As the 737 MAX saga continues, Southwest is really feeling the squeeze. Its latest response is to close its Newark station. Talk about a free gift for United…
Southwest has been forced to cancel an escalating number of flights due to the ongoing grounding of the Boeing 737 MAX. The troubled aircraft, which has been grounded since March, has become a compounding problem for Southwest. Southwest has not only had to pull existing 737 MAXs out of service, but has had to scale back a flight schedule that anticipated regular deliveries of the 737 MAX this year. Those too, of course, have been suspended.
Last quarter, Southwest reported a $175 million dent in revenue and blamed that directly on the 737 MAX program. CEO Gary Kelly told investors:
It’s really all about the MAX. It’s the only thing we’re dealing with. Everything else is rock solid.
This is a tactical decision forced by the MAX groundings and the painful cut of 8 percent of our capacity.
With Southwest forced to look for cuts, Newark Liberty International Airport found itself first on the chopping block. Southwest conceded that Newark had “underperformed” expectations, making it the difficult yet logical choice to be cut. Southwest offered up to 20 daily departures from Newark and will now consolidate New York City operations at La Guardia. All staff at Newark will be offered other positions in the company, though it’s a similar problem to when United shut down its JFK station...it’s not easy to work at LGA when you live down the street from EWR.
Southwest will re-assign some aircraft used for Newark to expand its Hawaii operations. Southwest is also delaying the retirement of seven 737-700 aircraft.
A Gift To United Airlines
The move to abandon Newark comes as a free gift to United Airlines, the dominant hub carrier at EWR. Look for fares to rise on former Southwest Newark routes and further validation of United President Scott Kirby’s plan to aggressively challenge any competitor on United’s home turf.
While Southwest leaves open the possibility of returning to Newark, it appears that it sees greener pastures out west and in Hawaii. That makes United a short-term and potentially long-term winner.
CONCLUSION
For Newark passengers, I am sorry to see Southwest abandon Newark. It’s not that Southwest was always the cheapest option. Quite the contrary, United often matched or beat Southwest on price. But that was the point. Absent this competition, look for prices to creep up, especially for last-minute tickets.
Not surprised it under performed – it’s the worst airport in the US. Even old LGA is just easier and somehow still nicer than EWR-A.
EWR-C may feel newer but is still over-crowded and has a horrendous layout & abysmal lounge situation (besides Polaris).
Could not disagree more. I live in NYC and much prefer Newark over LaGuardia or JFK. In fact, Newark is one of the nicest airports in the country and much easier to get to than the other NYC airports. As for your comment, you sound jealous and pathetic. More business for United!
@ Matthew — Maybe UA can use those extra profits to re-acquire JFK slots.
I can’t help but feel WN has some culpability in what I’m sure will be discovered later as some sort of cover-up re: the 737 Max’s safety issues. As such, if it weren’t for the potentiality of some folks losing their jobs, I’m glad WN is feeling a fiscal pinch. Serves them right and I hope they continue to feel it. AA, too.
If AA and WN helped cover up for the murderous Boeing than a pox on all their houses.
I see opportunities for many airlines.
United: Take the gates.
American: maybe add one DFW flight because WN is dropping DAL-EWR
Alaska: maybe add one or two DAL flights to utilize DAL gates and to be a monopoly on the EWR-DAL route. Not sure if EWR-STL has traffic but both have relatively large businesses. Could add EWR-STL-SEA maybe once a day, EWR-STL-LAX maybe once a day.
Spirit: wherever leisure traffic flies
Southwest was originally “gifted” the gates on the A concourse and slots at EWR in response to the United-Continental merger. Even though EWR is not currently slot controlled and hence plagued with delays Southwest was originally given the gates as a competitive response to the merger.
A free gift? Really? Aren’t all gifts FREE?
Just needed to underscore that point.
i feel bad for Texas farmers this season cuz it seems that all they’re harvesting over there are sour grapes. Southwest chose to jump into EWR on their own free will previously while none of the delay issues are news at all. Reminds me of those Georgian Delta losers who whine about previous nighttime slots at Haneda being tough to work with, as if they didn’t know the slots were nighttime going in.