Southwest to reduce hiring and cut service at 4 airports following financial loss, American Airlines also reports 1Q loss

Southwest Airlines announced significant changes in response to weak financial results and delays in receiving new planes from Boeing. The Dallas-based carrier reported a loss of $231 million in the first quarter and plans to limit hiring, cut flights, and reduce its workforce by 2,000 employees through attrition.

In an effort to focus on more profitable locations, Southwest will stop flying to four airports in August: Cozumel in Mexico; Syracuse, New York; Bellingham, Washington; and George Bush Intercontinental Airport in Houston. Additionally, the airline will cut half of its flights in Atlanta and about one-third at O’Hare Airport.

The airline’s plans were impacted by delays in receiving new Boeing 737 Max 8 jets, with Southwest now expecting to receive only 20 jets this year instead of the 46 originally planned. Boeing has been struggling with slower production since a door plug incident on an Alaska Airlines Max 9 in January.

Despite the challenges, Southwest remains optimistic about its future profitability. The airline is studying changes in boarding and seating to potentially increase revenue, but ruled out implementing bag fees or a premium cabin. American Airlines also reported a loss in the first quarter but expects to return to profitability in the second quarter.

Both airlines expressed confidence that Boeing will address its production issues, with American CEO Robert Isom urging the manufacturer to “get your act together.” Despite concerns over Boeing’s safety issues, Southwest and American have not seen a significant impact on consumer behavior related to the type of aircraft they fly.