Boeing 737 MAX airplanes are seen parked at a Boeing facility on August 13, 2019 in Renton, Washington.
David Ryder | Getty Photos
Southwest Airways mentioned Tuesday that it must trim its capability plans and reevaluate its monetary forecasts for the 12 months, citing supply delays from Boeing, its sole provider of airplanes.
The Dallas-based airline mentioned Boeing knowledgeable Southwest’s leaders that it ought to count on 46 Boeing 737 Max 8 planes this 12 months, down from 58. Southwest had anticipated Boeing to ship 79 Max planes, together with a few of the smallest mannequin, the Max 7, which hasn’t but received certification from the Federal Aviation Administration.
Due to the delays, Southwest mentioned in a submitting that it’s “reevaluating all prior full 12 months 2024 steering, together with the expectation for capital spending.”
Southwest’s statements, forward of a JPMorgan trade convention on Tuesday, are the newest signal of how Boeing’s high quality management disaster and manufacturing issues — each earlier than and after a door plug blew out of an Alaska Airways flight in January — are weighing on a few of its greatest clients.
“All of us want Boeing to be higher,” Southwest CEO Bob Jordan mentioned on the convention.
Alaska Airways mentioned in a submitting Tuesday that its 2024 capability is “in flux resulting from uncertainty across the timing of plane deliveries because of elevated Federal Aviation Administration and Division of Justice scrutiny on Boeing and its operations.”
Final week, United informed employees that it must pause pilot hiring this spring due to late-arriving plane from Boeing, CNBC reported. Southwest mentioned it has stopped hiring pilots, flight attendants and different staff this 12 months and expects to finish 2024 with decrease headcount than final 12 months.
Southwest shares had been down greater than 12% in morning buying and selling. The airline mentioned leisure bookings within the first quarter had been weaker than anticipated and forecast unit income to be flat to up not more than 2% in contrast with a 12 months earlier, down from a January estimate of an increase of as a lot as 4.5%.
Boeing did not instantly reply to a request for remark.
