- Southwest Airlines flights to Cozumel, Syracuse and Bellingham are cut
- Flights cut to George Bush Intercontinental Airport in Houston
- Flights will continue to Houston William P. Hobby Airport
- Boeing reduces delivery delays after a year of air disasters
Southwest Airlines no longer flies from four airports, it announced Thursday in a major restructuring after reporting disappointing earnings.
The airline no longer flies from Cozumel in Mexico, Syracuse, New York, Bellingham, Washington and George Bush Intercontinental Airport in Houston.
Two thousand employees will also lose their jobs and the airline expects to receive only 20 aircraft this year, 26 fewer than previously planned.
Southwest warned that there were no guarantees that Boeing would meet this latest delivery schedule. Chief Executive Bob Jordan said delivery delays would pose “significant challenges” for the airline this year and next.
This is the third time Southwest has lowered its aircraft delivery estimates. It originally planned to receive 85 Boeing aircraft this year.
Southwest shares fell about 9% to $26.75 in morning trading.
Southwest Airlines will no longer fly from four airports, it announced Thursday in a major restructuring after reporting disappointing earnings.
Boeing is recovering from a safety crisis caused by the mid-flight cockpit panel explosion in January on an Alaska Air flight. Regulators have put a cap on 737 MAX production, but the company is not meeting even that level, Reuters reported this month.
The planemaker’s woes are spreading across the industry as a shortage of planes is making it difficult for airlines to keep up with travel demand that is set to reach record levels this year.
But Southwest, which operates an all-Boeing fleet, is one of the hardest hit. It now expects its total seating capacity to increase 4% year-on-year in 2024, compared to 6% growth estimated previously.
The company said the schedule reductions will not only result in slower-than-expected revenue growth this year versus last year, but will also translate into higher-than-expected operating costs.
Southwest’s stock price plummeted Thursday after the cuts were announced.
To mitigate the impact, Southwest said it is trying to improve productivity and rein in discretionary spending.
“We are focused on controlling what we can control and have already taken swift action to address our poor financial performance and align with revised aircraft delivery expectations,” Jordan said.
It has already stopped hiring pilots and flight attendants and now expects to end the year with about 2,000 fewer employees than in 2023.
Southwest said it will end service at Bellingham International Airport in Washington, Cozumel International Airport in Mexico, Houston’s George Bush Intercontinental Airport and New York’s Syracuse Hancock International Airport in August.
It will also reduce capacity in markets such as Chicago and Atlanta.
Southwest reported an adjusted loss of 36 cents per share in the first quarter. Analysts expected an average loss of 34 cents, according to LSEG data.