Southwest cuts growth plans, warning effect of Boeing airplane delays will last into 2025

Southwest
Airlines
on
Thursday
posted
a
wider
loss
for
the
first
quarter
than
the
same
period
last
year
and
warned
that


Boeing’s
airplane
delays
will
hamper
its
growth
into
2025.

The
airline
expects
to
grow
capacity
4%
this
year,
down
from
a
plan
to
expand
6%.
For
the
second
quarter,
it
forecast
growth
of
8%
to
9%
and
said
revenue
would
be
down
as
much
as
3.5%.

Shares
of
Southwest
fell
roughly
10%
in
premarket
trading.

The
airline
said
in
a
quarterly
filing
that
it
now
expects
to
receive
only
20
Boeing
737
Max
8
planes,
down
from
its
previous
forecast
of
46
of
them.
The
carrier
will
now
delay
retiring
some
of
its
older
Boeing
planes
and
is
cutting
costs,
including
by
offering
staff
voluntary
time
off.
Southwest
said
it
expects
to
end
the
year
with
2,000
fewer
employees
than
it
had
at
the
end
of
2023.

It
will
also
shut
down
operations
at
some
airports,
including
in
Syracuse,
New
York;
Bellingham
International
Airport
in
Washington;
Cozumel
International
Airport;
and Houston’s
George
Bush
Intercontinental.

“Achieving
our
financial
goals
is
an
immediate
imperative,”
CEO
Bob
Jordan
said
in
an

earnings
release. “The
recent
news
from
Boeing
regarding
further
aircraft
delivery
delays
presents
significant
challenges
for
both
2024 and
2025.
We
are
reacting
and
replanning
quickly
to
mitigate
the
operational
and
financial
impacts
while
maintaining
dependable
and
reliable
flight
schedules
for
our
Customers.”

The
Dallas-based
carrier
operates
an
all-Boeing
737
fleet
and
is
acutely
affected
by
Boeing’s
aircraft
delays
stemming
from
its
safety
and
quality
crises.

The
carrier
had
previously
warned
that
slower
Boeing
deliveries
were
hampering
its
growth.

Here
is
how
Southwest
performed
in
the
first
quarter
compared
with
Wall
Street
expectations,
according
to
consensus
estimates
from
LSEG:

• 
  Loss
  per
  share: 36
  cents
  adjusted vs.
  an
  expected
  loss
  of
  34
  cents
• 
  Revenue: $6.33
  billion
  vs.
  $6.42
  billion
  expected

Southwest
lost
$231
million,
or
39
cents
a
share,
in
the
first
three
months
of
the
year,
compared
with
a
loss
of
$159
million,
or
27
cents
a
share,
a
year
earlier
when
it
was
dealing
with
the
aftermath
of
its
holiday
meltdown.

Adjusting
for
one-time
items,
including
costs
related
to
labor
contracts
and
fuel,
Southwest
lost
$218
million,
or
36
cents
a
share.

Revenue
rose
almost
11%
to
$6.33
billion,
slightly
below
analysts’
estimates
as
compiled
by
LSEG.

Correction:
Southwest
Airlines
revenue
of
$6.33
billion
came
in
slightly
below
analysts’
estimates
as
compiled
by
LSEG.