Southwest Frustrations Grow Over 737 MAX Delays

Southwest has reported its first quarter results for the 2023 calendar year. The company highlighted a net loss of US $159 million for the first quarter.

Southwest said they recorded first-quarter operating revenues of US $5.7 billion too. Meanwhile, liquidity stood at US $12.7 billion and the airline says this is solid.

For the remainder of 2023, their outlook is positive regarding demand. Noticeably for Southwest, in March of 2023, they found that business travel bookings had recovered to pre-pandemic rates.

However, for Southwest, aircraft deliveries have impacted them largely and will continue to hurt their plans if delays continue.

Southwest is an all-Boeing customer and is directly in the crossfire of any niggles hitting the American plane maker and their 737 family. With the 737 MAX back in the spotlight for the wrong reasons following supply chain issues, the airline expects 70 737-8 will be delivered for the remainder of 2023. This is down 20 from its original forecast of 90.

As the busy summer season approaches, Southwest says it wants to be well-equipped with aircraft to meet the demand available. However, with continued delays in aircraft deliveries, meeting this demand may be increasingly more challenging than initially expected.

As such, Southwest predicts that the summer season will be strong and demand will be more than present. However, some areas of the finances will not highlight how positive the space is. These results will be directly due to aircraft delivery delays.

While the company has reduced its expectation regarding aircraft deliveries, the knock-on effect is also adjustments to retirement plans for ageing types. By year’s end, the airline says it’ll have 814 aircraft on its books. This is in comparison to the previously forecasted 833.

However, given the fluidity of the industry, this guidance could change depending on how programs progress in the months and quarters ahead.