Southwest Announces Its Departure From Newark

Southwest Airlines currently owns the largest fleet of Boeing 737 MAX airframes among U.S. based carriers. During their second-quarter earnings announcement, airline CEO Gary Kelly said they were optimistic to start flying the 737 MAX by the end of 2020.

During their second-quarter earnings call, Southwest Airlines chief executive Gary C. Kelly announced the airline’s retreat out of Newark Liberty International Airport. While the carrier claims it was because of the extended grounding of the Boeing 737 MAX, other reports suggest United Airlines may have played a part.

On July 25, 2019, Southwest Airlines announced they would end their flights out of Newark Liberty International Airport (EWR), effective November 3, 2019. The decision was communicated by the airline’s CEO, Gary C. Kelly, citing the extended grounding of the Boeing 737 MAX aircraft as the primary factor for pulling the plug.

“Based on the extensive delays in returning the MAX to service, we expect that annual 2019 [available seat miles] will now decrease in the 1 to 2 percent range, year-over-year, compared with our original 2019 plan to grow capacity nearly 5 percent, year-over-year,” Kelly said on the call. “As such, we are taking necessary steps to mitigate damages and optimize our aircraft and resources.”

It’s no secret that Southwest has faced the biggest hit on flights. As the largest operator of the troubled airframe, the carrier grounded 34 of the 737 MAX 8 aircraft on the orders of the Federal Aviation Administration. While that may be one mitigating factor in leaving Newark and consolidating all New York service to LaGuardia International Airport (LGA), there may have been other factors in play.

A report by Skift suggests that United Airlines’ strategy under new president Scott Kirby may also have a part to play in the situation. Their research suggests that between Kirby’s new direction in adding more flights and marketing to their long-time hub of Newark, combined with the FAA decision to reduce slot pressure at the airport, Southwest may have been pressured out by United’s new presence.

Furthermore, the report suggests that this isn’t Kirby’s first attack on the Dallas-based airline. When Southwest began expanding market share at Philadelphia International Airport (PHL) – formerly a US Airways hub – Kirby started putting pressure on regaining flyers after the merger with American Airlines. As a result, American drove Southwest’s market share to under 10 percent, leaving them with the largest market share at the airport.

If United did pressure Southwest out of Newark, it would not be the first time the Chicago-based carrier went to lengths to protect their New York hub. In 2013, United was caught up in a scandal by continuing a non-profitable flight for then Port Authority of New York and New Jersey chairman David Samson in exchange for allegedly requesting airport improvements and upgrades. The backlash ended the tenure of then United chief executive Jeff Smisek.

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