Commodities

Southwest, American Airlines extend Boeing 737 Max cancellations


A number of grounded Southwest Airlines Boeing 737 MAX 8 aircraft are shown parked at Victorville Airport in Victorville, California, March 26, 2019.Mike Blake | ReutersSouthwest Airlines will remove all Boeing 737 Max planes from its flight schedule through March 6, delaying the plane’s return longer than any other U.S. carrier, the airline announced Friday. Separately, American Airlines also announced after the bell Friday that it will continue its 737 Max cancellation through March 4, resuming commercial service on March 5.Southwest had previously grounded the plane through Feb. 8, while American Airlines cut the 737 Max from its flight schedule through Jan. 15.The decision comes as the Southwest Airlines flight attendants union weighs suing Boeing over lost pay as a result of the prolonged 737 Max grounding. The airline’s pilots sued Boeing last month over what it said was more than $100 million in lost wages due to the grounding.Southwest Airlines’ fleet is entirely made up of Boeing 737s, and it has had to cancel thousands of flights as a result of the grounding. It is the largest customer of the planes in the U.S. and had 34 in its fleet with 200 more on order at the time of the grounding in March. Southwest’s shares are up approximately 25% year to date.Boeing came under further pressure in late October after documents surfaced detailing that engineers raised concerns about the 737 Max’s faulty MCAS flight-control system before two crashes that killed 346 people.Southwest said it is unable to provide updated first-quarter guidance for 2020 due to the cancellation extension. Southwest’s shares were little changed following the decision, while Boeing’s shares dipped by about 1% in midday trading.American also had its own share of 737 Max related cancellations and labor disputes this past summer, cancelling more flights than any other carrier in July. American’s shares are down approximately 4% year to date.American said that any customer who previously booked a flight on a 737 Max through March 4 will have their reservation updated.¬†Once the 737 Max is certified, American expects to run exhibition flights, or flights for American team members and invited guests only, prior to March 5.The company’s shares dropped less than 1% off its closing price of $30.76 per share during extended trading. Southwest’s shares, meanwhile, remained unchanged from its closing price of $58.18.Correction: This story has been updated to reflect the correct cancellation date for American Airlines.

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