Southwest pulling out of Newark, blames 737 Max grounding

Southwest Airlines is halting service to Newark Liberty International Airport this fall, blaming the continued grounding of the Boeing 737 Max.

It is the first time an airline has dropped a destination outright because of the grounding.

It will end service on November 3 and the airline’s workforce of 125 will be offered jobs at New York LaGuardia and other locations.

The airline says the longer-than-expected grounding has forced the airline to consolidate in New York.

Southwest has to ‘mitigate damages and optimize our aircraft and resources. CEO Gary Kelly said.

"We have had preliminary discussions with Boeing regarding compensation for damages due to the Max groundings (but) have not reached any conclusions regarding these matters," Kelly said.

The Boeing 737 Max has been grounded worldwide since March after two deadly crashes in the space of a few months.

As a direct result Boeing posted its worst financial quarter ever as revenue sunk by more than one-third.

Boeing said it could halt production of the jet if the grounding stretches into the new year.