- Southwest’s CEO said the company had to “moderate” hiring because of Boeing delivery delays.
- The airline expects to receive just 70 new Boeing 737 Max planes this year, down from 90.
- Airlines are hamstrung to grow aircraft capacity and pilot shortages.
Southwest Airlines is reducing its hiring targets for this year because of delays in new aircraft from Boeing, the carrier’s CEO Bob Jordan said Thursday.
The Dallas-based airline expects to receive just 70 new 737 Max planes from Boeing this year, down from a previous forecast of 90, cutting its capacity growth plans by one percentage point, Southwest said in quarterly filing.
Southwest is one of Boeing’s best customers and operates a fleet of all 737s. It has orders for 564 Boeing 737 Max planes through the end of the decade, according to the quarterly report. Those aircraft are more fuel efficient and will both replace older jets and help the company grow.
Jordan told CNBC’s “Squawk on the Street” following its quarterly report that the company planned to add a net 7,000 people to its workforce this year, but now had to “moderate” its targets.
The company did not respond to a request to explain how much it would need to reduce its hiring plans.
Boeing employees sign a banner in front of a 737 MAX 8 built for Southwest Airlines as Boeing celebrates the 10,000th 737 rolling off the production line in Renton, Washington, US on March 13, 2018 .
REUTERS/Jason Redmond
Jordan said the company is trying to be “cautious” about its expectations for deliveries, which have been repeatedly delayed.
“You plan ahead to set your schedules, to set your capacity, and you’re wrong. It’s just really hard to change that up close,” Jordan told CNBC’s Phil LeBeau in the interview.
On Wednesday, Boeing said it plans to increase output of 737 Max planes to 38 a month this year from the current rate of about 31 a month, a long-planned increase that has been delayed by problems in the supply chain and labor shortages.
American Airlines CEO Robert Isom also complained about delivery delays when the rival airline reported quarterly results on Thursday.
“In terms of the aircraft manufacturers, both Boeing and Airbus, they need to do a better job,” Isom said in an interview on CNBC’s “Squawk Box” following that report. “When we don’t get delivery on time, guess what? We go out and have to cancel flights. That affects thousands of customers.”
“We have to hold them accountable,” Isom said.
