Southwest Airlines is pulling out of Newark Liberty International Airport and consolidating its operations at LaGuardia due to the continued grounding of the Boeing 737 Max plane, which it has more of than any other carrier, the airline said in its second-quarter earnings release Thursday.
Effective Nov. 3, the budget airline will no longer fly out of Newark, citing limited growth opportunity. It will also decrease its capacity by as much as 2 percent, whereas it had previously forecasted growth of 5 percent, because of the "extensive delays" in getting the Max planes back in the air.
"The financial results at Newark have been below expectations, despite the efforts of our excellent Team at Newark," the statement from CEO and Chairman of the Board Gary Kelly said. "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. As part of this move, we will offer options and flexibility for Customers to recover planned travel from other area airports."
Southwest Airlines, which has 34 Max jets — more than any other carrier — has been canceling about 150 flights per day. The plane was grounded in March following two deadly crashes in Indonesia and Ethiopia.
Southwest said the most recent guidance from Boeing means the Max plane may not return to service until the fourth quarter of 2019, but the airline would still have to comply with federal directives regarding its return to service -- and "we offer no assurances that our current assumptions and timelines are correct." In the interest of mitigating damages and optimizing its aircraft and resources, Southwest said it had to rethink its operations.
Shares were down more than 4 percent in premarket trading, CNBC reported. Southwest says it has had preliminary discussions with Boeing about compensation for damages connected to the Max plane grounding.