Southwest Airlines announced it would slow hiring and cease operations at four airports as part of cost-cutting measures following a disappointing first-quarter performance.
Despite reporting a first-quarter revenue of $6.3 billion, the low-cost carrier incurred a loss of $231 million in the first quarter of 2024, surpassing the $159 million loss it took in the same period last year.
As the world’s largest carrier of 737 MAX aircraft, Southwest has been reeling in the effects of Boeing’s manufacturing woes. The airline says it expects to receive 20 aircraft deliveries from Boeing this year, a significant decrease from its initial projection of 46 aircraft. Additionally, the carrier says it plans to cut 2,000 jobs and offer voluntary time off programs.
“The recent news from Boeing regarding further aircraft delivery delays presents significant challenges for both 2024 and 2025,” Southwest CEO Bob Jordan said on Thursday.
Meanwhile, American Airlines announced a quarterly loss of $312 million but maintained an optimistic outlook for its earnings in the current quarter. According to the New York Times, Alaska Airlines and United Airlines reported narrower losses than expected in the first three months of the year, while Delta Air Lines was the only major carrier to report a profit in the first quarter.
Amelia, how can a company have a 6.3 billion dollar profit and still lose 231 million dollars? I think you meant that they had 6.3 billion in revenue but lost 231 million.
You’re correct, I meant to put “revenue”. It should be updated now. Thanks!
I have very little sympathy for any airline that is losing money when planes are full. That is a management problem. Until the airlines start charging fares that actually reflect what the true costs of that flight are, then any of them actually have to go bankrupt, let them fail. $99 fare from New York to Florida is not a profitable fare.
my guess is that some flights appear to be unprofitable, but actually are in the large framework. it’s the overall profitability of all the flights that counts, not an individual route. hence, the outrageous appearing cost of flights from routes with low pax counts, versus, as you note, the low cost of routes with high pax counts. but i also agree with you that the airlines should charge more and make the flights as close as possible to emulating what the passenger experience was in the 1960’s and 1970’s: roomy, civilized, dress codes, meal service, graceful gentility…versus the “cattle car” ambience of today’s travel (yech!)
We buy the cheapest crap we can find and then bitch about the poor quality.
We have met the enemy. He are us!
Ding, Ding, Ding!
Airlines should be charging people and their luggage by weight. Period. Nothing, absolutely nothing can be more equitable.
Most of the weight on a flight is the aircraft and fuel. The variable cost per passenger pound is negligible, while the cost of implementing the charge would be considerable, raising all ticket prices (in principle). So your idea is prejudicial rather than equitable.
No, your’er wrong. You’re just trying to explain away the obvious. Nice try.
Ask a loadmaster which method makes more sense.
The loadmasters don’t pay the bills.
True. But that makes the critical resource, space; or specifically, volume. If the airlines want to optimize load factors, they should take a page from the moving industry, whose pack-out teams are experts in shipping-carton volume optimization.
Each aircraft has a finite amount of space for pax and bags, so airlines should charge a single price for a flight, and every check-in gate should have a dunk-tank where the volume required by every passenger (and their luggage+carry-on) is accurately determined. The passenger is then wrapped in a complimentary beach towel (or two), given a vacuum bag containing their clothes, and sent to the boarding gate. (Arrival gates will have cubicles for changing back into street clothes post-flight.)
The passenger’s credit card will be charged or credited for the delta volume that each passenger deviates from the mean for that flight.
That will have at least two other salutary effects: olfactory (self-explanatory) and (with the removal of all armrests) seat assignments. Each single-aisle row could accommodate from two to eight pax, depending on their hip-to-shoulder girth.
We airline passengers have complained for years about being treated like cattle. Let’s try being treated like treasured household goods.
I’m dyin’ here.
This has echos of Swift’s A Modest Proposal.
Well done.
You’re absolutely correct. Airlines have been turned into mass transit operations which is something they can never be. The entire industry is extremely over loaded and operating beyound a safe and profitable way. The airlines constantly look to the airframe builders to provide yet a little more efficency to squeeze out a little profit. There may not be pilot shortages but there certainly is a shortage of “good qualified” pilots. Shortages of qualified mechanics and ground personal. The FAA cannot come close to filling their normal levels of qualified controllers, yet they continue to allow airline to add more and more flights. Major airports are overtaxed and yet they still allow bank scheduling to exist where landing aircraft are lined up thirty miles out and departing fitting in like cogs on a gear. Followed by two hours of inactivity. All of this supported by “cheap fares” that keep the wheels turning.
Airlines operate on cash flow only. When they do squeeze of a small profit they spend like drunken sailors buying new aircraft, fancier lounges, and upping salaries and wages beyound any resonable level. When that small profit margin disappears, the furloughs start. What could possibly go wrong?
Cut 2000 jobs after over paying pilots to the tune of $250,000.
They have no choice as the unions would shut them down. It takes years to reestablish normal operations and financial stability after a strike. If they ever so. The only solution is what happened at Northwest and others. Peicemeal the company out and let it fade away.
Well, it’s all the fault of Boeing of course. “Reeling” at the effects of Boeings problems? Let me see if I understand your line of thinking. An airline operates say 100 aircraft and loses money. But with your thinking, if they had twenty more, they would have made a profit. If Southwest and the other airlines blame their losses on Boeing it’s only to gain some sort of financial benefit from them. All airlines are on very shaky ground financially. They always have been. Boeings inability to fulfill their endless thirst for growth may very well be their salvation.
JetJoe, you’re only looking at one variable. The airline (Southwest) was expecting to have more aircraft. I’ll use your number of 20% more, which probably isn’t far off. So with that expectation, they hired/staffed in 2023 to operate that number of aircraft in 2024 and they built a flight schedule for that size fleet. Then, when the airplanes don’t appear, they are overstaffed and at the same time under-equipped to operate the planned flight schedule. That’s not completely devastating, but it might be harmful enough to tip the balance of profitability into the negative in a first quarter (which is always a little tough for the airlines).
Airlines only make a profit when everything is in balance. Fleet, staff, schedule, support.
It seems to me that a pertinent question has gone unasked here: Why is Delta profitable while the other three are not? I assume the answer would be complicated, but I would like see an analysis by experts of that in AVweb.
Leisure air travel has become too affordable for the masses. Increase prices, increase profits. The planes will still be full and also more safe.