Proactive Investors - Southwest Airlines Co (NYSE:LUV) shares have tumbled 8% after it warned its growth plans would continue to be hampered by Boeing (NYSE:BA) aircraft delays well into 2025.
A wider-than-expected first-quarter loss and set of sales were also posted by the group, highlighting that the troubles surrounding Boeing are having a direct effect.
Sales during the three months came in at US$6.33 billion compared to Wall Street guidance of US$6.42 billion.
Adjusted losses per share reached US$0.36 against analyst forecasts for US$0.34.
Southwest Airlines was forced to lower its growth capacity for the full year from 6% to 4% due to the delays and is now expecting second-quarter revenue to slump by 3.5%.
It warned that it only expected to receive 20 Boeing 737 Max 8 models, down from the 46 originally forecast.
To deal with the reduced deliveries, the airline will delay retiring its older Boeing planes as well as offering voluntary time off for workers.
Some 2,000 workers are also expected to be axed because of the cost-cutting.
Meanwhile, the smaller-sized American Airlines (NASDAQ:AAL) Group Inc (NASDAQ:AAL, ETR:A1G) traded flat as a set of rosy forecasts helped offset the fact it swung to a loss in the first quarter.
Adjusted losses per share reached US$0.34 compared to Wall Street’s guidance of US$0.29.
However, American Airlines expects to return to a profit in the second quarter, targeting between US$1.15 and US$1.45 per share, significantly above analyst guidance of US$1.18.
“While we aren’t satisfied with our first-quarter financial results, we have a strong foundation in place, and we remain on track to deliver on our full-year financial targets,” Robert Isom said.
Isom told investors he did not expect the company to suffer a material impact from any Boeing delays despite receiving seven fewer aircrafts.