Southwest says 737 Max grounding is cutting into its profit margin

The airline, which has 34 of the troubled Boeing jets in its fleet, trimmed its forecast for the first quarter of the year.
Image: A Boeing 737 Max 8 jetliner, belonging to Southwest Airlines, lands at McCarran International Airport in Las Vegas
A Boeing 737 Max 8 jetliner, belonging to Southwest Airlines, lands at McCarran International Airport in Las Vegas, on Feb. 27, 2019.Larry MacDougal / AP file

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By Lucy Bayly and Reuters

Southwest Airlines said on Wednesday the recent groundings of Boeing 737 Max planes would lead to its first-quarter revenue per available seat mile coming in below its previous forecast.

It is the first carrier to provide a formal change to its financial forecasts since the recent crash of Boeing's new jet. The airline expects to lose $150 million in the first quarter. Shares fell almost 3 percent on the news.

Southwest has 34 of the planes in its fleet of about 750 Boeing 737s, more than any other U.S. airline.

The airline said it now expects operating revenue per available seat mile, a closely followed measure of airline performance, to rise about 2 percent to 3 percent, compared with the 3 percent to 4 percent growth it forecast earlier.

The news comes just one day after the airline said a Boeing 737 Max 8 plane — the same model that the Federal Aviation Administration grounded after two recent crashesmade an emergency landing at Orlando International Airport on Tuesday afternoon.

No passengers were on board, and the pilots were flying the jet to California for storage when an engine overheated just before 3 p.m., a spokesman for the airline told NBC News. The plane was in the air about 11 minutes, the spokesman said.

Boeing grounded its entire fleet of 737 Max jets after investigators found that an Ethiopian Airlines aircraft that crashed March 10 had a flight pattern very similar to a Lion Air flight that went down in Indonesia in October.