Summary
- Southwest Airlines should receive 33 fewer Boeing 737 MAX deliveries in 2024.
- The carrier will reevaluate its full-year 2024 guidance and capital expenditure, providing an update in April 2024.
- The airline has joined others, which have publicly said that it expected fewer Boeing 737 MAX deliveries in 2024.
In its latest update to investors, Southwest Airlines has outlined that Boeing told the airline that it should expect 33 fewer aircraft deliveries in 2024, which included other 737 MAX models, resembling the 737 MAX 7. Consequently, the carrier can have to reevaluate its full-year guidance for 2024.
Fewer 737 MAX deliveries
In a Securities and Exchange Commission (SEC) filing on March 12, 2024, Southwest Airlines said that Boeing informed the airline that it should expect 46 Boeing 737 MAX 8 aircraft to be delivered in 2024. Previously, the carrier expected 79 737 MAXs to hitch its fleet in the course of the 12 months, including 78 737 MAX 8 aircraft.
Photo: dorengo5 | Shutterstock
Nonetheless, since Boeing has still did not certify the 737 MAX 7, and with ever-increasing scrutiny over its quality management at its sites, in addition to at Spirit AeroSystems, a Tier 1 supplier for the 737 MAX program, further delays could follow. As such, Southwest Airlines said it now doesn’t expect to receive a single 737 MAX 7 in 2024.
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Guidance reevaluation
Subsequently, Southwest Airlines stated that it has been reevaluating its full-year 2024 guidance, including the expected capital expenditure on aircraft. It expects to supply an update on the 12 months’s outlook on April 25, 2024, when the airline declares its Q1 2024 results.
For now, the carrier provided an update on the primary quarter of the 12 months, saying that thus far, its performance in the course of the first three months of the 12 months has been strong, with no flight cancellations being much lower than in Q1 2023. As such, its capability should grow by 11%, in comparison with the previous estimate of 10%. Each metrics are 12 months-on-12 months (YoY).
![Southwest Airlines Boeing 737](https://static1.simpleflyingimages.com/wordpress/wp-content/uploads/2024/01/shutterstock_606188015-2.jpg)
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Meanwhile, it needed to lower its Revenue Per Available Seat Mile (RASM) guidance from growth of two.5% to 4.5% to either flat or up 2% YoY. Southwest Airlines noted that around 1% of the decrease is as a consequence of higher-than-expected completion aspects in February and March, with the remaining numbers being attributed to lower-than-expected leisure passenger volume.
Looking forward to Q2 2024, the carrier said that bookings are ahead of seasonally normal trends, which could end in record operating revenue in the course of the next quarter. Moreover, it expects that its RASM should proceed growing throughout 2024.
![Southwest Airlines Boeing 737-8H4 landing.](https://static1.simpleflyingimages.com/wordpress/wp-content/uploads/2023/12/415503585_774045868085183_8971612716266504392_n-1.jpg)
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Other 737 MAX delays
The airline has joined several carriers, resembling Allegiant Air, Ryanair, United Airlines, and others, which expect significant aircraft delivery delays from Boeing, including for the uncertified aircraft programs, the 737 MAX 7 and 737 MAX 10.
Photo: Delta Air Lines
In an interview with Bloomberg, Ed Bastian, the chief executive officer (CEO) of Delta Air Lines, stated that he expected that Boeing would deliver its first 737 MAX 10 to the airline in 2025. In response to the chief, that timeline has shifted by a 12 months or two.
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