Southwest Airlines confirmed it will suspend services to four airports following reported losses and issues with Boeing delivers.
Four airports affected
The Dallas-based airline will end its services on August 4. Airports affected are George Bush International Airport in Houston, Texas; Bellingham International Airport in Bellingham, Washington; Syracuse Hancock International Airport in Syracuse, New York; and Cozumel International Airport on Cozumel Island, Mexico.
Other changes
Southwest Airlines will also adjust operations in other markets. Initial reports claim that the company plans to reduce the number of flights at Hartsfield-Jackson Atlanta, Georgia, International Airport and Chicago O’Hare International Airport, in Illinois.
Delays of Boeing airplanes
The company confirmed they will receive 20 out of the planned 46 Boeing 737 Max 8 airplanes. This is part of the decision to stop services to some airports. But, there is also a financial aspect. Initially, Southwest announced 79 new Boeings.
Job losses
Southwest CEO Bob Jordan said Boeing plane delays will affect the company’s profits in 2024 and 2025. It will also cut 2,000 jobs, likely by the end of the year. The company enjoyed popularity over its one-size-fits-all politics, which did not include extra fees for baggage or reservations.
That could change
Jordan confirmed to CNBC that they are reconsidering other initiatives following the company’s latest earnings report. Sources say it was unthinkable for the company to consider additional fees, but that changed with the new issues.
JetBlue pulled a similar move
In March, JetBlue announced it would be pulling out of five cities: Kansas City, Missouri, and Newburgh, New York. The company said that removing routes will reduce chances for delays.
JetBlue is exiting from international destinations
The company announced it will leave Bogotá, Colombia, Quito, Ecuador, and Lima, Peru. Vice President of Network Planning and Airline Partnerships Dave Jehn explained how this will improve the company’s financial performance.
American Airlines reported losses as well
In the first quarter, American Airlines reported disappointing results, but CEO Robert Isom confirmed that despite losses, the company will remain on track to deliver on its annual financial goals. The company operates with Boeing and Airbus planes, and Isom said they support Boeing’s efforts.
Boeing’s losses
Just days before Southwest’s announcement, Boeing reported a minor loss in the first quarter. However, following the Alaska Air incident, they will pay its airline customers $443 million in compensation. CEO Dave Calhoun shared that the company will focus more on quality and safety.
The Boeing incident sparked controversy
Alaska Air Group received approximately $160 million after the January door plug incident, and according to Alaska Air Group, more compensation is expected. The door plug of Alaska Airlines flight 1282 fell off a few minutes after take off from Portland International Airport, and luckily, no one got hurt.
A whistleblower’s allegations
Boeing whistleblower Sam Salehpour testified to Congress that the company retaliated against him for raising concerns about the manufacturing process for the 787 and 777 planes. The union representing Boeing engineers also alleged that the company retaliated against two employees overseeing manufacturing for the FAA. Boeing denied retaliation.
Boeing’s safety concerns
The FAA (Federal Aviation Administration) is investigating Salehpour’s claims about Boeing’s 787 and 777 production. Senator Blumenthal, chairman of the Subcommittee on Investigations, hopes the DOJ will cooperate with their investigation of Boeing.
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