Southwest is ceasing operations at four airports, and reducing flights from others, in an effort to cut costs as its growth plans were also curtailed by fewer-than-expected plane deliveries from Boeing. The airline, which flies only Boeing 737 planes, said on Thursday that delays from the embattled aircraft manufacturer contributed to its struggles. Southwest reported a loss of $231m for Q1, worse than analysts expected, sending its share price down 10% in early trading. To cut costs, Southwest said, it will cease operations at four airports from early August: Bellingham International Airport in Washington State, Cozumel International Airport, George Bush Intercontinental Airport in Houston and Syracuse Hancock International Airport. It will also “significantly restructure” its flights from other airports, most notably by reducing flights at Hartsfield-Jackson Atlanta and Chicago O’Hare International Airports. Southwest’s CE, Bob Jordan, said Thursday that the decision to exit those airports was unrelated to delays in receiving new Boeing planes, although those delays were causing other problems. “The network actions have really nothing to do with the Boeing delay. We are taking network actions regardless,” he said. “Now, the Boeing delays are very painful. They cause us to replan, they hurt us on the revenue front, they cause us to be inefficient, and we’re working all of that.” The airline’s woes were another ripple effect of the incident on Jan. 5, when a panel of a Boeing 737 Max 9 jet blew out during an Alaska Airlines flight. The event led to the temporary grounding of the popular jet model and a slowdown in production as Boeing has faced increased regulatory scrutiny over its quality control. Southwest said it expected to get 20 new Boeing jets this year, down from the 46 it previously anticipated. The timing of the deliveries depends on the FAA, which has capped Boeing’s production while it gets quality issues under control.<br/>
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Southwest is considering doing away with open, single-class seating on its aircraft. Ahead of the airline’s Q1 earnings call on Thursday, CEO Bob Jordan said the company is weighing options for cabin reconfiguration to address its recent revenue shortfall. “We’re looking into new initiatives, things like the way we seat and board our aircraft,” Jordan told the network. Southwest has long differentiated itself from other airlines with one class of seating and little variability – no extra legroom seats or first class on its 737 fleet. But now, Jordan said it may be time to change the strategy. “Customer preferences do change over time,” he told CNBC. He acknowledged the airline hasn’t made any decisions on implementing a new strategy but said studies about what they could do have yielded “interesting” results. For now, the only reliable way for Southwest customers can get their seating preference is to pay extra for an earlier boarding position. Southwest Airlines does not currently assign seats and passengers claim their real estate as they board the plane in an assigned order. During Thursday's earnings call, Jordan confirmed the airline was exploring updates to its seating and boarding processes.<br/>
Wizz Air Holdings Plc narrowed its net income guidance for the full year as the budget airline faces aircraft groundings because of engine issues on some of its Airbus jets. Net income this year will be between E350m to E370m, down from a previous range of E350m to E400m, the Hungarian budget carrier said on Thursday in a trading statement. Wizz is among the airlines impacted by issues with Pratt & Whitney’s geared turbofan engines on some A320-family aircraft. CEO Jozsef Varadi told Bloomberg in March that about 20% of Wizz’s fleet was parked for turbine inspections and he predicted to see engine groundings to reach their peak in six to 12 months. Despite the engine woes, Wizz said it returned to profitability in its fiscal year and that it’s trading positively into the busy summer travel season. Total revenue is expected to be between E5b to E5.1b, which the company said reflects higher pricing, the airline said. Wizz said it will reduce net debt, boost operational cash and expand operating margins in fiscal 2025. The airline maintained a flat year-on-year capacity growth target for the full 2025 financial year. The engine issue was one of the main challenges that Wizz faced, alongside the conflict in the Middle East and air traffic control disruptions.<br/>
Icelandair Group has recorded an improvement in its cargo operation, with a return to operating profit in Q1. The company states that it is “on track” to deliver a full-year operating profit in the division after implementing a number of efficiency measures. It reduced freight capacity by 9% as part of this efficiency effort. The company says capacity was consequently “better aligned” with demand, with flown freighter block hours 35% down on last year. One of the carrier’s freighters has been placed on long-term lease. As a result of the measures, Icelandair Cargo’s revenues of $20.7m for the first three months were down 13%. The carrier's CE says the positive operating figure in February and March demonstrates a “great turnaround” compared with last year. The cargo division narrowly edged into operating profit for the three months, contrasting with a $3.8m loss last year.<br/>
A wave of political turmoil crashed over Spain on Thursday as Prime Minister Pedro Sánchez publicly weighed resigning his post after a judge agreed to investigate his wife over allegations that he and other officials decried as a politically driven smear campaign. The judge’s decision to take up the case — which was brought by a self-described anti-graft group on the basis of online news reports about alleged influence peddling — prompted Sánchez’s supporters to coalesce behind him and public prosecutors to move quickly on Thursday to try to get the case dismissed. Sánchez, whose political survival skills have for years astonished his supporters and detractors alike, wrote in a public letter Wednesday that the accusations against his wife, Begoña Gómez, were false and amounted to harassment. One of the most prominent leftist leaders in Europe, Sánchez has canceled his public schedule while he reflects on his next move. He plans to address the nation on Monday. The trigger for the sudden crisis was the decision by a Spanish judge to entertain a complaint from Clean Hands, a group known for filing cases in court against politicians and other prominent Spaniards. The group filed a complaint accusing Gómez of influence peddling and corruption — citing as potential evidence online news reports that it has acknowledged could contain false information. The judge ordered a preliminary investigation based on those online media reports. Two of the articles allege that in 2020, Gómez signed two letters of recommendation to support a bid for a public contract by a group of companies to which she has personal and professional ties. The articles claim that the main stakeholder of the group designed the master’s program that Gómez ran at Complutense University of Madrid and that the companies supported by Gómez competed with 20 rivals and won three contracts worth more than E10m, or about $10.7m. The complaint by Clean Hands also cited an article in the online media outlet El Confidencial that claimed Ms. Gómez met with representatives of Air Europa, a Spanish airline, in 2020 to sign a confidential agreement in which the airline would pay 40,000 euros a year ($43,000) to the Africa Center she led at a private university. Months later, the airline received more than E400m in bailout funds during the pandemic. The Africa Center denied it had “ever received financial contributions” from Air Europa’s parent company or affiliates. It said the Center signed during Gómez’s tenure in 2020 a sponsorship deal with the airline’s parent company that included four airline tickets to a work event in London, which was “never executed” because of the pandemic. It said Gómez’s 2018 contract specifically prevented the Center from benefiting from her “family position.”<br/>
India's largest airline IndiGo has struck a deal with Airbus for 30 wide-body aircraft with a provision to buy 70 more, as it plans to begin long-haul flights, a segment dominated by Tata Group's Air India. IndiGo, a budget airline, has ordered the A350-900 model that is powered by Rolls-Royce engines. It expects deliveries to begin in 2027, the company said Thursday. CEO Pieter Elbers said the new aircraft "will allow IndiGo to embark on its next phase of becoming one of the leading global aviation players." The new deal with Airbus follows last year's record-breaking order of 500 narrow-body aircraft that would let IndiGo strengthen its domestic network and expand its lead over Tata Group, which is also on an expansion spree. In February last year, Tata Group placed an order for 470 aircraft with Airbus and Boeing that included 70 wide-body jets. IndiGo's domestic operations are bigger than Tata Group's, with a 60.3% market share in the January-March quarter. This was more than double Tata Group's 28.5% market share, according to India's civil aviation regulator Directorate General of Civil Aviation (DGCA). But Tata Group dominates international routes. Tata Group brands -- Air India, Air India Express and Vistara -- flew 4.42m passengers in the January-March period, against IndiGo's 3m. Middle Eastern carriers are, however, the biggest international operators in India. They accounted for about 60% of India's international traffic in the October-December quarter, the latest such data available.<br/>
AirAsia announced a 6.8b ringgit ($1.42b) deal to create a new, listed entity that will simplify its operations by combining its various airline units. As part of the merger, listed long-haul carrier AirAsia X Bhd. will acquire AirAsia Aviation Group and AirAsia Berhad from sister company Capital A Bhd., according to an announcement on Thursday. AirAsia X will subsequently be delisted, with a consolidated aviation company called AirAsia Group being listed instead, the filing said. The new company plans to undertake a private placement to raise 1b ringgit as part of the process, which is pending approval from Bursa Malaysia. The proceeds will used to fund new planes and parts, service debt and for general working capital needs. The transaction will allow Capital A to ultimately become a holding company for all the group’s non-aviation businesses, as well as remove liabilities associated with the airline units. The company plans to eventually list its non-aviation business units — such as online travel platform Move and logistics company Teleport — both of which have reported strong growth since the pandemic. AirAsia operates units in five southeast Asian countries currently, with operations in Cambodia commencing next week. It is also seeking to start units based in Singapore and Vietnam, and anticipates all of its fleet will be back in operation by mid-year. Capital A expects to record a pro-forma gain of 10.76b ringgit from both disposals, it said in a separate filing. The Malaysian stock exchange currently classifies Capital A as a financially distressed company.<br/>