Southwest will limit hiring and drop 4 airports after loss. American Airlines posts 1Q loss as well
American and Southwest airlines both say they lost money in the first quarter, and they're responding by trying to cut costs
DALLAS — Southwest Airlines will limit hiring and stop flying to four airports as it copes with weak financial results and delays in getting new planes from Boeing.
Both Southwest and American Airlines reported first-quarter losses Thursday. Demand for travel remains strong, including among business flyers, but airlines are dealing with higher labor costs, and delays in aircraft deliveries are limiting their ability to add more flights.
Southwest said it lost $231 million. CEO Robert Jordan said the airline was reacting quickly “to address our financial underperformance," including by slowing down hiring and asking employees to take time off.
The Dallas-based carrier said it expects to end this year with 2,000 fewer employees than it had at the start of the year.
Southwest will also stop flying to four airports: Cozumel, Mexico; Syracuse, New York; Bellingham, Washington; and George Bush Intercontinental Airport in Houston, where the airline’s major operation is at smaller Hobby Airport.
The closures will help the airline focus on more profitable locations and deploy a fleet of planes that will be smaller than it had planned. Southwest said it expects to get only 20 new 737 Max 8 jets from Boeing this year, down from the 46 it expected just a few weeks ago. It will offset some of the shortage by retiring fewer planes.
Boeing is struggling with slower production since a door plug blew out of an Alaska Airlines Max 9 in January, and that is frustrating its airline customers.
Dallas-based Southwest said that its loss, after excluding special items, was 36 cents per share. That was slightly worse
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