- It’s not just about Boeing. Airlines are also suffering heavy losses.
- Southwest Airlines and American Airlines reported losses in the first quarter of 2024.
- Southwest CEO Bob Jordan said Boeing’s plane delivery delays “are very painful.”
Boeing is not the only company grappling with turmoil in the aviation sector.
On Thursday, Southwest Airlines and American Airlines reported losses during their quarterly earnings call.
Southwest Airlines announced it would cease flights to four airports – Bellingham International Airport, Cozumel International Airport, George Bush Intercontinental Airport and Syracuse Hancock International Airport – starting in early August after a loss of $231 million in the first quarter of 2024.
Southwest Airlines CEO Bob Jordan told CNBC that the decision to stop flights had “nothing to do” with Boeing’s plane delivery delays. But the delays, Jordan said, hurt Southwest in other ways.
“Now the Boeing delays are very painful. They force us to reschedule, they hurt us revenue-wise, they make us inefficient, and we are working on all of that,” he told CNBC on Thursday.
In addition to cutting flights, Southwest also announced it would cut hiring. The airline said it expects to end this year with about 2,000 fewer employees than at the end of 2023.
American Airlines, meanwhile, posted a first-quarter loss of $312 million amid rising labor costs.
American Airlines CEO Robert Isom told CNBC on Thursday that although Boeing would receive about seven fewer planes due to the delays, the capacity reduction would not have a “material impact” on the airline.
But Isom expressed disappointment with Boeing during his company’s earnings conference call.
“I’ve talked to everyone at Boeing that I could possibly talk to and the message is the same: Get your act together,” Isom told investors Thursday.
When asked about Isom’s remarks, Boeing drew BI’s attention to a comment made by its CFO Brian West on March 20 at the Bank of America’s Global Industries Conference. West then told conference attendees that Boeing was “in regular and very transparent communication” with its customers.
“The most important thing we do is communicate with them. And they’ve been supportive of everything we’re trying to do to improve the safety and quality of the industry,” West said.
Representatives for Southwest Airlines and American Airlines did not immediately respond to a BI request for comment sent outside of normal business hours.
Boeing has recently come under fire following repeated failures in quality controls. On January 5, a plug door flew off a two-month-old Boeing 737 Max 9 during an Alaskan Airlines flight from Oregon to California.
Boeing said during its earnings conference call on Wednesday that it burned through $3.9 billion in cash in the first quarter of 2024. The company also reported a net loss of $355 million in its most recent quarter .
“In the short term, yes, we are facing difficult times,” Boeing CEO Dave Calhoun said in a letter to employees the same day.
“A drop in deliveries can be difficult for our customers and for our finances. But safety and quality must and will come first,” he continued.
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