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Southwest Airlines (NYSE:LUV) first-quarter earnings took a hit from the prolonged grounding of the Boeing (NYSE:BA) 737 Max jets that forced it to cancel more than 10,000 flights during the quarter, as well as the U.S. government shutdown and maintenance issues.
The airline, which has 34 of the Max jets, said it lost more than $200 million in revenue during the quarter as a result. The shutdown and groundings also impacted the company's revenue per available seat mile by two points. The carrier said it's extending Max cancellations through Aug. 5.
Adjusted earnings came in at 70 cents, compared to 61 cents per share forecast. Revenue was $5.15 billion vs $5.12 billion forecast
The 737 Max has been grounded since mid-March after the jet's anti-stall software was implicated in two fatal crashes in Ethiopia and Indonesia.
"Flight cancellations are expected to drive unit cost pressure for the duration of the MAX groundings," Southwest Chief Executive Officer Gary Kelly said, describing the results as "solid" despite several challenges throughout the quarter.
Raymond James downgraded Southwest stock and lowered its earnings projections in April, citing the Max groundings.
It's unclear when the Max will return. Boeing, which expects a hit of more than $1 billion from the grounding, said it's completed 96 flights totaling over 159 hours of air time with the new Max software fix.
Shares in Southwest took off for the skies $1.08, or 2%, to $54.00, while shares in Boeing opened Thursday dropped $1.28 to $374.18