Southwest Airlines on Thursday reported a wider loss for the primary quarter than in the identical period last 12 months and warned against it Boeings Airplane delays will hinder growth until 2025.
The airline expects to extend capability by 4% this 12 months, in comparison with a 6% expansion planned. Growth of 8 to 9% and a decline in sales of as much as 3.5% were forecast for the second quarter.
Shares of Southwest fell greater than 8% in afternoon trading.
The airline said in a quarterly filing that it now expects to deliver just 20 Boeing 737 Max 8 planes, down from 46 previously forecast. The airline will now delay the retirement of a few of its older Boeing aircraft and cut costs, including by offering employees voluntary break day. Southwest said it expects to finish the 12 months with 2,000 fewer employees than at the tip of 2023.
Some airports are suspending operations, including in Syracuse, New York; Bellingham International Airport in Washington; Cozumel International Airport; and Houston’s George Bush Intercontinental. The airline can also be reducing service in Atlanta and Chicago O’Hare International Airport.
“Achieving our financial goals is an immediate imperative,” CEO Bob Jordan said in a press release Results publication. “Recent news from Boeing of further aircraft delivery delays presents significant challenges for both 2024 and 2025. We are responding and planning quickly to mitigate the operational and financial impacts while maintaining reliable and reliable flight schedules for our customers.”
The Dallas-based airline operates an all-Boeing 737 fleet and has been hit hard by Boeing aircraft delays stemming from safety and quality crises.
The airline had previously warned that slower Boeing deliveries would hinder its growth.
Southwest isn’t only rethinking its network, but additionally its business model. Jordan told CNBC that the airline may cast off the one-class cabin and open seating. While he said no decisions have been made yet, it could represent an enormous change in the best way big rivals prefer it United And delta are reporting strong sales growth in premium seats.
According to LSEG consensus estimates, Southwest performed as follows in the primary quarter in comparison with Wall Street expectations:
- Loss per share: 36 cents adjusted versus an expected lack of 34 cents
- Revenue: $6.33 billion versus expected $6.42 billion
Southwest lost $231 million, or 39 cents per share, in the primary three months of the 12 months, compared with a lack of $159 million, or 27 cents per share, a 12 months earlier as the corporate struggled with the fallout from the vacation crisis .
Adjusted for one-time items, including costs related to labor contracts and fuel, Southwest lost $218 million, or 36 cents per share.
Revenue rose nearly 11% to $6.33 billion, barely below analyst estimates compiled by LSEG.
Correction: Southwest Airlines’ revenue of $6.33 billion was barely below analyst estimates compiled by LSEG.
