Ahead of its second quarter earnings call Thursday, Southwest Airlines announced it will pull all Boeing 737 MAX flights through January 5, 2020, making it the first air carrier to cancel flights during the busy upcoming holiday season.
The Dallas-based company said the plane's grounding has also led to their decision to end all operations at Newark Liberty Airport this fall.
Southwest Airlines has more MAX jets in its fleet than any other airline.
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Since the planes were first grounded in March over concerns about a software system linked to two deadly crashes, Southwest has been forced to cancel hundreds of flights daily.
"We have had preliminary discussions with Boeing regarding compensation for damages due to the MAX groundings," Southwest CEO Gary Kelly said in a statement. "We have not reached any conclusions regarding these matters, and no amounts from Boeing have been included in our second quarter results."[[513201211,C]]
Boeing has indicated it hopes to have the planes re-certified by the end of 2019.
Southwest says it will likely take an additional two months to put the planes back in service, noting their pilots will have complete new training.
"With this in mind, we will proactively extend the MAX-related flight scheduled adjustments through January 5, 2020, to provide reliability of our operation and dependability for our Customers booking their fall and holiday travel," said Kelly.
In looking at the financial impacts of the MAX grounding and the company's future business goals, Southwest announced it will end all operations at Newark on November 3 -- and redirect resources to New York LaGuardia.
"The financial results at Newark have been below expectations, despite the efforts of our excellent Team at Newark. I am grateful to our wonderful Newark Employees, who are a top priority, and will be given an opportunity to relocate to another station in our system, including LaGuardia Airport, where we are experiencing strong Customer demand," said Kelly. "As part of this move, we will offer options and flexibility for Customers to recover planned travel from other area airports."
Southwest does not offer direct flights between Dallas Love Field and Newark, so North Texas passengers are unlikely to feel the pain of that decision.
However, experts with travel site Airfarewatchdog.com say Thursday's news could have a ripple effect on holiday airfares.
"With fewer seats available and increased demand over the holidays when fares are already extremely expensive, consumers will certainly feel the sting more so than the summer months," said Tracy Stewart, Content Editor at Airfarewatchdog.com. "If by some miracle the MAX really does return in October as Boeing swears, it's highly unlikely we'll see any significant dip in holiday fares. Though Boeing will most likely foot the bill for any revenue lost by the airlines, they still have a lot of financial catching up to do."
Fort-Worth based American Airlines, which also uses the 737 MAX jet, has only announced cancellations through November 2 to this point.