Overview

• Southwest Airlines reported a third-quarter profit of $193 million, a 30% decrease from the same period last year. The drop in profit is attributed to higher labor and fuel costs, with labor costs increasing by over 17%.
• The airline will slow its growth in 2024 to improve profit margins, reducing its growth rate from a predicted 16% for the first quarter to a range of 10% to 12%. Full year growth for 2024 is expected to be between 6% and 8%.
• Southwest has renegotiated its aircraft order with Boeing, securing the delivery of 80-90 new 737 Max jets per year through 2031. This includes the addition of 108 737 Max 7 jets, which will allow Southwest to retire some of its older, less efficient planes.
• Southwest will shift most of its Caribbean flights from Fort Lauderdale to Orlando in 2024. This move is likely prompted by intense competition with Spirit and JetBlue in Fort Lauderdale.
• The airline has reached a tentative new contract agreement with the union representing its 18,000 flight attendants. However, Southwest, unlike its three major rivals, has not finalized an agreement with its pilots, who represent a significant portion of its labor costs.