Southwest cancels more flights amid inspections

ATLANTA (Reuters) - Southwest Airlines Co canceled 70 flights on Monday as it continued to inspect Boeing 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 canceled 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.

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.

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 in the second quarter.

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 was down 0.9 percent.

(Reporting by Karen Jacobs, additional reporting by John Crawley in Washington, editing by Dave Zimmerman)