Southwest Airlines Cancels Boeing 737 MAX Flights Through November

Southwest Airlines pushed back its timeframe for returning the 737 MAX to service citing regulatory uncertainty

Boeing this week hired a victims-compensation expert to oversee a $50 million relief fund for families, which the company said was separate from the lawsuits.

The airplane builder also said the Max-related fallout will cut $5.6 billion from its revenue and pre-tax earnings in the April-through-June quarter. The disasters and questions about the aircraft's design have engulfed the Chicago-based plane-maker in one of the worst crises in its century-long history.

Boeing is recording the charge assuming that regulatory approval clearing the MAX fleet to return to revenue service "in the U.S. and other jurisdictions" will begin "early in the fourth quarter", the company said.

"By proactively removing the MAX from scheduled service, we can reduce last-minute flight cancellations and unexpected disruptions to our Customers' travel plans", Southwest said in a press release. "The MAX grounding presents significant challenges for our customers, company and supply chain", he wrote.

The company logo for Boeing is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York, U.S., March 11, 2019.

That figure represents Boeing's current estimate of how much it will have to pay airlines that fly the Max, which has been grounded for months after two deadly crashes, and may not fly again this year.

The airline offered apologies to customers impacted by the change.

"With the timing of the MAX's return-to-service still uncertain, we are again revising our plans to remove the MAX from our schedule through november 2".

"While it's still fluid, Boeing must have a decent handle on it or they wouldn't have thrown a date out there", said George Ferguson, an analyst with Bloomberg Intelligence.

The FAA late last month identified a fresh problem during simulator testing, further clouding the outlook for the plane's return to service.

The suit claims that "Boeing and Southwest ... had an unwritten but strictly-adhered-to agreement: in exchange for its otherwise economically irrational backstopping of Boeing, Southwest would get early access to new 737 models, input into Boeing's design process, and the lowest price on all 737 aircraft ..."

Shares of Boeing rose 1.9 per cent in after-hours trading to US$368.02. This, Boeing said, increased estimated 737 "accounting quantity" production costs by $1.7 billion for the next 3,100 aircraft, "primarily due to higher costs associated with a longer-than-expected reduction in the production rate".

Southwest, the world's largest MAX operators with 34 jets, and American are due to report quarterly earnings on July 25. Company engineers are still working on an update.

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