Southwest Airlines is reportedly pulling out of the Newark Liberty International airport because of the prolonged grounding of Boeing 737 Max. The jet will not resume flying until next year, announced the company on Thursday.
The company cited unexpected financial loss at the airport the reason for its break-up. The airlines have a total of 125 employees working at the Newark airport. These employees will be reassigned to different airports by Southwest. The airline will cease operations at the airport from November 3. The passengers who have already booked ahead this date will be given different options for other flights. Currently, the New Jersey airport has 20 flights coming in and going out of the airport to a total of 10 cities.
The 737 Max aircraft are not expected to resume flying before January 5, 2020. The airline currently has 34 such planes which the largest number of 737 Max aircraft is that any US airline has in their fleet. The aircraft has been grounded since March this year when about 300 people lost their lives due to a crash in Ethiopia which was the second such accident within 6 months. Boeing expects the planes to be able to start flying again by the early 4th quarter. The grounding has cost Southwest about $175 million operating loss, as reported by the airline on Thursday in its 2nd-quarter earnings report.
Gary Kelly, the CEO of the airline is reportedly in talks with Boeing over compensation for the grounding. Kelly said that “We have not reached any conclusions regarding these matters, and no amounts from Boeing have been included in our second-quarter results.” The grounding is also going to affect the expected growth of the capacity of the airline. The airline had earlier expected a 5% growth in the capacity expansion which is now expected to be somewhere around 2%.