Contrary to past summer seasons, US airlines are facing too many travelers, but not enough planes.
By Anthony Moran
With the peak summer travel season on the way, US airlines would usually be competing to sell tickets and fill seats. But operators of the grounded Boeing 737 MAX are facing a different obstacle: scarce planes and booming demand.
The 737 MAX was grounded worldwide in March following a fatal Ethiopian Airlines crash just five months after a Lion Air crash in Indonesia. All on board both planes were killed.
Southwest Airlines Co., the world’s largest MAX operator, and American Airlines Group Inc with 34 and 24 MAX jetliners respectively, have removed the aircraft from their flying schedules into August.
United Airlines said on Monday it would remove its 14 MAX jets through early July.
According to the US Bureau of Transportation Statistics, Northern Hemisphere airlines earn the most revenue per available seat during June, July, and August.
Southwest’s decision will lead to 160 cancellations of some 4,200 daily flights between June and August, while American Airlines’ removal means about 115 daily cancellations, or 1.5% of its summer flying schedule each day.
Low-cost carrier Southwest, which unlike its rivals only flies Boeing 737s, had estimated $150 million in lost revenue between Feb. 20 and March 31 alone due to cancellations and other factors.
It is likely too soon to estimate the impact of the MAX grounding beyond the first quarter, but the extended cancellations signal that airlines do not expect a quick return of Boeing’s fast-selling jetliner.
Boeing is under pressure to upgrade software that is under scrutiny in both crashes and convince regulators around the world that the plane is safe to fly again, a process expected to take at least 90 days.
