Southwest Delays Delivery on 30 Boeing Jets
Published: May 17, 2012
Southwest Airlines said it has deferred deliveries of 30 Boeing 737-800 aircraft it was to receive over the next two years, aiming to save more than USD$ 1 billion in capital spending.
The airline told a shareholder meeting in Dallas that 20 scheduled plane deliveries from 2013 and 10 from 2014 had been moved to 2017 and 2018.
“Until we hit our return on capital target we don’t plan to grow our fleet,” Southwest chief executive Gary Kelly told the annual shareholder meeting.
Kelly said bookings for May and June were looking good and the airline expected 2012 results to improve over 2011.
“With fuel as the obvious caveat, we have an encouraging earnings outlook for the rest of this year,” Kelly added.
Southwest reported a quarterly loss excluding items for the first quarter, pinched by higher fuel costs. The discount airline’s cost advantage against rivals has narrowed in recent years as big airlines restructured in bankruptcy.
The airline also said on Wednesday that its board raised the quarterly dividend to 1 cent per share from the prior level of less than half a cent, and approved an increase in the company’s share buyback to USD$ 1 billion from USD$ 500 million.