A Southwest airliner takes off from Las Vegas International Airport in Las Vegas, Nevada, U.S., February 8, 2024.
MikeBlake | Reuters
Southwest Airlines on Thursday reported a larger first-quarter loss than in the same period last year and warned about it Boeing aircraft delays will hamper its development until 2025.
The airline expects to augment capacity by 4% this year, compared with a plan to augment it by 6%. In the second quarter, it forecast growth of 8% to 9%, and revenues fell by as much as 3.5%.
Southwest shares fell about 10% in pre-market trading.
The airline said in a quarterly report that it now expects to receive only 20 Boeing 737 Max 8 planes, down from its previous forecast of 46. The carrier will now delay the retirement of some of Boeing’s older planes and cut costs, including offering employees voluntary leave. Southwest said it expects to end the year with 2,000 fewer employees than at the end of 2023.
It will also suspend operations at some airports, including Syracuse, Novel York, Bellingham International Airport in Washington, Cozumel International Airport and George Bush Intercontinental in Houston.
“Achieving our financial goals is an immediate imperative,” CEO Bob Jordan said in a statement profit release. “Recent news from Boeing regarding further aircraft delivery delays creates significant challenges for both 2024 and 2025. We are rapidly responding and re-planning to mitigate the operational and financial impacts while maintaining reliable and dependable flight schedules for our customers.”
The Dallas-based carrier operates an all-Boeing 737 fleet and is severely impacted by Boeing aircraft delays resulting from safety and quality crises.
The carrier has previously warned that slower Boeing deliveries are hampering its growth.
According to the LSEG consensus, here are Southwest’s first-quarter results compared to Wall Street expectations:
- Loss per share: 36 cents adjusted against an expected loss of 34 cents
- Income: $6.33 billion against the expected $6.42 billion
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 as it grappled with the fallout from the holiday crash.
After accounting for non-recurring items, including labor contract costs and fuel, Southwest lost $218 million, or 36 cents per share.
Revenue rose nearly 11% to $6.33 billion, slightly below analyst estimates from LSEG.
Correction: Southwest Airlines’ revenue of $6.33 billion was slightly below analyst estimates by LSEG.
