Southwest Airlines reported declining quarterly earnings Thursday and said they will stop service at Syracuse Hancock International Airport in upstate New York, Bellingham International Airport in Washington state, Cozumel International Airport in Mexico, and George Bush Intercontinental in Houston. Meanwhile, they plan to scale back service at two other major hubs, Atlanta’s Hartsfield-Jackson International and Chicago’s O’Hare International.
CEO Bob Jordan said in an earnings release that the problems at Boeing have hurt the bottom line:
Achieving our financial goals is an immediate imperative.
The recent news from Boeing regarding further aircraft delivery delays presents significant challenges for both 2024 and 2025. We are reacting and replanning quickly to mitigate the operational and financial impacts while maintaining dependable and reliable flight schedules for our Customers.
He also said in an interview with CNBC that the company plans to shed at least 2,000 jobs:
Reporter: You’ve done a lot of hiring, especially as you planned on having a number of planes being flown, [and] pilots. Have you put a pause on that?
Jordan: We did. Yeah, we were aiming at—in a lot of cases you aim a year out, particularly with pilots—where we were aiming at where we thought our aircraft and our fleet plan would be a year from now. Obviously that’s changed. We have stopped and frozen nearly all hiring. We have voluntary programs underway, and we expect to end 2024 [with] 2,000 heads below 2023, and we’ll be down again in 2025 through our voluntary time off programs right now. We’re already seeing nearly 1,000 employees take those programs.
Watch:
Southwest Airlines on Thursday posted a wider loss for the first quarter than the same period last year and warned that Boeing’s airplane delays will hamper its growth into 2025.https://t.co/RTHLwDsq6N pic.twitter.com/WxdgCH8sFO
— CNBC (@CNBC) April 25, 2024
Southwest reported a loss of $231 million, or 39 cents a share, for the quarter, while its stock price dropped seven percent Thursday after the news.
Safety concerns have given Boeing a giant headache recently, causing not only Southwest to feel the pain but other airlines as well:
Southwest is the latest carrier to face setbacks due to Boeing. In early March, United Airlines announced it was temporarily pausing pilot hiring due to new aircraft certification and manufacturing delays at Boeing. It also recently asked pilots to take unpaid time off as delays persist.
The Federal Aviation Administration (FAA) ramped up oversight of Boeing and its supplier Spirit AeroSystems in recent months, which included halting production expansion of the Max after a door plug blew out mid-flight on one of Alaska Airlines’ Max 9 jets in early January.
The problems have dominated headlines:
Related:
Boeing Engineer: ‘I Was Told, Frankly, to Shut Up.’
Boeing Whistleblower Claims 787 Could Fall Apart and ‘Drop to the Ground,’ Wouldn’t Put His Family on One
Boeing Stocks Continue to Fall After Engineer Reports Shoddy Work – Can They Recover, or Are They Doomed?
It’s unclear if the storied aerospace company can recover quickly from this spate of problems, but their CEO is stepping down at the end of the year in a management shakeup. Perhaps they can eventually reclaim their status as a revered American corporation, but in the meantime they need to solve their safety issues.
More Boeing:
Boeing Whistleblower Found Dead in Truck With ‘Self-Inflicted’ Gunshot Wound
