Southwest Airlines forces to scale back hiring plans after Boeing's aircraft delays

Southwest Airlines says it is cutting its hiring targets for this year due to delays in the delivery of new aircraft from Boeing, the carrier's CEO, Bob Jordan, said on Thursday.

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Southwest Airlines, based in Dallas, expects that it will receive just 70 new 737 Max planes from Boeing this year instead of the previous forecast of 90. This will result in a reduction in capacity growth plans by one percentage point, Southwest Airlines said in its quarterly filing.

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The Southwest Airlines Company is one of Boeing's best customers, operating a fleet of all Boeing 737 jetliners. The company has placed orders for 564 Boeing 737 Max planes through the end of the decade, according to its quarterly report. They are fuel-efficient aircraft, so in addition to replacing older jets, they will help the company grow as well by increasing its efficiency.

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Following the company's quarterly report, Jordan told Trade Algo that the company already had plans to hire 7,000 people this year, but would need to "moderate" those plans now.

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It is unknown how much reductions in hiring plans the company will have to make, and the company did not respond to a request for more details.

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There have been a number of delays in deliveries over the past few months, and Jordan said the company is attempting to be "prudent" about its expectations.

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"You plan way in advance for set up your schedules, when you set up your capacity, and you're mistaken in what you think you are doing. It is just really hard to change that close in," Jordan told Trade Algo in an interview.

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The Boeing Company announced on Wednesday that it plans to increase production of its 737 Max planes from their current rate of about 31 a month to 38 a month by the end of the year, a long-planned increase that was delayed by supply chain issues and the shortage of labor.

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It is also worth noting that American Airlines CEO Robert Isom also complained about delivery delays when the rival airline reported its quarterly results on Thursday.

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"Both Boeing and Airbus have a responsibility to do better on a number of fronts, and they need to do it soon," Isom said following the publication of that report on Trade Algo. "Whenever we do not receive a delivery on time, guess what happens? There is a flight cancellation and we are going out. There are thousands of customers affected by that."

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“They need to be held accountable for what they've done,” Isom said.