Southwest's Bad News Is Worse News for Boeing

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Southwest Airlines (LUV) - Get Report announcement on Tuesday that it is pushing back scheduling flights on its Boeing (BA) - Get Report 737 MAX jets until mid-April is another punch in the gut to Boeing, which continues to reel from the ongoing grounding of the beleaguered aircraft.

Southwest, the biggest operator of the single-aisle jet, is extending the timeline to April 16 from March 6 because of “continued uncertainty” surrounding the plane’s return to the skies, the company said in a statement on Tuesday.

The follows less than 24 hours after Boeing said it would temporarily halt production of the 737 MAX starting in January amid ongoing scrutiny by the Federal Aviation Administration and others over whether safety issues surrounding its MCAT software are resolved.

The real effect of the push-back however, is on Boeing, however, as airlines including Southwest, American Airlines Group (AAL) - Get Report, United Airlines Holdings (UAL) - Get Report and others have all adapted fairly well to moving passengers around without the jets in their fleet.

Southwest, which had 34 of the planes when they were ordered to be parked, plans to reduce last-minute flight cancellations and unexpected disruptions to travel plans by keeping the 737 Max off its schedule, according to the statement. 

Airlines have struggling with the grounding of 737 MAX jets - and the lack of delivery of new ones - since March, when the Federal Aviation Administration ordered all of the airplanes to be grounded.

Since that time, Boeing has been working with regulators and other officials to determine the precise cause of the software failure that killed 354 people in two separate crashes, and re-certify the plane to get it back in the skies.