Removing the grounded Boeing 737 MAX from their flight schedules was painful enough for the three U.S. airlines that flew the aircraft. Losing the jets during the lucrative spring break travel season makes it even worse.
Trimmed flight schedules, which has already begin to disrupt plans for some of the 157 million college students and others the industry expects to fly U.S. carriers from late February through the end of April, will erode the accompanying seasonal sales boost for American, Southwest, and United airlines.
“The timing is unfortunate, because demand has been increasing with spring break and the Easter holidays,” Helaine Becker, an analyst with Cowen & Co., said in a report. Because airlines are already flying fuller planes, their ability to re-schedule passengers in the next few weeks is limited, and doing so may cost them fares from last-minute and corporate travelers, she added.
“While we do not know how long the grounding will last, the first few weeks are more concerning,” Becker said. “Once airlines adjust their schedules and make the substitutions, life goes on.”
The 737 MAX, the latest version of a widely-flown single-aisle jetliner, was sidelined by the Federal Aviation Administration on March 14 after two recent crashes overseas that killed more than 300 people. Although the move forced airlines to rearrange their schedules and cancel flights, the impact would have been much worse with a more established model.
While the MAX is the best-selling model in Boeing’s history, generating more than 4,600 orders, deliveries didn’t begin until mid-2017 and just 67 of the aircraft were flown in the U.S.
Fort Worth, Texas-based American Airlines, which has 24 of the planes, had been using them on 90 flights a day and said in a regulatory filing that it has canceled that many through April 24. The moves “have caused, and are expected to continue to cause, significant disruption to our customers and financial costs to us,” American said, though it’s too early to estimate how much.
United, which owned only 14 of the planes and was using them about 40 times a day, said the initial impact of the grounding on operations and costs was limited but would increase if the jetliner isn’t allowed back into service before the busy summer travel season begins.
Southwest said its 34 MAX airplanes represented only a fraction of its fleet of 750 aircraft and predicted the grounding would affect only about 160 of its roughly 4,000 flights a day.
Committees in both the House and Senate are already looking into the FAA’s original certification of the plane’s use for commercial air travel, with some lawmakers questioning why the agency didn’t pull the aircraft until countries from China to the U.K. had already done so.
In the first of the MAX crashes, which occured Oct. 29 in Indonesia, a malfunctioning sensor fed incorrect data on the airliner’s ascent vector to a computer system that attempted to lower the angle at which it was ascending to avoid a stall, officials said.
That prompted a struggle between new computer software — known as the Maneuvering Characteristics Augmentation System, or MCAS — and the pilot, who ultimately lost control of the aircraft. All 189 people aboard were killed.
U.S. regulators later ordered airlines to update operations manuals on the handling of such issues, and Boeing is installing a mandated software patch by April.
The fact that the patch hadn’t been completed was part of what prompted the high level of concern after the second crash, which occurred March 10 outside Ethiopia’s capital of Addis Ababa, killing all of the 157 occupants aboard an Ethiopian Airlines flight.
The carrier’s CEO, Tewolde Gebremariam, told the Wall Street Journal that he believes the anti-stall software was operating when the plane came down.
