Southwest Airlines It reported and warned of a wider first-quarter loss on Thursday than a year ago Boeing’s Plane delays will hamper its growth by 2025.
The airline expects capacity growth of 4% this year, down from the 6% originally planned. The company forecast second-quarter growth of 8% to 9% and said revenue would fall as much as 3.5%.
Shares of Southwest Airlines fell more than 8% in afternoon trading.
The airline said in its quarterly report that it now expects to take delivery of just 20 Boeing 737 Max 8 planes, down from 46 previously forecast. The airline will now delay the retirement of some older Boeing aircraft and cut costs, including offering voluntary furloughs for employees. Southwest Airlines said it expects to have 2,000 fewer workers at the end of this year than at the end of 2023.
It will also cease operations at Syracuse, Washington’s Bellingham International Airport and Houston’s George Bush Intercontinental Airport; The airline also reduced service to Atlanta and Chicago O’Hare International Airport.
“Achieving our financial goals is a top priority,” Chief Executive Bob Jordan said in a statement. Release of earnings. “Boeing’s news of further aircraft delivery delays poses significant challenges in 2024 and 2025. We are responding quickly to minimize operational and financial impact while maintaining reliable service for our customers.”
The Dallas-based airline operates an all-Boeing 737 fleet and has been hit hard by delays on Boeing planes amid safety and quality crises.
The airline had previously warned that a slowdown in Boeing deliveries was hampering its growth.
Southwest Airlines is rethinking not only its network but also its business model. Jordan told CNBC that the airline may abandon single cabins and open seats. Although he said no decisions have been made yet, it would be a big change, much like its bigger rivals. unity And Delta Premium seat revenue increased strongly.
Here’s how Southwest’s first-quarter performance compared to Wall Street expectations, according to London Stock Exchange Group (LSEG) consensus forecasts:
- Loss per share: Adjusted to 36 cents Compared to an expected loss of 34 cents
- Income: $6.33 billion vs $6.42 billion expected
Southwest lost $231 million, or 39 cents a share, in the first three months of this year, compared with a loss of $159 million, or 27 cents a share, in the same period last year as it dealt with fallout from the holiday crisis.
After adjusting for one-time items, including labor contract and fuel-related costs, Southwest lost $218 million, or 36 cents per share.
Revenue rose about 11% to $6.33 billion, slightly below analysts’ expectations compiled by LSEG.
Correction: Southwest Airlines’ revenue of $6.33 billion was slightly below analysts’ expectations compiled by LSEG.
Tags: Southwest Airlines cuts growth plans warns impact Boeing plane delays
