Southwest Airlines On Thursday, it posted a wider loss in the first quarter than in the same period last year and warned that Boeing Delays in the aircraft will halt its development in 2025.
The airline expects capacity to grow by 4 percent this year, down from a projected 6 percent increase. For the second quarter, it forecast growth of 8% to 9% and said revenue would decline by 3.5%.
Shares of Southwest were down more than 9 percent Thursday afternoon, near a five-month low.
The airline said in a quarterly filing that it now expects to receive just 20 Boeing 737 Max 8 planes, down from its previous forecast of 46. The carrier will now delay retiring some of its older Boeing planes and is cutting costs, including by offering crews to volunteer time off. Southwest said it expects to end the year with 2,000 fewer employees than it did at the end of 2023.
It will cease operations at some airports, including in Syracuse, New York; Bellingham International Airport in Washington; Cozumel International Airport; and Houston’s George Bush Intercontinental. The carrier is also dropping service to Atlanta and Chicago O’Hare International Airport.
“Achieving our financial goals is imperative,” CEO Bob Jordan said in a statement. Release of income. “Recent news regarding Boeing delaying further aircraft deliveries presents significant challenges for both 2024 and 2025. We will continue to manage the operational and financial impacts while maintaining reliable and dependable flight schedules for our customers. are reacting quickly and re-planning to reduce
The Dallas-based carrier operates an all-Boeing 737 fleet and has been hit hard by the safety and quality crisis caused by Boeing’s plane delays.
The carrier previously warned that Boeing’s slow deliveries were holding back its growth.
Southwest is rethinking not only its network, but also its business model. The airline may eliminate its single-class cabin and open seating, Jordan told CNBC. Although he said no decision had been made, it would be a massive change, similar to major rivals united And Delta Following strong revenue growth for premium seats.
According to LSEG consensus estimates, Southwest’s performance in the first quarter compared to Wall Street expectations is:
- Loss per share: 36 cents adjusted. vs. an expected loss of 34 cents
- Income: $6.33 billion vs. $6.42 billion expected
Southwest lost $231 million, or 39 cents a share, in the first three months of the year, compared with a loss of $159 million, or 27 cents a share, a year ago when it lost its holiday meltdown. I was coping.
Adjusting for one-time items, including costs related to labor contracts and fuel, Southwest lost $218 million, or 36 cents per share.
Revenue rose about 11 percent to $6.33 billion, slightly below analyst estimates compiled by LSEG.
Correction: Southwest Airlines revenue of $6.33 billion was slightly below analysts’ estimates compiled by LSEG.
Credit : www.cnbc.com
