Southwest CEO Calls Latest Max Delay ‘Very Disappointing’

(Bloomberg) -- Southwest Airlines Co., the largest operator of the grounded Boeing Co. 737 Max, said the discovery of a new safety issue with the jetliner is extending its absence “well beyond” what was hoped, forcing the carrier to reassess its schedule for the rest of the year.

The latest problem, “unfortunately, is going to delay the timeline for returning the Max to service,” in early October, Chief Executive Officer Gary Kelly told employees Monday. “That's very disappointing.”

Separately, American Airlines Group Inc. suspended a daily round trip between its hub at Dallas-Fort Worth and Oakland, California, because of the Max grounding.

The new glitch doesn't directly involve the flight-control software that was linked to two crashes since October that killed a total of 346 people. Fixing the problem, which Boeing has said can be done with a software patch, could take as much as three months, people familiar with the matter have said.

Southwest has canceled 150 daily flights during the busy summer travel season. On June 27, the carrier extended its Max cancellations through Oct. 1, its second extension in two weeks.

“I'm sure this will cause us to have to take the Max out of the schedule beyond Oct. 1,” Kelly said in a regularly recorded message. “We'll also see whatever other modifications we might need to make for our plans for this year. It is obviously extending well beyond what I had hoped.”

American and United Airlines Group Inc. have kept the Max out of their schedules until the first week of September. American said it's awaiting additional information before refining its schedule.

American confirmed Monday it's suspending the daily flight between Dallas-Fort Worth International Airport and Oakland from July 6 until Sept. 4 as it uses a Boeing 737-800 from that route to cover another flown by a Max aircraft. American passengers can fly from Dallas-Fort Worth to Oakland with a stop in Phoenix, or fly to other nearby California cities, said Ross Feinstein, an American spokesman.

“Our goal is to minimize the impact to the smallest number of customers,” he said. American is canceling 115 daily flights while its 24 Max planes are parked.

The suspension was reported earlier in The Points Guy, a travel industry publication.

Financial Impact

Dallas-based Southwest hasn't commented on the financial impact of parking the Max. The groundings, flight cancellations and delays linked to a labor dispute and winter storms reduced first-quarter net income by $150 million and revenue by $200 million.

The carrier earlier slowed its plans for growth this year because its 34 Max planes were out of service. The latest issue doesn't affect the 737 Next Generation aircraft that make up most of Southwest's fleet, Kelly said.

Kelly, who has maintained he and Southwest have “the utmost confidence” in the Max and Boeing, said just six weeks ago that it was “absolutely” possible that the troubled plane would return to flying this summer.

Southwest has flown Boeing 737s exclusively since 1971, when the airline began operations. Kelly said in April that there was no guarantee that the carrier would stick to one aircraft type forever although it had no immediate plans to diversify its fleet.

To contact the reporter on this story: Mary Schlangenstein in Dallas at maryc.s@bloomberg.net

To contact the editors responsible for this story: Brendan Case at bcase4@bloomberg.net, Susan Warren

©2019 Bloomberg L.P.