Southwest Airlines rethinks 2024 financial forecast due to Boeing woes

A Southwest airlines plane lands at Sarasota International Airport in Sarasota, Fla., on Monday, February 9, 2024 (AP Photo/Gene J. Puskar)
A Southwest airlines plane lands at Sarasota International Airport in Sarasota, Fla., on Monday, February 9, 2024 (AP Photo/Gene J. Puskar) Copyright GJP/Copyright 2024 The AP, All Rights Reserved
Copyright GJP/Copyright 2024 The AP, All Rights Reserved
By Indrabati Lahiri
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Boeing’s aircraft delivery delays have caused a number of airlines to revise their capacity forecasts for 2024, as well as pause hiring.


It looks like Boeing’s saga may be far from over yet, following a door panel blowing out mid-air on an Alaska Airlines flight in January. 

Now, one of the biggest airlines in the US, Southwest Airlines, has revealed that it would be slashing capacity forecasts and rethinking its 2024 financial forecast, on the back of more Boeing delivery delays.

This was after Boeing said that it would only be able to provide Southwest Airlines with 46 Boeing 737 Max 8 aeroplanes in 2024, having previously committed to 58 aircraft.

Originally, Boeing was meant to deliver 79 Max planes to Southwest, which was also supposed to include the Max 7 models. However, the Max 7 models have still not received Federal Aviation Administration (FAA) certification.

“As a result of Boeing’s continued challenges, the company expects the delivery schedule to be fluid and, therefore, plans to reduce capacity and re-optimize schedules, primarily for the back half of 2024, which will likely result in at least a one point reduction to the company’s full year 2024 capacity plans on a year-over-year basis,” Southwest Airlines said in a statement on Tuesday.

“As a result, the company is also reevaluating all prior full year 2024 guidance, including the expectation for capital spending, and plans to provide updated full year 2024 guidance in conjunction with the reporting of its first quarter 2024 financial results on 25 April 2024,” the company added.

Southwest has also highlighted that it forecasts a net loss for the first quarter of the fiscal year due to the above challenges, as well as downbeat leisure bookings.

It has also had to stop hiring for several work groups, including flight attendants and pilots, with the company expecting headcount to be lower at the end of the year.

Boeing faces increasing airline frustration with delivery delays

However, Southwest is hardly the only airline facing this issue right now. Recently, Alaska Airlines revealed that its capacity has also been impacted due to Boeing’s aircraft groundings.

“As a result of Flight 1282 and the Boeing 737-9 Max grounding, our profitability was negatively impacted by at least $150 million,” the company said in a statement released on 12 March. “Full-year capacity expectations are still in flux due to uncertainty around the timing of aircraft deliveries as a result of increased Federal Aviation Administration and Department of Justice scrutiny on Boeing and its operations.”

United Airlines has also announced that it would have to stop hiring pilots this spring due to this.

Boeing’s president and CEO, Stan Deal said in a statement, “We have let down our airline customers and are deeply sorry for the significant disruption to them, their employees and their passengers.”

“We are taking action on a comprehensive plan to bring these airplanes safely back to service and to improve our quality and delivery performance,” he added. “We will follow the lead of the FAA and support our customers every step of the way.

On March 12, a Boeing whistleblower, John Barnett, who had revealed a number of production issues with Boeing and was also involved in a whistleblower lawsuit with the company was found dead in South Carolina. 

Although the death was reported to stem from a “self-inflicted wound”, this news is still likely to add significantly to the company’s plummeting reputation in the market.

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