A Southwest commercial airliner takes off from Las Vegas International Airport in Las Vegas, Nevada, U.S., February 8, 2024.
Mike Blake | Reuters
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 an quarterly filing that it now expects to receive only 20 Boeing 737 Max 8 planes, down from its previous forecast for 46 of them. It will also delay retiring some of its older planes; cut costs, including offering staff voluntary time-off; and 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 impacted 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.
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 ahead of analysts’ estimates as compiled by LSEG.
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