Boeing 737 Max Groundings Adversely Impacting Airline Industry

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Boeing 737 MAX 7

Airlines are feeling the impact of Boeing halting deliveries of its 737 Max planes in March after two deadly crashes within five months of one another, one involving an Ethiopian Airlines Max and another a Lion Air Max that went down in Indonesia. Together, the two crashes killed all 346 people who were on board. It is speculated that the planes will not be ready to carry passengers again until 2020 as flight-control software is being fixed.

American Airlines Group and United Airlines Holdings has announced it will keep the planes off its schedules through Nov. 2. Air Canada has removed the Boeing 737 Max from its schedule until at least Jan. 8. In a ripple effect, Southwest Airlines is ceasing operations at Newark Liberty International Airport because of the continued grounding starting November 3. Southwest said its financial results at the airport have fallen below expectations, and it had to “mitigate damages and optimize our aircraft.” Southwest has 34 of the 737 Max planes in its fleet, the most of any U.S. airline. Since the grounding, it is reported that Southwest has recorded a $175 million operating loss.

The 125 Southwest employees at Newark will be offered positions at other airports and passengers booked on flights past the end date will be offered “options and flexibility” for new flights. The airline operates 20 flights per day from Newark to 10 cities, including Phoenix, Austin, and Chicago. Southwest will continue to fly from the New York area’s other airports including LaGuardia and Islip on Long Island.

Irish carrier Ryanair has also announced that is profits are down and says the groundings are partly to blame. Its profits are down 21 percent in its second quarter.

Boeing, too, posted its largest-ever quarterly loss, $2.9 billion, due to the grounding. Boeing says it has come up with a software fix, which the FAA must approve before it can get the grounded planes flying again. For more on this story, click here.



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