Southwest Blames Boeing for Capacity Cuts

CNBC reports the carrier will cut capacity, blaming Boeing and their problems with the 737 MAX for the stalled growth.

Southwest Now Expecting Fewer Aircraft, Resulting in “Re-Optimization”

Alongside Southwest CEO Bob Jordan’s presentation at the J.P. Morgan Industrials Conference, the carrier shared feedback on Boeing’s performance in an 8-K filing with the U.S. Securities and Exchange Commission. In the filing, the airline says they are expecting fewer aircraft than promised in 2024.

Boeing previously committed to 79 737 MAX aircraft in 2024, including 58 MAX-8 airframes. With the challenges after the Alaska Airlines door plug blowout incident, the airline now says they are only expecting 46 MAX-8 deliveries and zero MAX-7 aircraft.

“As a result of Boeing’s continued challenges, the Company expects the delivery schedule to be fluid and, therefore, plans to reduce capacity and re-optimize schedules, primarily for the back half of 2024, which will likely result in at least a one point reduction to the Company’s full year 2024 capacity plans on a year-over-year basis,” the filing reads. “The Company is optimistic about the future and remains focused on making continuous adjustments to its operating plan.”

During the conference itself, Jordan was more direct about Boeing’s problems. As quoted by CNBC, the leader of the all-Boeing airline said: “Boeing needs to become a better company.”

Multiple airlines say they have been affected by Boeing’s prohibition by the Federal Aviation Administration on expanding the 737 MAX program. While Alaska Airlines says their capacity is also “in flux,” United is pausing pilot hiring due to the lack of deliveries and taking the 737 MAX-10 “out of internal plans.”

In a statement to CNBC, Boeing said they “are squarely focused on implementing changes to strengthen quality across our production system and taking the necessary time to deliver high quality airplanes that meet all regulatory requirements.” The Chicago-based aerospace giant added they are in constant contact with airlines to manage expectations and provide delivery updates and guidance.