Southwest Airlines is Reevaluating 2024 Guidance Due to Boeing Challenges

By Will Feuer

Southwest Airlines said it is reevaluating its full-year financial guidance, citing uncertainty related to challenges at Boeing that are delaying aircraft deliveries.

The company said Boeing has told Southwest that it should expect 46 deliveries this year of 737-8 aircraft, down from a prior expectation of 79 737 MAX aircraft deliveries this year.

Southwest said it is cutting its guidance for how much it flies this year and re-optimize schedules for the back half of the year due to the uncertainty around deliveries. The company said its full-year guidance is in flux, including for capital spending, and that Southwest expects to provide an update when it reports results for the first quarter next month.

Southwest also cut its current-quarter outlook for revenue per available seat mile, a measure of how efficiently an airline makes money. The company now expects the figure to be flat to up 2% from a year ago, down from its prior target of up 2.5% to 4.5%. Southwest cited soft leisure travel trends and better flight-completion factors than management expected.

The airline also said it expects non-fuel costs to be up about 6% in the quarter, at the high end of its previously provided range. Southwest cited shifting timing for spending on salaries, wages and more.

Also as a result of the Boeing challenges and related changes to Southwest's capacity plans, the company said it has halted hiring for pilots and flight attendants and expects to end the year with fewer workers.

Southwest also raised its current-quarter estimates for fuel costs.

The company said it expects to report a first-quarter loss, but expects to return to profitability in the second quarter.

Write to Will Feuer at Will.Feuer@wsj.com

(END) Dow Jones Newswires

March 12, 2024 07:14 ET (11:14 GMT)

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