Southwest Airlines (NYSE:) shares fell more than 6.7% in premarket trading Tuesday after the low-cost carrier announced it would cut capacity and adjust flight schedules, primarily for the second half of 2024.
The decision is a response to ongoing problems at Boeing (NYSE:) and uncertainty over aircraft delivery times, the company said.
Boeing updated its delivery forecast, advising the airline to expect to take delivery of 46 737-8 aircraft in 2024, down from the 79 737 MAX aircraft originally expected.
“Southwest does not currently anticipate deliveries of 737-7 aircraft and continues to anticipate that no MAX-7 aircraft will enter service this year based on the current certification status,” the airline said.
The company estimates that the move “will likely result in a reduction of at least one point from the company’s 2024 capacity plan on an annualized basis.”
Consequently, the company is also revising its entire 2024 guidance, including capital expenditure guidance.
The Company intends to issue revised full-year 2024 guidance concurrently with the announcement of first-quarter 2024 financial results on April 25, 2024.