DBEA55AED16C0C92252A6554BC1553B2 Clicky DBEA55AED16C0C92252A6554BC1553B2 Clicky
July 22, 2024
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The summary per the airline states:

  • Net loss of $231 million, or $0.39 loss per diluted share
  • Net loss, excluding special items, of $218 million, or $0.36 loss per diluted share
  • Record first quarter operating revenues of $6.3 billion
  • Liquidity of $11.5 billion, well in excess of debt outstanding of $8.0 billion

Bob Jordan, President, and Chief Executive Officer, stated, “While it is disappointing to incur a first quarter loss, we exited the quarter with healthy profits and margins in the month of March. We are focused on controlling what we can control and have already taken swift action to address our financial underperformance and adjust for revised aircraft delivery expectations. I want to thank our more than 74,000 Employees for their continued Warrior Spirit to maintain a reliable and resilient operation as we adapt to aircraft delivery constraints and adjust to slower than planned growth for this year and next.”

  • Fleet renewal is a growing problem. During 1Q24, Southwest received five MAX 8s and retired three -700 aircraft, ending the quarter with 819 aircraft.
  • Southwest plans for approximately 20 MAX 8 deliveries in 2024, a reduction from the previous expectation of 46 MAX 8 deliveries
  • Southwest plans to retire approximately 35 aircraft in 2024 (31 -700s and four -800s), a reduction from its previous expectation of 49 (45 -700s and four -800s).
  • This will result in a fleet of roughly 802 aircraft at year-end 2024.
  • Due to Boeing’s delivery delays, Southwest has conservatively re-planned its capacity and delivery expectations for the remainder of this year and next.
  • The airline remains out of gauge because Boeing’s new delivery schedule cannot be guaranteed. Of course, Boeing will pay for this via future discounts, but weakening Boeing does not make Southwest stronger.
  • Southwest’s adherence to one aircraft type and OEM is proving to be its Achilles Heel. Is Ryanair next?

Southwest plans 2Q24 ASMs at +8-9% with RASMs -1.5-3.5%.  The good news is that Southwest remains one of the industry’s strongest airlines.  It is better able to weather the Boeing problems than, say, United—however, every delay in the MAX 7 program works against Southwest’s flexibility.

As Southwest becomes more out of gauge, airlines with smaller and more effective aircraft win markets. The obvious beneficiary is Breeze, but even Allegiant, Frontier, and Spirit can capitalize on this.

author avatar
Addison Schonland
Co-Founder AirInsight. My previous life includes stints at Shell South Africa, CIC Research, and PA Consulting. Got bitten by the aviation bug and ended up an Avgeek. Then the data bug got me, making me a curious Avgeek seeking data-driven logic. Also, I appreciate conversations with smart people from whom I learn so much. Summary: I am very fortunate to work with and converse with great people.

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