Higher fares and fewer planes: Boeing crisis forces airlines to cut services
Boeing is telling airlines they will receive fewer 737 Max jets than expected this year, forcing them to trim schedules and raising the prospect of higher fares during the busy summer travel season. Carriers in the US and Europe are preparing to have fewer new shorter-haul aircraft than they planned for, an unwelcome surprise that is driving up labour costs and keeping older aircraft in service. Boeing has reduced production rates after a door panel blew out from a 737 Max during an Alaska Airlines flight in January. The company this week reported burning almost $4bn in cash in Q1. The US FAA has said Boeing can make no more than 38 737 Max planes a month as it works to improve quality controls. In March the planemaker delivered 24 jets to customers, compared with 52 the same month a year earlier. European rival Airbus, meanwhile, delivered 51 of the A320 and A321neo, planes that compete with the Max. Southwest Airlines, the carrier with the most 737 Maxes in service and on order, said on Thursday it would receive only 20 of the 46 single-aisle jets it had expected this year. In January, it said it was planning to receive 79 Max aircraft, rather than the 85 that had been agreed. With less capacity, Southwest now projects 2024 operating revenue will grow by less than 10% compared with last year. Previously it had forecast double-digit growth. The carrier, which posted a Q1 net loss of $231m, announced a series of cost-saving measures, dropping service to four US airports and cutting headcount by 2,000 employees by the end of the year. It is limiting hiring, offering voluntary time off and trimming its schedule for the second half of the year. Southwest also is delaying retirement for some aircraft, reducing “turn times” to ready a jet for its next flight and adding some red-eye flights, as it tries to generate more revenue from planes already in its possession.<br/>
https://portal.staralliance.com/cms/news/hot-topics/2024-04-26/general/higher-fares-and-fewer-planes-boeing-crisis-forces-airlines-to-cut-services
https://portal.staralliance.com/cms/logo.png
Higher fares and fewer planes: Boeing crisis forces airlines to cut services
Boeing is telling airlines they will receive fewer 737 Max jets than expected this year, forcing them to trim schedules and raising the prospect of higher fares during the busy summer travel season. Carriers in the US and Europe are preparing to have fewer new shorter-haul aircraft than they planned for, an unwelcome surprise that is driving up labour costs and keeping older aircraft in service. Boeing has reduced production rates after a door panel blew out from a 737 Max during an Alaska Airlines flight in January. The company this week reported burning almost $4bn in cash in Q1. The US FAA has said Boeing can make no more than 38 737 Max planes a month as it works to improve quality controls. In March the planemaker delivered 24 jets to customers, compared with 52 the same month a year earlier. European rival Airbus, meanwhile, delivered 51 of the A320 and A321neo, planes that compete with the Max. Southwest Airlines, the carrier with the most 737 Maxes in service and on order, said on Thursday it would receive only 20 of the 46 single-aisle jets it had expected this year. In January, it said it was planning to receive 79 Max aircraft, rather than the 85 that had been agreed. With less capacity, Southwest now projects 2024 operating revenue will grow by less than 10% compared with last year. Previously it had forecast double-digit growth. The carrier, which posted a Q1 net loss of $231m, announced a series of cost-saving measures, dropping service to four US airports and cutting headcount by 2,000 employees by the end of the year. It is limiting hiring, offering voluntary time off and trimming its schedule for the second half of the year. Southwest also is delaying retirement for some aircraft, reducing “turn times” to ready a jet for its next flight and adding some red-eye flights, as it tries to generate more revenue from planes already in its possession.<br/>
