Shares of Southwest Airlines (NYSE:LUV) dropped more than 6.7% in premarket trading Tuesday after the low-cost carrier announced it will cut capacity and adjust schedules, mainly for the latter half of 2024.
This decision is in response to ongoing issues at Boeing (NYSE:BA) and uncertainties in aircraft delivery timelines, the company said.
Boeing has updated its delivery forecast, advising the airline to anticipate receiving 46 737-8 aircraft in 2024, marking a decrease from the initially expected 79 737 MAX jets.
"Southwest now assumes no 737-7 aircraft deliveries and continues to assume no MAX-7 aircraft are placed into service this year based on the current certification status," the airline said.
It estimates the move “will likely result in at least a one-point reduction to the Company's full-year 2024 capacity plans on a year-over-year basis.”
Consequently, the company is also reassessing its entire 2024 full-year guidance, including capital expenditure forecasts.
It intends to release revised full-year 2024 guidance alongside its first quarter 2024 financial results announcement on April 25, 2024.