Southwest takes new measures as growth expected to slow down

Southwest takes new measures as growth expected to slow down
The airline reported losses of $231mn in the first quarter of 2024 (Image credit: Carlos Yudica/Adobe Stock)

US carrier Southwest Airlines is expected to slow its growth as the airline tackles “significant challenges” after facing losses in addition to delays in their Boeing 737 deliveries.

Only 20 737 MAX 8 aircraft are set to be delivered to the airline this year – a significant reduction from the originally planned 46.

Southwest has already limited the hiring of new pilots and cabin crew and will take further steps by removing Cozumel, Syracuse, Bellingham and Houston-George Bush Intercontinental airports from its network.

It will also offer voluntary time off to its staff and said it expects to end the year with 2,000 fewer employees than 2023.

The airline incurred a loss of US$231mn in the first quarter of 2024. CEO Bob Jordan stated the result was “disappointing”.

He said: “We are 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.”

But, according to the CEO, a slower growth rate is necessary to adapt to the aircraft delivery constraints brought on by the ongoing crisis at Boeing.

Jordan added: “The recent news from Boeing regarding further aircraft delivery delays presents significant challenges for both 2024 and 2025.

“We are reacting and replanning quickly to mitigate the operational and financial impacts while maintaining dependable and reliable flight schedules for our customers.”

Receiving fewer aircraft than planned means Southwest will now reduce the number of aircraft it will retire this year, down to 35 from the planned 49 planes.

The airline also said it still has no assurances from Boeing regarding the delivery of the 737 MAX 7, with the certification of the type and entry into service still dependent on the Federal Aviation Administration’s approval.