Southwest cancels more flights amid inspections

ATLANTA Mon Apr 4, 2011 10:23am EDT

Southwest mechanics work on a Boeing 737 inside a hanger at the Phoenix Sky Harbor International Airport in Phoenix, Arizona April 2, 2011. REUTERS/Rick Scuteri

Southwest mechanics work on a Boeing 737 inside a hanger at the Phoenix Sky Harbor International Airport in Phoenix, Arizona April 2, 2011.

Credit: Reuters/Rick Scuteri

ATLANTA (Reuters) - Southwest Airlines Co (LUV.N) cancelled 70 flights on Monday as it continued to inspect Boeing (BA.N) 737 planes following the emergency landing on Friday of a jet with a hole in its fuselage.

Spokeswoman Whitney Eichinger said 70 flights systemwide were cancelled for Monday out of about 3,400 daily flights. Of 79 Boeing older 737-300 model planes that were designated for additional inspections after the April 1 incident, 33 had been returned to service, she said.

The discount airline cancelled 600 flights over the weekend as it checked 737-300 planes for fuselage cracks and fatigue after one of its planes with a gaping hole made an emergency landing in Arizona. Flight 812 was heading from Phoenix to Sacramento when a 5-foot (1.52 meters) tear opened in the fuselage 20 minutes after takeoff.

So far, inspections have turned up cracks in two other planes, Southwest said.

Boeing was expected to issue a service bulletin to operators of 737-300s worldwide on inspection procedures for the subset of planes affected, especially those with particularly heavy use, aviation officials said. Boeing did not have an immediate comment on Monday.

The narrowbody 737 is Boeing's best selling model. There are about 280 737-300s currently in the U.S. airline fleet, and 900 globally.

James Higgins, an analyst with Soleil Securities, said the flight cancellations will cause some revenue loss for Southwest but he doesn't expect lasting fallout from this incident. Southwest expects to close its pending acquisition of AirTran Holdings AAI.N in the second quarter.

"I don't think there is anything systematic or persistent here," Higgins said. "This is more noteworthy for its headline generation than for its likely damage to the company."

Shares of Southwest, which only operates Boeing 737 planes, were down 2.6 percent, or 33 cents, at $12.34 in morning trading on Monday, while Boeing was off 17 cents, or 0.2 percent, at $73.84. The Arca Airline index .XAL was down 0.9 percent. (Reporting by Karen Jacobs, additional reporting by John Crawley in Washington, editing by Dave Zimmerman)

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