A Southwest Airlines commercial airliner took off from Las Vegas on February 8, 2024.
Mike Black | Reuters
Southwest Airlines It reported a wider first-quarter loss on Thursday than a year earlier and warned that Boeing’s Plane delays will hamper its growth through 2025.
The airline expects capacity to grow by 4% this year, down from its original plan of 6%. The company forecast second-quarter growth of 8% to 9% and said revenue would fall as much as 3.5%.
Southwest Airlines shares fell about 10% in premarket trading.
The airline said in its quarterly report that it now expects to take delivery of just 20 Boeing 737 Max 8 aircraft, down from its previous forecast of 46. The airline will now delay the retirement of some older Boeing aircraft and cut costs, including offering voluntary leave for employees. Southwest Airlines said it expects to have 2,000 fewer employees at the end of this year than at the end of 2023.
It will also shut down operations at some airports, including Syracuse Airport in New York state; Bellingham International Airport in Washington state; Cozumel International Airport; and the George Bush Intercontinental Hotel in Houston.
“Achieving our financial goals is a top priority,” Chief Executive Bob Jordan said in a statement. earnings release. “Boeing’s recent news of further aircraft delivery delays creates significant challenges in 2024 and 2025. We are reacting quickly and replanning to mitigate the operational and financial impact while maintaining reliable reliability for our customers. Flight schedule.
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 has previously warned that a slowdown in Boeing deliveries was hampering its growth.
Here’s how Southwest’s first-quarter performance compared to Wall Street expectations, according to consensus forecasts from London Stock Exchange Group (LSEG):
- Loss per share: Adjusted 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 the fallout from the holiday crisis.
After adjusting 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, slightly below analysts’ expectations compiled by LSEG.
Correction: Southwest Airlines’ revenue of $6.33 billion was slightly below analysts’ expectations compiled by LSEG.
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