737 grounding to cost big Europe tour company at least $225M

737 grounding to cost big Europe tour company at least $225M
KOMO via CNN

Grounding the Boeing 737 Max will hit profits at German travel company TUI.

Europe’s largest tour company said Friday that its 2019 earnings would be reduced by €200 million ($225 million), assuming flights of the best-selling aircraft resume by mid-July.

Shares in TUI plummeted 8% in Frankfurt following the announcement.

The company operates 15 of the grounded Boeing aircraft, which make up 10% of its total fleet, and it was expecting another eight of the jets to be delivered by the end of May.

TUI said grounding the 737 Max has forced it to lease new aircraft and extend the leases on others. It needs to know “within weeks” when flights will resume otherwise profits could take an additional hit of €100 million ($112 million), the company added.

The profit warning is the latest example of the mounting financial cost to Boeing’s customers of the decision to ground all 737 Max planes following two deadly crashes in five months.

Southwest Airlines warned earlier this week that the 737 Max groundings are hurting its ticket sales.

The carrier said the number of seats it can sell this quarter will be much lower than previously expected because it isn’t flying as many planes. It said it’s canceled 2,800 flights because of the 737 issue.

Southwest has more 737 Max planes than any other U.S. airline. American Airlines and United Airlines also have the planes in their fleets.

Boeing unveiled an overhaul to a software system and additional pilot training for the 737 Max on Wednesday.

Aviation authorities have fingered the software system as a leading factor in a Lion Air crash last October. Investigators have drawn similarities between flight data from that crash and the Ethiopian Airlines crash this month.