Boeing sales unfreeze but they’re still well below normal
Boeing reported a minor bounce back in sales in February after orders ground essentially to a halt in January following the Alaska Airlines door plug incident.
The troubled aircraft maker reported 15 commercial jet orders in the month. That’s a rebound from just three jet orders in January. But the company also had three canceled orders in January, giving it zero net orders for that month, the worst month for sales in years.
The news wasn’t all good: One of Boeing’s largest customers, Southwest, disclosed Tuesday it now expects its deliveries from Boeing to be down more than 40% from what it had planned to accept over the course of the year. That’s due to ongoing safety and quality questions about Boeing’s production line raised by the door plug incident on a January 5 Alaska Air flight that left a gaping hole in the side of the plane. Because of that, the total capacity of seats Southwest sells during the course of the year will be 1 percentage point less than it originally expected, the airline said.
Despite the challenges, Southwest CEO Bob Jordan signaled Southwest is not keen on adding planes from the other major airline manufacturer — Airbus — to its fleet. That move would be an enormous change for Southwest, which exclusively flies the Boeing 737 and in 2011 became Boeing’s first customer for the jet’s latest generation, the Max.
Southwest is making adjustments for the year. Jordan said Tuesday that the company is halting the hiring of pilots and flight attendants due to Boeing’s expectation to deliver far fewer planes to Southwest than expected this year.
“This is not business as usual,” Jordan said at a conference organized by JP Morgan. “We’re being very aggressive in controlling what we can control.”
The hiring cuts mean Southwest will hire about 50% fewer pilots and 60% fewer flight attendants than planned this year. New hire classes for both types of employees will stop in April. After growth fueled by the post-pandemic air travel recovery, Jordan said Southwest now expects to end the year “solidly down” in employee headcount.