 10 cities. It earned 1.5 million passengers there during the 12 months ended April, making it the airport's fifth busiest passenger airline, according to the New York and New Jersey port authorities.
Southwest customers with flights booked through Newark will have the opportunity to travel via other airports, and the approximately 125 people Southwest employing in Newark will have the opportunity to move, the airline said .
Southwest's move is the last example of the extended impact the 737 Max grounding has had on the US airline industry, where carriers have canceled thousands of flights by November. Jet's inability to fly has also forced Ryanair, the Irish budget company, to scale off its expansion plans.
The economic case of may get worse. Boeing said on Wednesday that it can stop the production of 737 Max if the grounding continues. Such a movement would damage a constellation of companies, including manufacturers and suppliers of aircraft parts, and may even spill into the broader economy given Boeing's size in the it . The aviation giant has already announced more than $ 8 billion in costs related to the two deadly crashes.
Southwest said in the income statement that it was in preliminary discussions with Boeing for compensation for damages related to the grounding. The airline also said it would remove 737 Max from the plan through January 5.
Southwest's pilots have also expressed concern about the impact of grounding. In an update describing their safety concerns in June, Jon Weaks, the president of the Southwest Airlines Pilots Association, said the federal pilots were collaborating with the Justice Department, which has issued a petition for records and information.
"This and others S.W.A.P.A. Expenditure related to Max as well as loss of flight to our members is very expensive, ”Weaks wrote. "S.W.A.P.A. will seek Boeing's compensation and reimbursement for every dollar legally available to be challenged when the Max issues are resolved. "