Southwest Reports $150 Million in Lost Revenue From Grounding and Disruptions

Southwest Airlines has had a bumpy year so far.

According to a new filing with the Securities and Exchange Commission, Southwest has lost $150 million in revenue, some of which is related to the grounding of their 34 Boeing 737 Max 8 jets.

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The company had to cancel 9,400 flights in the first quarter due to multiple issues. Of the 9,400 cancelations, about 3,800 flights were canceled due to winter weather, 2,800 canceled flights were related to the Boeing 737 Max 8 grounding and 2,800 were caused by their quarrel with their mechanic's union.

Southwest is managing the cancellation issues and helping passengers on new flights to avoid disruptions. However, because of the groundings, the airline estimates that their first quarter annual growth will only be one percent which is significantly lower than the projected 3.5 percent.

While Southwest has reached an agreement with their mechanic's union and we will soon be beyond winter weather issues, Southwest noted in the SEC filing that they are still uncertain if the FAA will lift the grounding of the 737 MAX aircraft and if this may impact their revenue beyond the first quarter.

With 41 more Boeing 737 MAX 8 planes on order and set to be delivered within the year and the FAA currently working to review the new systems update for the jets, it’s understandable that Southwest is concerned.