Proactive Investors - Southwest Airlines Co (NYSE:LUV) shares have landed around 15% lower after the group revealed several cost-saving measures to deal with weaker growth and reduced aircraft pipeline.
The Texas-based airline said it was preparing to implement a hiring freeze, review its spending plans, and slash capacity as it continues to deal with a reduction in Boeing (NYSE:BA) aircraft deliveries.
It comes as Boeing Co (NYSE:BA, ETR:BCO) faces regulatory and criminal investigations into its aircraft after the Air Alaska incident in January in which part of the fuselage was blown off mid-flight.
Southwest expects to suffer a net loss in the current quarter and is currently re-evaluating its full-year guidance after growth at the low-budget airline began to slow.
Pilots, flight attendants and “multiple” other work groups have had hiring freezes placed on their teams, with the total workforce expected to shrink by the end of the year.
Southwest’s woes highlight a wider crisis affecting airlines as Boeing has been limited by regulators on how many of its 737 MAXs it can sell, despite demand for the fuel-efficient jets being at a high.
Delta Airlines (NYSE:DAL) revealed on Sunday that deliveries of the 737 Max 10 could be as late as 2027.
Over the weekend, pressure on the aircraft maker increased after 50 passengers on board a Boeing 787-9 were injured as it suffered a technical issue causing a sudden loss in altitude.
Last week, a Boeing aircraft owned by United Airlines (NASDAQ:UAL) was forced to divert after it lost a tyre on take-off.