American Airlines and Southwest Airlines both reported losses in the first quarter of the year. Southwest announced measures to limit hiring and close operations at four airports, aiming to end the year with 2,000 fewer employees than at the beginning.
The airlines are grappling with increased labor costs and delays in receiving new planes from Boeing, impacting their capacity to expand flights amid high travel demand.
American Airlines disclosed a loss of $312 million, citing an 18% rise in labor costs, equivalent to nearly $600 million. They anticipate returning to profitability in the second quarter and foresee earnings per share between $1.15 and $1.45.
Southwest reported a loss of $231 million and outlined plans to curtail hiring, offer voluntary time off, and suspend operations at airports including Cozumel, Syracuse, Bellingham, and George Bush Intercontinental Airport.
Both airlines are adjusting strategies to cope with financial challenges and delays in fleet expansion, aiming to optimize operations in a recovering travel market.
