The grounding of Boeing’s 737 MAX fleet is continuing to have ripple effects in the air-travel industry.
said early Thursday that it would end flights at Newark Liberty International Airport this fall. The reason: The airline, which has the largest exposure of U.S. airlines to
’s 737 MAX, is dealing with a reduced capacity for flights while the jets are grounded.
American Airlines Group
which along with Southwest reported earnings before the opening bell Thursday, delivered more bad news for the industry. It said the Boeing grounding would likely shave $400 million off its pretax earnings in 2019, up from earlier estimates of $350 million. American’s shares fell 8.4% Thursday.
The dual reports sent many airline stocks lower, with the U.S. Global Jets exchange-traded fund—which includes U.S. companies such as Southwest, American and
United Airlines Holdings
along with foreign airlines—falling 1.7%.
Southwest shares, which initially dropped, ended the day up 0.3% after executives stressed that they would use the planes they were flying into and out of Newark in markets like Hawaii that tend to be more lucrative.
Shares of Boeing, which said Wednesday it might have to halt 737 MAX production if the grounding dragged on, dropped 3.7%.
Investors aren’t as heavily punishing airlines that don’t greatly rely on Boeing’s troubled model.
initially jumped past the S&P 500 Thursday, flirting with a record before closing down 0.2%. It is one of the airlines that had no plans to fly Boeing’s 737 MAX in the coming months, meaning the continuing grounding has had no effect on its bottom line.
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