Southwest Airlines has announced that it will cease operations at four airports due to delays in the delivery of jets from Boeing. The affected airports are Bellingham International Airport in Washington state, Cozumel International Airport in Mexico, Syracuse Hancock International Airport in New York, and Houston’s George Bush Intercontinental Airport. Southwest will continue to serve Houston’s other airport.
Southwest CEO Bob Jordan stated that the recent news from Boeing regarding further aircraft delivery delays poses significant challenges for the years 2024 and 2025. As a result, the airline has made the tough decision to close its operations at the four aforementioned airports.
In the first quarter, Southwest reported a loss of $218 million, despite recording record revenue of $6.3 billion, up 11% from the previous year. The increase in revenue was attributed to a rise in passenger traffic, with fare data indicating consistent pricing for passengers.
Boeing's ongoing issues, including the grounding of the Max 9 and delays in certifying new models, have impacted Southwest's operations. The airline has adjusted its order book, reducing its 737 Max 7 orders and shifting to 737 Max 8 jets instead.
Southwest anticipates a 4% growth in capacity this year, down from the initial estimate of 6%. This adjustment is expected to increase costs by about 2 percentage points. The airline has also implemented a hiring freeze for pilots and flight attendants due to the reduced plane deliveries from Boeing.
United Airlines has also halted pilot hiring due to Boeing delivery issues, while American Airlines reported a first-quarter loss of $226 million. American's revenue increased by 3%, despite a decrease in passenger payment per mile, offset by a rise in miles flown.
Shares of Southwest dropped by 7% in premarket trading following the announcement, while American Airlines saw a nearly 4% increase in its shares.
