American and Southwest airlines both say they lost money in the first quarter, and they're responding by trying to cut costs.
DAVID KOENIGSouthwest Airlines is reducing service out of O'Hare Airport this summer, due to less planes from Boeing. Flights at Midway will be less affected.Southwest Airlines will limit hiring and stop flying to four airports as it copes with weak financial results and delays in getting new planes from Boeing.Both Southwest and American Airlines reported first-quarter losses Thursday.
The moves will help the airline focus on more profitable locations and deploy a fleet of planes that will be smaller than it had planned. Southwest said it expects to get only 20 new 737 Max 8 jets from Boeing this year, down from the 46 it expected just a few weeks ago. It will offset some of the shortage by retiring fewer planes.
Revenue rose to $6.33 billion. That was a company record for the January-March quarter, but it was below analysts' forecast of $6.42 billion and not enough to overcome rising expenses including a 19% jump in labor costs. Last-minute leisure trips were lower than expected, and some newer markets performed poorly, the airline said.
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.CEO Robert Isom said American is less impacted by Boeing's problems because the airline had already received hundreds of new planes in recent years. The airline said eight Boeing jets it expected to get won't show up this year as planned.
American Airlines Posts 1Q Loss As Well
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