Southwest Airlines will extend its cancellation of Boeing 737 Max flights through April 13, 2020, costing the company more than $435 million, as it awaits Federal Aviation Administration (FAA) certification of the aircraft, based on software enhancements and new training requirements, the timing of which is uncertain.
In a press release, Southwest, which is the United States’ largest Boeing 737 Max customer, stated it will be pulling 300 flights a day during its peak-day schedule out of its weekday total of 4,000 flights; the company had planned to terminate its flight cancellations by the end of March. Customers who have booked flights that were scheduled to use the 737 Max will be notified and assigned another flight.
Last week, American Airlines extended its cancellation of the aircraft as well, following the FAA’s decision to prohibit the flight of the aircraft for the rest of 2019.
“Taking planes out through April means you’ll miss the spring break hump, which is a peak period of flying,” said David Vernon, a senior analyst for Sanford C. Bernstein. “When you think about the revenue implications of missing spring break and flying a lower schedule, that’s not great.”
The 737 Max has been grounded globally since March, following two crashes that occurred within five months that resulted in the deaths of 346 people. Since then, Boeing still produced the aircraft, costing the company nearly $1.5 million per month, although it had reduced the aircraft’s production from 52 in April to 42 before an indefinite suspension, beginning in January, was announced on Wednesday.
A Southwest spokesperson clarified that the company’s decision to extend cancellation of the 737 Max had nothing to do with Boeing’s decision to stop producing the aircraft.
Southwest’s pilot union filed a lawsuit against Boeing in October for $115 million, claiming that the company had been dishonest about the safety of the aircraft. The suit also claims that the cancellation of the 737 Max resulted in the cancellation of 30,000 flights and the loss of more than $100 million for more than 9,700 pilots, a loss that could have a huge negative impact on the greater economy.