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Southwest Airlines profits tumble after Boeing 737 Max grounding drove up costs

Southwest Airlines profits tumbled more than 20% after the 737 Max drove up costs.

24.1.2020

“We need to get this thing done and get the Max back up in the air.” Southwest Airlines CEO Gary Kelly says there needs to be transparency and strong performance for passengers to feel confident in the safety of Boeing’s 737 Max.

Southwest Airlines profits tumbled more than 20% after the 737 Max drove up costs.

Boeing 737 Max drove up the Dallas-based carrier's costs, it said Thursday. Southwest has the most Boeing 737 Max planes in its fleet and on order than any other U.S. airline. The planes have been grounded since March after two fatal crashes — one in Indonesia in October 2018 and another in Ethiopia less than five months later — killed 346 people. The financial impact from the grounding isn't over yet for Southwest, the carrier warned. Boeing this week said it doesn't expect regulators to allow the fuel-efficient planes to fly again until midyear , meaning carriers won't have the Max in time for the peak summer travel season. Southwest's net income fell 21% to $514 million from a year earlier on revenue of $5.73 billion, which was slightly ahead of analysts' estimates and up 0.4% on the year. The grounding reduced Southwest's operating income by $313 million in the fourth quarter and $828 million for all of 2019, the carrier said. Southwest has pulled the planes from its schedules until early June but said Thursday that it expects to make another adjustment based on Boeing's new timeline. The carrier last month said it reached an agreement with Boeing for the financial damages from the grounding last year, and it expects more money from the manufacturer to compensate it for additional costs this year. Southwest said its costs rose 7.7% last year from 2018 mainly because of the Max grounding. Southwest CEO Gary Kelly said in a statement the company will "continue to incur financial damages in 2020, and we will continue discussions with Boeing regarding further compensation." He added that "no estimated settlement amounts relating to financial damages beyond 2019 have been factored into our 2020 outlook." The airline posted earnings of $1.16 a share on an adjusted basis, higher than the $1.09 a share analysts expected. Related Tags Read more: CNBC

Let’s have the CEO’s and the Boeing execs and engineers test drive it for a few months.

Southwest Airlines fourth-quarter profit fell 21% after Boeing 737 Max grounding drove up costsSouthwest Airlines fourth-quarter profits tumbled more than 21% because of additional costs related to the grounded Boeing 737 Max.

United Airlines Reports Stronger Profit, RevenueUnited Airlines reported higher profit in the latest quarter on stronger revenue and lower fuel costs, despite challenges from the grounding of Boeing’s 737 MAX. And by cutting back on treating passengers like human beings Can they park all of these grounded 737 Max planes on golf courses and turn them into low income housing? 🤔 Give up the max air people can hardly trust that plane

Southwest Airlines beat earnings estimates despite hit from grounded Boeing 737 MaxSouthwest Airlines beat fourth-quarter estimates.

Southwest 2019 earnings, capacity fell because of 737 Max - Business InsiderSouthwest saw profits fall 21% as costs rose due to the 737 Max grounding, and capacity fell 1.5% despite plans for 5% growth.

Wall Street pegs Boeing's 737 MAX bill at more than $25 billion Boeing Co 's bill for the 737 MAX grounding could balloon to more than $25 b... Until they purge their design engineering leadership I will never fly a Max But they saved on the hourly by outsourcing software design...so they have that going for them... Brazil comfirs first case corona virus in distric Belo Horizonte , brazil. 22-01-19

American Airlines' profits jump despite Boeing 737 Max problems“We’re obviously disappointed to see the return to service date likely moving back,” American Airlines CEO Doug Parker says about the 737 Max. Despite the ongoing grounding, American posted higher profits in Q4.



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