Southwest Airlines cuts capacity, pauses hiring due to Boeing 'challenges'
United Airlines said it will also slow the pace of hiring in 2024 due to Boeing complications
Is it time for Boeing CEO Dave Calhoun to move on?
Barron's senior writer Al Root joins 'Barron's Roundtable' to discuss the latest in Boeing's stock price and what to expect from the company in 2024.
Southwest Airlines is cutting capacity, re-optimizing flight schedules and pausing hiring in 2024 as a result of Boeing's "continued challenges."
Boeing told Southwest to expect the delivery of 46 Max 8s this year, down from the airplane maker’s previously expected 58, according to a regulatory filing. Southwest expected Boeing to deliver 79 Max jets in total, including some of the smaller Max 7 variants, which are not yet certified by the Federal Aviation Administration.
Southwest doesn't expect Max 7s will be "placed into service this year based on the current certification status."
DELTA CEO SAYS BOEING, AIRBUS ARE CRITICAL PARTNERS
As a result, the company is planning to reduce capacity and change schedules primarily in the second half of the year, "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," according to the filing.
A Southwest Airlines Boeing 737 Max 8 prepares for takeoff at Los Angeles International Airport on Dec. 29, 2023. (AaronP/Bauer-Griffin/GC Images / Getty Images)
Due to the reduction in capacity, the company "halted hiring classes for multiple workgroups," which includes pilots and flight attendants.
The company expects headcount to be down on an annual basis and is projecting to incur a net loss in the first quarter of the fiscal year. However, it expects to return to profitability this month.
BOEING WHISTLEBLOWER JOHN BARNETT FOUND DEAD DAYS AFTER TESTIFYING AGAINST COMPANY
This is the second major U.S. carrier whose operations were disrupted by Boeing, which is still reeling after a door plug blew out of a Max 9 jet operated by Alaska Airlines earlier this year.
A Southwest Airlines Boeing 737 Max 8 arrives at Daniel K. Inouye International Airport on Jan. 20, 2024, in Honolulu, Hawaii. (Kevin Carter / Getty Images)
Last week, United Airlines announced it was temporarily pausing pilot hiring in the coming months due to certification and manufacturing delays at Boeing. While that pause will only last through May and June, the company still plans to slow the pace of hiring in 2024.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
After the Jan. 5 incident, the FAA ramped up oversight of Boeing and its supplier Spirit AeroSystems, which included halting production expansion of the Max.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| LUV | SOUTHWEST AIRLINES CO. | 32.33 | -0.27 | -0.83% |
| UAL | UNITED AIRLINES HOLDINGS INC. | 90.38 | -0.79 | -0.87% |
Federal officials have discovered multiple cases in which Boeing and Spirit allegedly failed to comply with manufacturing quality control requirements.
In a preliminary report, the National Transportation Safety Board discovered four key bolts missing from the door plug that fell off the jet.