Airlines cancel more Boeing 737 MAX flights as some crash victims refuse to settle

Boeing Co`s shares lost 2.4% as the planemaker grapples with the fallout of two deadly crashes of its 737 MAX jet within five months, which prompted a worldwide grounding in March.

Southwest Airlines Co will not schedule Boeing 737 MAX flights until at least October 1, the airline said on Thursday, just as the families of some Ethiopian Airline crash victims told a Chicago judge they are not ready to settle litigation.

Boeing Co`s shares lost 2.4% as the Chicago planemaker grapples with the fallout of two deadly crashes of its 737 MAX jet within five months, which prompted a worldwide grounding in March and a string of litigation.

On Wednesday, the Federal Aviation Administration warned it had uncovered a new issue that must be resolved before the plane can be ungrounded. Boeing has been working on an upgrade for a stall-prevention system known as MCAS since a Lion Air crash in Indonesia in October, when pilots were believed to have lost a tug of war with software that repeatedly pushed the nose down.

The families of Lion Air crash victims are in settlement talks with Boeing, which means the planemaker can avoid prolonged and potentially costly court litigation. However, the families of some victims of a second crash on Ethiopian Airlines in March are not ready to settle, their lawyers told a Chicago judge on Thursday.

"More and more information is coming to light every day," lawyer Robert Clifford, who represents families of several Ethiopian Airline victims, said in court. His clients want to know what Boeing knew about potential risk in its 737 MAX aircraft and what the company intends to do about it, he said.

A judge granted a request by Clifford and other plaintiff lawyers for discovery over objections by Boeing, meaning the planemaker must turn over documents about the MAX.

Meanwhile, Reuters reported on Wednesday that Boeing will not conduct a certification test flight, a necessary step before formally requesting FAA approval of new software until July 8, under a best-case scenario.  That means the eventual return of the jets for flight may drag into the fourth quarter of the year, analysts said. 

Southwest, the world’s largest MAX operator with 34 jets and dozens more on order, said its decision to remove the MAX from its flying schedule until October 1 would result in about 150 daily flight cancellations out of its total peak daily schedule of 4,000.

Southwest said it "made this decision before any developments of the past few days."  American Airlines, which has canceled MAX flights through early September, said on Thursday it was continuing to monitor the situation, while United Airlines on Wednesday extended its cancellations into September.