Boeing 737 MAX airplanes are seen parked at a Boeing facility on August 13, 2019 in Renton, Washington.
David Ryder | Getty Pictures
Southwest Airways stated Tuesday that it should trim its capability plans and reevaluate its monetary forecasts for the yr, citing supply delays from Boeing, its sole provider of airplanes.
The Dallas-based airline stated Boeing knowledgeable Southwest’s leaders that it ought to anticipate 46 Boeing 737 Max 8 planes this yr, down from 58. Southwest had anticipated Boeing to ship 79 Max planes, together with among the smallest mannequin, the Max 7, which hasn’t but received certification from the Federal Aviation Administration.
Due to the delays, Southwest stated in a submitting that it’s “reevaluating all prior full yr 2024 steerage, together with the expectation for capital spending.”
Southwest’s statements, forward of a JPMorgan business 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 finest prospects.
“Boeing must turn into a greater firm,” Southwest CEO Bob Jordan stated on the convention.
Alaska Airways stated in a submitting Tuesday that its 2024 capability is “in flux resulting from uncertainty across the timing of plane deliveries on account of elevated Federal Aviation Administration and Division of Justice scrutiny on Boeing and its operations.”
Final week, United advised workers that it must pause pilot hiring this spring due to late-arriving plane from Boeing, CNBC reported. Southwest stated it has stopped hiring pilots, flight attendants and different workers this yr and expects to finish 2024 with decrease headcount than final yr.
Southwest shares fell practically 15% Tuesday. The airline stated leisure bookings within the first quarter have been weaker than anticipated and forecast unit income to be flat to up not more than 2% in contrast with a yr earlier, down from a January estimate of an increase of as a lot as 4.5%.
“We’re squarely targeted on implementing modifications to strengthen high quality throughout our manufacturing system and taking the mandatory time to ship prime quality airplanes that meet all regulatory necessities,” Boeing stated in an announcement. “We proceed to remain in shut contact with our valued prospects about these points and our actions to handle them.”
