Southwest Airlines announced on Tuesday its decision to adjust its capacity plans and revisit its financial projections for the year, attributing the need for these revisions to delivery delays from Boeing, its exclusive airplane provider.
The Dallas-headquartered airline disclosed that Boeing has set the delivery count for the Boeing 737 Max 8 planes at 46 for this year, a reduction from the initially expected 58. Southwest’s original plan anticipated the receipt of 79 Max planes, including models of the smaller Max 7, which is pending certification by the Federal Aviation Administration.
Southwest Puts Blame on Boeing's Shoulders
In response to these delays, Southwest indicated in a regulatory filing that it is reassessing its full-year 2024 guidance, which encompasses capital expenditure forecasts.
The airline’s announcement, made in anticipation of a JPMorgan industry conference, underscores the ongoing challenges Boeing faces with quality control and production issues. These difficulties have persisted both prior to and following an incident in January when a door plug detached during an Alaska Airlines flight.
Southwest CEO Bob Jordan, speaking at the conference, expressed the need for improvement at Boeing, stating, “Boeing needs to become a better company.”
Delivery Uncertainties Lead Alaska Airlines to Reassess 2024 Capacity, United to Halt Pilot Hires
Similarly, Alaska Airlines reported on Tuesday that its capacity outlook for 2024 remains uncertain. This uncertainty is linked to potential delays in aircraft deliveries, which are now under heightened scrutiny from the Federal Aviation Administration and the Department of Justice in their review of Boeing’s operations.
Furthermore, CNBC recently reported that United Airlines has communicated to its staff a temporary halt in pilot recruitment this spring due to delayed aircraft deliveries from Boeing. Echoing this sentiment, Southwest has paused the hiring of pilots, flight attendants, and other personnel for the current year, anticipating a reduction in its workforce by the end of 2024 compared to the previous year.
In its defense, Boeing issued a statement asserting its dedication to enhancing quality control throughout its production system. The statement highlighted the company’s commitment to taking the necessary measures to ensure the delivery of high-quality airplanes that comply with all regulatory standards. Boeing also mentioned its ongoing engagement with valued customers regarding these challenges and the steps being taken to address them.