Southwest Airlines is cutting operations at four airports, including Bellingham International Airport, after losing $231 million in the first quarter.
On Thursday, the Dallas-based airline reported lower expectations for revenue to be down as much 3.5% and capacity growth is estimated to grow 4%, previously 6%. It’s also anticipating aircraft seats available and trip frequency to decline in the third and fourth quarters of 2024.
On Aug. 4, the airline will also cease operations at Bellingham International Airport, Cozumel International Airport, Houston’s George Bush Intercontinental Airport and Syracuse Hancock International Airport. It’s also implementing capacity reductions in both Hartsfield-Jackson Atlanta International Airport and Chicago O’Hare International Airport.
“While it is disappointing to incur a first quarter loss, we exited the quarter with healthy profits and margins in the month of March,” said Bob Jordan, CEO of Southwest in a release. “We are focused on controlling what we can control and have already taken swift action to address our financial underperformance and adjust for revised aircraft delivery expectations. I want to thank our more than 74,000 employees…as we adapt to aircraft delivery constraints and adjust to slower than planned growth for this year and next.”
The airline is implementing “cost control initiatives,” which include limiting hiring and offering voluntary time off. It expects to end the year with 2,000 less employees compared to the end of 2023.
Southwest has also lowered its expectations for aircraft deliveries from plane maker Boeing Co., where it now it expects 20 Boeing 737 Max 8 aircraft deliveries in 2024, when it previously anticipated 46. In March, a regulatory filing reported the airline lowered its expectations to 46, from previously 79.
“Achieving our financial goals is an immediate imperative,” Jordan said. “The recent news from Boeing regarding further aircraft delivery delays presents significant challenges for both 2024 and 2025.”
The delay in deliveries follow a series of safety issues plaguing the airplane manufacturer, such as January’s Boeing 737 Max 9 blowout that left a gaping hole in the side of an Alaska Airlines fuselage. The incident continues to make headlines, and the Federal Aviation Administration opened a formal investigation into Boeing.
Boeing and Southwest entered a supplemental agreement relating to its order for Max 7 and Max 8 aircraft. It’s subject to change based on ongoing discussions with the plane manufacturer.
Boeing has been under fire by U.S. airlines to “become a better company,” as Jordan said last month during the JPMorgan Industrials Conference. Airlines like Fort Worth-based American Airlines have also called out the plane maker.
Southwest also ratified an agreement with its flight attendants this week, the first major airline to do so. The airline has ratified 11 labor deals since Oct. 2022.
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