Southwest falls as Boeing woes force hiring freeze, cost review
Southwest Airlines plans to cut capacity this year, halt most hiring and review its spending plans in response to reduced aircraft deliveries from Boeing Co., the planemaker facing regulatory and criminal investigations in the wake of a near-catastrophic accident in January. The carrier expects a net loss this quarter and said in a regulatory filing Tuesday that it’s re-evaluating prior guidance for the full year because of the slowing growth. Hiring has already stopped for multiple work groups, including pilots and flight attendants, and Southwest expects to end the year with lower headcount than in 2023. Southwest shares fell as much as 12% in New York, their biggest intraday drop since June 2020. The stock had risen 17% this year through Monday’s trading. The carrier’s downcast outlook highlights how the crisis at Boeing is rippling through the broader aviation industry. The planemaker has been mandated by regulators to cap output of its bestselling 737 Max model, leaving many customers short of much-needed aircraft at a time when demand for fuel-efficient jets remains high. Alaska Airlines, the airline that suffered the accident on Jan. 5 with a Boeing 737 Max 9, also said Tuesday its capacity outlook remains “in flux” because of uncertainty around deliveries. Southwest said it doesn’t expect to receive any of its long-awaited 737 Max 7 aircraft this year, and that deliveries of other Boeing models will come in at just 46 units, down from the 79 previously anticipated. Boeing has vowed to double down on its safety procedures as regulators put its manufacturing processes under the microscope, faulting the planemaker for sloppy standards at its factories.<br/>
https://portal.staralliance.com/cms/news/hot-topics/2024-03-13/unaligned/southwest-falls-as-boeing-woes-force-hiring-freeze-cost-review
https://portal.staralliance.com/cms/logo.png
Southwest falls as Boeing woes force hiring freeze, cost review
Southwest Airlines plans to cut capacity this year, halt most hiring and review its spending plans in response to reduced aircraft deliveries from Boeing Co., the planemaker facing regulatory and criminal investigations in the wake of a near-catastrophic accident in January. The carrier expects a net loss this quarter and said in a regulatory filing Tuesday that it’s re-evaluating prior guidance for the full year because of the slowing growth. Hiring has already stopped for multiple work groups, including pilots and flight attendants, and Southwest expects to end the year with lower headcount than in 2023. Southwest shares fell as much as 12% in New York, their biggest intraday drop since June 2020. The stock had risen 17% this year through Monday’s trading. The carrier’s downcast outlook highlights how the crisis at Boeing is rippling through the broader aviation industry. The planemaker has been mandated by regulators to cap output of its bestselling 737 Max model, leaving many customers short of much-needed aircraft at a time when demand for fuel-efficient jets remains high. Alaska Airlines, the airline that suffered the accident on Jan. 5 with a Boeing 737 Max 9, also said Tuesday its capacity outlook remains “in flux” because of uncertainty around deliveries. Southwest said it doesn’t expect to receive any of its long-awaited 737 Max 7 aircraft this year, and that deliveries of other Boeing models will come in at just 46 units, down from the 79 previously anticipated. Boeing has vowed to double down on its safety procedures as regulators put its manufacturing processes under the microscope, faulting the planemaker for sloppy standards at its factories.<br/>
