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Southwest Airlines says it will limit hiring and drop 4 airports after first quarter losses

Southwest airplanes docked at gates Friday, Dec. 8, 2023, at Dallas Love Field.
Yfat Yossifor
Southwest airplanes docked at gates Friday, Dec. 8, 2023, at Dallas Love Field.

American Airlines and Southwest Airlines both lost money in the first quarter, and Southwest said Thursday that it will limit hiring and close operations at four airports.

Southwest expects to end this year with 2,000 fewer employees than it had at the start of the year.

Airlines are dealing with higher labor costs and delays in getting new planes from Boeing, which is limiting their ability to add more flights at a time of high demand for travel.

American said it lost $312 million as labor costs rose 18%, or nearly $600 million. The airline said it expects to return to profitability in the second quarter — a busier time for travel — and post earnings between $1.15 and $1.45 per share. Analysts expect $1.15 per share, according to FactSet.

The first-quarter loss amounted to 34 cents per share excluding special items, which was worse than the loss of 27 cents per share forecast by analysts.

Revenue was $12.57 billion.

Southwest said it lost $231 million and will limit hiring, offer voluntary time off to employees and stop flying to four airports: Cozumel, Mexico; Syracuse, New York; Bellingham, Washington; and George Bush Intercontinental Airport in Houston, where the airline's major operation is at smaller Hobby Airport.

CEO Robert Jordan said the airline was reacting quickly “to address our financial underperformance” and cope with delayed deliveries of new planes from Boeing. The airline expects to have 802 aircraft by the end of the year, down from an earlier plan for 814 planes.

The Dallas-based airline said the loss, after excluding special items, was 36 cents per share. That was slightly worse than the loss of 34 cents per share that Wall Street expected, according to a FactSet survey.

Revenue rose to $6.33 billion, below analysts' forecast of $6.42 billion.