U.S. Markets closed

Southwest Falls Midday; Pilots Seek Compensation for Grounded Boeings

Investing.com - Southwest Airlines was down in midday trade on Wednesday as it lowered its capacity outlook due to the continued grounding of its Boeing 737 Max jets.

Southwest has 34 of Boeing’s controversial jets, which have been grounded due to safety concerns after two fatal crashes. Southwest said it expects second-quarter capacity to fall 3.5%, compared with previous guidance of a year-over-year drop of 2% to 3%.

Still, “the company has continued to experience solid demand and strong passenger yield trends year/year during second quarter 2019,” according to Briefing.com.

Southwest raised it second-quarter unit revenue guidance, expecting revenue per seat mile to rise 6.5% to 7.5% compared to a prior guidance of 5.5% to 7.5%.

Available seat miles are expected to decline 3.5%.

Meanwhile a group of Southwest Airlines pilots are seeking compensation from Boeing over the disruption caused by the 737 Max groundings. The pilots’ union said on its website that it will be “seeking compensation and reimbursement from Boeing for every dollar legally available to be challenged, when the Max issues are resolved.”

Southwest Airlines (NYSE:LUV) fell 1.2%, while Boeing (NYSE:BA) slipped 0.2% and rival American Airlines (NASDAQ:AAL) rose 0.8%.

Related Articles

Boeing in talks for more 737 MAX orders after IAG

Flows into Asian money market funds jump on trade, growth worries

Stocks up, dollar, bond yields down on Fed rate cut signal