Southwest won’t use older jets while Max planes sit

Southwest Airlines Co., which is canceling 150 flights a day as the Boeing Co. 737 Max remains grounded, says it won’t bring back used 737 models to help cover the void.

Southwest, the largest operator of the Max, is assessing its options and taking a “hard look” at the fourth quarter in case the plane remains grounded through the end of the year, CEO Gary Kelly said in a regular weekly message to employees. The Federal Aviation Administration has said it won’t allow the Max to resume flying until it’s sure the plane is safe.

“I think we have a line of sight to getting the Max into service here,” Kelly said, rejecting some worker suggestions that the carrier take on used 737-800s or an older version known as the Classic. “Our focus, if anything, would be on maybe slowing down some of the retirements of the -700s we currently operate.”

Cancellations at Southwest will swell to 180 flights daily as of Oct. 2. Last week, the carrier extended the period in which the Max remains out of its schedule through Nov. 2.

Southwest makes more than 4,000 flights on its busiest days. The Max has been grounded worldwide since March 13 after two fatal crashes within five months killed 346 people.

“The longer it goes, the harder it is for us to manage,” Kelly said. Southwest has 34 Max planes and had been scheduled to receive 41 more this year.

The carrier has been returning 737-700s to an aircraft leasing unit of General Electric Co. as their contracts have expired, a spokeswoman said last week.

Uncertainty around the return to service of Boeing’s best-selling jet is putting the company’s credit rating at risk as the grounding of the Max drags into a fifth month, with Moody’s Investors Service joining Fitch Ratings in sounding a warning.

Boeing faces a $5 billion cashflow drain this year as it continues to churn out aircraft it can’t deliver until regulators around the globe clear the Max to resume commercial flights, Moody’s said in a statement Monday. Like Fitch, Moody’s affirmed Boeing’s rating at the sixth-highest level of investment quality while cutting the outlook to negative.

“Financial risk relative to the company’s pregrounding profile has meaningfully increased, and the resolution and ultimate impact for Boeing, both financially and reputationally, remain unknown,” Moody’s said.