The airline industry received unsettling news on Thursday in a possible signal that deep financial losses could spell trouble for some carriers. Southwest Airlines announced that it will lay off roughly 2,000 employees and end operations at four major airports.
The company is far from the only transportation provider to struggle in the first quarter of 2024. American Airlines also reported heavy losses as it tried to ride out delays in Boeing deliveries and rising labor costs.
Boeing is currently slashing its delivery schedule due to well-documented recent troubles. This means both carriers are unable to add flights to keep pace with travel demand.
Southwest CEO Bob Jordan called the reported $231 million loss “disappointing.” He said that the company is focused on aspects of its business that it controls and will “adjust” for unmet aircraft delivery schedules.
This setback occurred despite operating revenue increasing 11% to $6.3 billion. The airline lost $159 million in the same period in 2023.
Jordan added that recent announcements of further delivery delays from Boeing will affect both 2024 and 2025.
✈️ Southwest Airlines exits multiple airports as Boeing troubles weigh
–https://t.co/q8d9lhAduh— DailyJobCuts . com – Layoffs / Job / Economy News (@dailyjobcuts) April 25, 2024
The number of airliners the company now believes it will receive from Boeing dropped drastically. Just weeks ago the expectation was for 46 new jets, but that number fell 57% to only 20.
Southwest planned to retire 49 aircraft from service this year, but that number also dropped to 35.
Its fleet by the end of 2024 will be approximately 802 aircraft.
The 2,000 expected employee layoffs will come from its 74,000 workers, and hiring is also expected to slow. Southwest plans to offer voluntary time off programs as another way to cut costs.
Southwest further intends to end its service at Cozumel International Airport in Mexico, Syracuse Hancock International Airport in New York, Bellingham International Airport in Washington state and George Bush Intercontinental Airport in Houston.
