His statement, “I would not be surprised if our orders from Boeing in ’25 are lower than we initially thought,” suggests that Southwest anticipates receiving fewer aircraft than Boeing now projects.
Delays are the result of repeated setbacks at Boeing, including a January event in which a door-sized piece separated from a 737 MAX while in flight. As a result, Southwest had to lower its 2023 plane delivery to 20 jets, down from its original aim.
Southwest’s 2025 order book originally included 86 aircraft, however, the airline has decreased that number to 73. Jordan stated that Southwest’s forecasts called for a four- to five-week strike.
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Nonetheless, the walkout lasted more than seven weeks, and Boeing now faces a 30- to 60-day recovery period before returning to normal production.
Jordan anticipates Boeing’s production limits to endure until 2024. Should production continue to decline, Southwest might need to adjust its capacity to operate.Â
Southwest intends to increase flying capacity by only 1% to 2% per year over the next three years as it restructures its business model to address financial concerns. The airline plans to sell older planes if demand declines, but it is still committed to receive all scheduled jets until 2031.Â
Jordan told Bloomberg, “Every aircraft on the order book has a lot of value.” “If we no longer require them, we will sell vintage airplanes into the market.”Â
Voluntary Separation Scheme.
By offering voluntary separation to workers in ground operations, cargo, and provisioning, Southwest Airlines is addressing overstaffing at some airports. The overstaffing, caused by aircraft delivery delays, affects roughly 20 major airports and certain roles at Southwest’s headquarters.
The aviation analyst Jon NYC was the first to disclose the staffing changes. The voluntarily discontinued program, VSP 24, was put in place to realign personnel with the airline’s lower capacity due to delayed aircraft deliveries, according to a staff update from Vice President of Ground Operations Chris Johnson and Vice Presidents Cole McGuire and Wally Devereaux.Â
The VSP 24 applies to both contractual and non-contracted staff, including customer service agents, ramp agents, cargo agents, and provisioning agents, as well as jobs such as operations agents, assistant supervisors of operations, ramp supervisors, managers, and provisioning supervisors.Â
As the airline continues to adjust its workforce, Southwest plans to eliminate more than 300 pilot and flight attendant positions in Atlanta by April 2024, which aligns with this independent contractor campaign. to match current demand levels.
Elliott Investment Management, a key stakeholder with a 10% stake in Southwest, is also pressuring the airline to improve its revenue. In response to Elliott’s request, Southwest recently reorganized its board, appointing Rakesh Gangwal, a co-founder of IndiGo (6E), India’s low-cost airline, as its new independent board chair.Â
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