Southwest Airlines is pulling out of Newark Liberty International, one of the three major airports serving the New York City region, as U.S. airlines grapple with the extended grounding of Boeing’s 737 MAX.
The Dallas-based carrier is “taking necessary steps to mitigate damages and optimize our aircraft and resources” as the single-aisle jetliner’s delayed return to commercial service drags on passenger travel, CEO Gary Kelly said in a statement. The airline’s inability to use the MAX curbed income in the three months through June by $175 million.
Since operations at Newark, New Jersey failed to meet expectations, the airline said Thursday it will consolidate its New York City business at LaGuardia airport in Queens. Southwest is one of three U.S. airlines flying the 737 MAX, and all have removed it from flight schedules into October and November.
American, one of the other customers, also expects its profits to take a hit. The Fort Worth, Texas-based carrier projects full-year earnings will be curbed by $400 million because of the cancellations.
The Federal Aviation Administration ordered the 737 MAX out of commercial service in mid-March after two fatal crashes in Indonesia and Ethiopia. Implicated in both cases was the plane’s anti-stall software, called the Maneuvering Characteristics Augmentation System, which tried to lower the aircraft’s angle of ascent based on erroneous data, leading to a struggle with the pilot.
Boeing set to work on a software patch for the system after the FAA, following its international counterparts, sidelined the 737 MAX, and that fix was completed in May. Federal regulators, however, have not yet signed off on the modification and it’s unclear when the aircraft will return to service.
The planemaker posted a $2.9 billion loss for the three months through June after booking charges related to the grounding.
[Related: Lawsuit claims Boeing and Southwest covered up defect in 737 MAX]
