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Boeing 737 Max grounding hits Southwest's pilot hiring

Key Points
  • Southwest is putting off some pilot hiring as the Boeing 737 Max stays grounded.
  • The jets have been grounded since mid-March after two fatal crashes.
  • The airline says it made the decision because it is unclear when the planes will fly again.
Southwest Airlines Boeing 737 MAX aircraft are parked on the tarmac after being grounded, at the Southern California Logistics Airport in Victorville, California on March 28, 2019.
Mark Ralston | AFP | Getty Images

The Boeing 737 Max grounding is starting to affect pilot hiring as the planes remain out of the skies for a fifth month.

Southwest Airlines said it delayed hiring for two classes of new pilots, which have about 25 apiece, and postponed captain upgrades for two other classes of current pilots because it isn't clear when the Max planes will fly again. Dallas-based Southwest is the biggest U.S. operator of the Boeing 737 Max with 34 in its fleet of around 750 aircraft.

Airlines have already canceled thousands of flights and have removed the jets from their schedules through the fall with no sense from regulators of when the planes will be allowed to fly again. Aviation officials worldwide grounded the jets in mid-March after two fatal crashes claimed a total of 346 lives.

"All of these classes were scheduled to take place in either September, October, or December of this year to support our previously anticipated delivery of 37 MAX 8 and 7 MAX 7 aircraft in 2019," Southwest said in a statement. "Once we have more clarity on the return-to-service date of the MAX, and future MAX delivery timelines, we will look towards reinstating classes, as needed, to support the expected growth of our fleet."

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Southwest operates an all-Boeing 737 fleet and had about 9,100 pilots as of the end of last year, according to a company filing.

Other airlines are also grappling with the affects of the grounding, which has coincided with the summer travel season, U.S. airlines' busiest time of year. United, which is scheduled to report second-quarter results after the market closes Tuesday, and American in the past week removed the planes from their schedules until early November, several months later than previously expected. Southwest removed the planes from its schedules until October.

Boeing has developed a software fix for a system that investigators implicated in the two crashes — one in Indonesia in October and another in Ethiopia in March. But regulators have not indicated when they expect to approve the fix along with a package of pilot training updates and materials.

American and Southwest will update investors on the impact of the Max grounding when they report second-quarter results on July 25. American last week said it expects the Max grounding cost it $185 million in pretax income in the three months ended June 30, but that fuller planes likely drove up revenue for each seat it flies a mile, a key industry metric.

European budget airline Ryanair on Tuesday cut its passenger growth forecast for next summer, saying it expects to have fewer Max planes flying by then than it expected.

Rival Delta Air Lines doesn't have any Boeing 737 Max planes and told investors last week that it has benefited slightly from its competitors' constrained fleets due to the grounding. Delta's stock hit an all-time high of $63.11 on Tuesday.

VIDEO4:3104:31
Airlines provide different timelines for the re-entry of the 737 Max