Skift Take
Southwest said it would leave four airports in a bid to cut costs as delivery delays with the Boeing 737 Max 7 strain its growth plans.
Southwest Airlines is pulling out of four airports as it deals with Boeing delays.
The carrier is exiting Bellingham International Airport, Cozumel International Airport, George Bush Intercontinental Airport and Syracuse Hancock Airport, CEO Bob Jordan said in an earnings release on Thursday.
Southwest also reported a wider-than-expected first-quarter loss at $231 million. However, Jordan said Southwest also had record revenues ($6.3 billion) and passengers flown during the first three months of 2024.
Boeing delivery delays are continuing to strain the airline industry. The plane maker is currently manufacturing fewer 737 Maxes due to increased production oversight to weed out quality issues following the Alaska Airlines blowout incident.
Pausing Hiring Plans and Trimming Expectations
Southwest previously said it would slow pilot and flight attendant hiring due to delays with the Max 7, which is still not certified.
“Given the news on Boeing aircraft delivery delays … managing our plan just is not enough,” Jordan said at the JPMorgan Industrials Conference March 12. “Going forward, we are actively and urgently focused on further cost reductions.”
Jordan said the Southwest is now expecting to end the year with 2,000 fewer employees compared to 2023.
Southwest is also further trimming its delivery expectations. Previously, the airline said it expected to receive 46 737 Maxes and zero Max 7s in 2024. Now, those expectations have been slashed to 20 737 Max deliveries for the year.
These delays, along with the consequent capacity reductions for the second half of the year are expected to dampen Southwest’s full-year financial targets.
The carrier previously said it expects to cut its schedule during the latter half of 2024 partly due to rising operating costs stemming from record deals with its pilots’ and flight attendants’ unions.
