SWA Makes Dramatic Course Corrections as MAX 8 Crisis Continues

Failing to live up to its projected growth numbers so far in 2019, Southwest Airlines made some dramatic moves this week to keep the airline on the right trajectory. To that end, the airline announced its plans to pull its operations at Newark Liberty International Airport and consolidate its operations for the New York City area at LaGuardia.

As of November 3, the budget carrier will no longer fly out of Newark, citing “extensive delays” in getting the Max planes back in the air.

At the same time, Southwest discussed plans to resume expanding service to Hawaii – a plan that had been curtailed initially due to the ongoing grounding of Boeing Max 8 aircraft. The Dallas-based budget carrier began Hawaii service in March and intends to offer flights to Hawaii from Sacramento and San Diego. It also launched its interisland service that month with flights between Honolulu and Kahului. The company has 16 interisland flights and plans to offer service to Lihue on Kauai and Hilo on Hawaii island, according to reports from the Associated Press.

In its second quarter earnings report, Southwest CEO Gary Kelly noted that the airline’s Max 8 groundings will now extend beyond 2019 into 2020. In announcing that, Southwest became the first carrier to do so.

“The MAX groundings, and the resulting available seat mile (ASM, or capacity) decline, put significant pressure on second quarter 2019 unit costs. We expect unit cost penalties for second half 2019 due to the MAX groundings, as well.

“Based on the most recent guidance from Boeing, we currently are assuming regulatory approval of MAX return to service during fourth quarter 2019. With this in mind, we will proactively extend the MAX-related flight schedule adjustments through January 5, 2020, to provide reliability of our operation and dependability for our Customers booking their fall and holiday travel,” Kelly said in a statement from the airline.

“Based on the extensive delays in returning the MAX to service, we expect that annual 2019 ASMs will now decrease in the 1 to 2 percent range, year-over-year, compared with our original 2019 plan to grow capacity nearly 5 percent, year-over-year. As such, we are taking necessary steps to mitigate damages and optimize our aircraft and resources.”