Southwest Airlines cuts capability, and rethinks 2024 financial forecast, citing Boeing problems

Southwest Airlines said Tuesday that it should must trim its capability plans and reevaluate its financial forecasts for the 12 months, citing delivery delays from Boeing, its sole supplier of airplanes.

The Dallas-based airline said Boeing informed Southwest’s leaders that it should expect 46 Boeing 737 Max 8 planes this 12 months, down from 58. Southwest had expected Boeing to deliver 79 Max planes, including a number of the smallest model, the Max 7, which hasn’t yet won certification from the Federal Aviation Administration.

Due to the delays, Southwest said in a filing that it’s “reevaluating all prior full 12 months 2024 guidance, including the expectation for capital spending.”

Southwest’s statements, ahead of a JPMorgan industry conference on Tuesday, are the newest sign of how Boeing’s quality control crisis and production problems — each before and after a door plug blew out of an Alaska Airlines flight in January — are weighing on a few of its best customers.

Alaska Airlines said in a filing Tuesday that its 2024 capability is “in flux attributable to uncertainty across the timing of aircraft deliveries in consequence of increased Federal Aviation Administration and Department of Justice scrutiny on Boeing and its operations.”

Last week, United told staff that it might must pause pilot hiring this spring due to late-arriving aircraft from Boeing, CNBC reported. Southwest said it has stopped hiring pilots, flight attendants and other employees this 12 months and expects to finish 2024 with lower headcount than last 12 months.

Southwest shares were down greater than 12% in morning trading. The airline said leisure bookings in the primary quarter were weaker than expected and forecast unit revenue to be flat to up not more than 2% compared with a 12 months earlier, down from a January estimate of an increase of as much as 4.5%.

Boeing didn’t immediately reply to a request for comment.