Southwest Airlines exits multiple airports as Boeing troubles weigh
Southwest Airlines is also limiting hiring in 2024
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Southwest Airlines announced Thursday that the carrier is pulling out of several airports as it contends with financial fallout from Boeing delays.
CEO Bob Jordan warned in Southwest's latest earnings report that the carrier has intensified its network optimization efforts to address underperforming markets.
As a result of these efforts, the Texas-based carrier is closing operations at Houston's George Bush Intercontinental Airport in Houston, the Bellingham International Airport in Washington, the Cozumel International Airport in Mexico and the Syracuse Hancock International Airport in New York.
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Jordan placed some of the blame on Boeing's manufacturing delays, stating that "the recent news from Boeing regarding further aircraft delivery delays presents significant challenges for both 2024 and 2025."
A Southwest Airlines passenger flight takes off from San Diego International Airport in San Diego on Feb. 3, 2023. (REUTERS/Mike Blake/File Photo / Reuters Photos)
While he said it was disappointing to incur a loss in the quarter, the chief executive added that the company is "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."
Southwest reported a loss of $231 million, or 39 cents a share, for the quarter.
Southwest is the latest carrier to face setbacks due to Boeing. In early March, United Airlines announced it was temporarily pausing pilot hiring due to new aircraft certification and manufacturing delays at Boeing. It also recently asked pilots to take unpaid time off as delays persist.
The Federal Aviation Administration (FAA) ramped up oversight of Boeing and its supplier Spirit AeroSystems in recent months, which included halting production expansion of the Max after a door plug blew out mid-flight on one of Alaska Airlines' Max 9 jets in early January.
BOEING'S TIP LINE SUBMISSIONS WERE UP 500% ON THE YEAR DURING THE FIRST QUARTER
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| LUV | SOUTHWEST AIRLINES CO. | 26.15 | -0.27 | -1.02% |
Jordan said Southwest is re-planning quickly in order "to mitigate the operational and financial impacts while maintaining dependable and reliable flight schedules" for customers.
A general view of a Southwest Airlines jet photographed at LaGuardia Airport in the Queens borough of New York City on Feb. 4. (Bruce Bennett/Getty Images / Getty Images)
The company is also implementing other cost control initiatives, such as limiting hiring and offering voluntary time off programs, according to Jordan.
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The company expects to end the year with 2,000 fewer employees compared with the end of 2023.