Southwest Airlines first-quarter profit hit by 737 MAX
grounding
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 [April 25, 2019]
(Reuters) - Southwest Airlines Co reported
a 16 percent drop in quarterly profit on Thursday, saying a U.S.
government shutdown, maintenance disruptions and the grounding of its
Boeing 737 MAX jets knocked $150 million off its bottom line.
Dallas, Texas-based Southwest, the world's largest MAX operator with 34
jets in its fleet and dozens more on order, said it lost more than $200
million in revenue during the quarter, above its previous estimate of
$150 million.
The No.4 U.S. airline has canceled thousands of flights since the 737
MAX was grounded worldwide in March following two fatal crashes, in
addition to cancellations due to bad weather and unscheduled maintenance
disruptions as it worked out a new labor contract with its mechanics
union.
The low-cost carrier has removed the fuel-efficient, longer-range MAX
from its flying schedule through Aug. 5 as it waits for Boeing Co to
submit a software fix and new training guidelines to global regulators
for review.
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A number of grounded Southwest Airlines Boeing 737 MAX 8 aircraft
are shown parked at Victorville Airport in Victorville, California,
U.S., March 26, 2019. REUTERS/Mike Blake/File Photo
"Flight cancellations are expected to drive unit cost pressure for the duration
of the MAX groundings," Southwest Chief Executive Officer Gary Kelly said.
On an adjusted basis, the company earned 70 cents per share in the first
quarter, beating estimates of 61 cents per share, according to IBES data from
Refinitiv.
Total operating revenue at the airline, which launched a service to Hawaii from
California last month, rose 4 percent to $5.15 billion.
(Reporting by Tracy Rucinski in Chicago and Rachit Vats in Bangalore; Editing by
Bill Rigby and Shounak Dasgupta)
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