Boeing 737 MAX aircraft parked at a Boeing facility on August 13, 2019 in Renton, Washington.
David Ryder | Getty Images
Southwest Airlines said on Tuesday it will need to cut capacity plans and reassess its financial forecasts for this yr, citing supply delays from Boeingits exclusive aircraft supplier.
The Dallas-based airline said Boeing told Southwest leaders it should expect 46 Boeing 737 Max 8 planes this yr, up from 58. Southwest expected Boeing to deliver 79 Max planes, including among the smallest Max models 7, which has not yet earned Federal Aviation Administration certification.
Due to the delays, Southwest said in its filing that it is “re-evaluating all prior guidance for full year 2024, including capital spending expectations.”
Southwest’s statements ahead of Tuesday’s JPMorgan industry conference are the newest sign of how Boeing’s quality control crisis and production woes – each before and after blowing the plug on the door Alaska Airlines flight in January – charging a few of his best customers.
“Boeing must become a better company,” Southwest CEO Bob Jordan said on the conference.
Alaska Airlines – he stated in his application on Tuesday that its 2024 capacity “is in flux due to uncertainty around the aircraft delivery schedule as a result of increased scrutiny of Boeing and its operations by the Federal Aviation Administration and the Department of Justice.”
Last week, United told employees it will need to stop hiring pilots within the spring because Boeing planes were delayed, CNBC reported. Southwest said it stopped hiring pilots, flight attendants and other employees this yr and expects 2024 to finish with lower employment levels than last yr.
Southwest shares fell nearly 15% on Tuesday. The airline said leisure bookings in the primary quarter were weaker than expected and forecast unit revenues can be flat and up not more than 2% from a yr earlier, compared with January estimates of growth as much as by 4.5%.
“Our primary focus is on implementing changes to improve quality throughout our production system and taking the necessary time to deliver high-quality aircraft that meet all regulatory requirements,” Boeing said in an announcement. “We continue to remain in close contact with our valued customers regarding these issues and our actions to resolve them.”
