Southwest Airlines is reducing its hiring targets for this yr due to delays in recent aircraft from Boeing, the carrier’s CEO Bob Jordan said Thursday.
The Dallas-based airline expects to receive just 70 recent 737 Max planes from Boeing this yr, down from a previous forecast of 90, which can reduce its capability growth plans by one percentage point, Southwest said in quarterly filing.
Southwest is one in every of Boeing’s best customers and operates a fleet of all 737s. It has orders for 564 Boeing 737 Max planes through the top of the last decade, in keeping with the quarterly report. Those aircraft are more fuel-efficient and can each replace older jets and help the corporate grow.
Jordan told CNBC’s “Squawk on the Street” following its quarterly report that the corporate planned so as to add a net 7,000 people to its staff this yr, but will now need to “moderate” its targets.
The corporate didn’t reply to a request to elaborate on how much it is going to need to cut back its hiring plans.
Boeing employees sign a banner in front of a 737 MAX 8 produced for Southwest Airlines as Boeing celebrates the ten,000th 737 to return off the production line in Renton, Washington, U.S. March 13, 2018.
REUTERS/Jason Redmond
Jordan said the corporate is attempting to be “prudent” about its expectations for deliveries, which have repeatedly been delayed.
“You propose way upfront to set your schedules, to set your capability, and also you’re improper. It’s just really difficult to alter that close in,” Jordan told CNBC’s Phil LeBeau within the interview.
The carrier plans to cut back flight plans in the previous few months of the yr due to the delays, COO Andrew Watterson said on the quarterly call on Thursday.
On Wednesday, Boeing said it plans to ramp up output of 737 Max planes to 38 a month this yr from a current rate of about 31 a month, a long-planned increase that was delayed by supply chain problems and labor shortages.
American Airlines CEO Robert Isom also complained about delivery delays when the rival airline reported quarterly results on Thursday.
“When it comes to the aircraft manufacturers, each Boeing and Airbus, they need to do a greater job,” Isom said in an interview with CNBC’s “Squawk Box” following that report. “After we don’t receive a delivery on time, guess what? We’re going out and having to cancel flights. That affects 1000’s of shoppers.”
“We have to carry them accountable,” Isom said.
