Southwest Airlines says that it lost almost a billion dollars in operating income due to the grounding of the Boeing 737 Max aircraft, as it joins other airlines in scrambling to find capacity and make up for the jet’s ongoing problems. “I am confident about the Max, and our pilots are confident about the Max,” CE Gary Kelly said Thursday. “The timing remains uncertain, and we are working through all that right now.” Kelly says that 2019 full-year operating profit was US$828m – or 28% - lower than had the Max been flying in the airline’s all-737 fleet. The carrier’s net profit in the full year 2019 fell to $2.3b from $2.4b in 2018. In the final quarter of 2019, net profit hit $514m, down 21% from $654m in the same quarter a year ago. Full-year revenues rose to $22.4b from $21.9b, up 2.1%. <br/>
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The FAA says it is investigating reports that it gave Southwest Airlines “preferential treatment” when it authorised the airline’s routes from the US mainland to Hawaii last year. The Wall Street Journal reported Thursday that the FAA may have acted improperly when it authorised the flights. A letter from the Office of Special Counsel concluded that a whistleblower’s complaint that the FAA rushed the approval process for the flights is credible. Southwest launched operations to Hawaii in March, and now offers almost 30 connections between 4 cities in California and the Pacific archipelago every day. In addition, it has opened an extensive interisland network of 38 daily flights that serves as a direct assault on Hawaiian Airlines’ dominance in the region. <br/>
JetBlue Airways said Thursday it had shaved US$314m off its cost base over the past 3 years, delivering on a cost-cutting drive designed to enable budget-friendly airfares over the next decade. Curbing costs is a priority for many companies, but particularly for airlines like JetBlue, where costs have been rising faster than for many peers and whose business model depends on fares that can compete with legacy airlines. Still, JetBlue expects costs to rise 1.5% to 3.5% in Q1, partly due to scheduled aircraft maintenance, before coming under control in 2020 with an estimated decline of up to 2%. JetBlue said operating expenses per available seat mile, excluding fuel were flat in Q4 thanks to the savings program. The airline is seeking to grow its capacity by between 5.5% and 7.5% this year. <br/>
Vistara is considering ordering more 787 Dreamliner jets — whose sticker prices start at about US$250m each — from Boeing to add flights to destinations as far away as the US, people familiar with the matter said. The carrier is also mulling buying more A320neo-family planes from Airbus, including the longest-range A321XLR model, they said. For Vistara, which counts Tata Group as its majority shareholder, the move would be part of plans to loosen Emirates and Etihad Airways grip over the lucrative market of flying passengers between India and Europe or the US. As part of its expansion plans, Vistara is also considering buying some of London Heathrow airport’s prized slots which may determine the scale of the carrier’s plane orders, one of the people said. <br/>