Southwest nurses its wounds as airlines continue to feel the Boeing sting
Just plane rough… As fallout from Boeing’s January 737 Max door-plug fiasco continues to ripple through the industry, Southwest Airlines, which reported yesterday, is feeling the bumps. The airline, known for free bags and Wild West seat selection, is shutting down operations at four airports (in Houston, Syracuse, Washington state, and Cozumel, Mexico) and scaling back service at two major hubs: Hartsfield-Jackson Atlanta and Chicago’s O’Hare. Southwest, which flies only 737 planes, is the latest carrier to put numbers on its Boeing bite.
Ginger-ailing: Southwest now expects to get just 20 Boeing 737 Max 8 planes this year, down from 58. Last month it paused hiring of pilots and flight attendants.
Cabin pressure: Southwest’s per-seat flying costs will climb about 8% this year. CEO Bob Jordan said changes to its boarding and open-seating policies could be on the table to recoup costs.
Hurt planes hurt airlines… Boeing burned through nearly $4B in cash last quarter after its doorbacle, but Southwest isn’t the only carrier that took a hit. United Airlines last week said its $200M Boeing ding kept it from reporting a profit on the quarter. Alaska Air similarly reported $132M in losses and pointed to Boeing-related groundings. Even Delta Air Lines, which doesn’t have any 737 Max jets in its fleet, sees Boeing L’s in its future. Last month it said it expected its order of 100 737 Max 10 jets to be delayed by about two years.
Airlines are still bracing… Southwest’s airport exits are its first since 2019, when it pulled out of Newark because of previous 737 Max groundings. As basically all major US airlines deal with delayed Boeing deliveries, and the costs that follow, the industry’s final Boeing price tag is still adding up.