A Southwest commercial airliner takes off from Las Vegas International Airport, in Las Vegas, Nevada, United States, February 8, 2024.
Mike Blake | Reuters
Southwest Airlines on Thursday posted a wider loss for the first quarter than for the same period last year and warned that Boeing plane delays will hamper its growth until 2025.
The airline plans to increase capacity by 4% this year, compared to a planned 6%. For the second quarter, it forecasts growth of 8% to 9% and a revenue decline of up to 3.5%.
Shares of Southwest fell about 10% in premarket trading.
The airline said in a quarterly statement that it now expects to receive just 20 Boeing 737 Max 8s, down from its previous forecast for 46 of them. The carrier will now delay the retirement of some of its older Boeing planes and cut costs, including by offering voluntary leave to its staff. Southwest said it expects to finish the year with 2,000 fewer employees than at the end of 2023.
and halted operations at some airports, including Syracuse, New York, Bellingham International Airport in Washington, Cozumel International Airport and George Bush Intercontinental Airport in Houston.
“Achieving our financial goals is an immediate imperative,” CEO Bob Jordan said in an earnings release. “Boeing’s recent news of further aircraft delivery delays presents significant challenges for 2024 and 2025. We are responding and planning quickly to mitigate operational and financial impacts while maintaining reliable and reliable flight schedules for our customers.
The Dallas-based carrier operates an all-Boeing 737 fleet and is severely impacted by Boeing aircraft delays due to its safety and quality crises.
The carrier previously warned that Boeing’s slowdown in deliveries was hampering its growth.
Here’s how Southwest performed in the first quarter compared to Wall Street expectations, according to LSEG consensus estimates:
- Loss per share: 36 cents adjusted versus an expected loss of 34 cents
- Income: $6.33 billion versus $6.42 billion expected
Southwest lost $231 million, or 39 cents per share, in the first three months of the year, compared with a loss of $159 million, or 27 cents per share, a year earlier, when it made faced with the consequences of the end-of-year holiday crisis.
Accounting 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 analyst estimates compiled by LSEG.
Correction: Southwest Airlines’ revenue of $6.33 billion fell slightly short of analyst estimates compiled by LSEG.
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