Southwest Airlines CEO: 'We need Boeing to be better'

Yahoo Finance
2024-10-29

The ongoing labor strike at Boeing (BA) is beginning to tax its biggest airline customers.

As the labor dispute between Boeing and the International Association of Machinists (IAM) union enters its seventh week, airline executives are eager for updates.

"Boeing has been a great partner for the whole 53 years of Southwest Airlines," Southwest Airlines CEO Bob Jordan told Yahoo Finance on Monday. "But we need Boeing to be strong. We need Boeing to be better."

Negotiations between Boeing and IAM have halted production for Boeing's most profitable large plane orders, leaving Southwest (LUV) waiting for aircraft. Southwest exclusively uses Boeing planes in its fleet.

"We started the year expecting more than 80 aircraft, and we'll get 20 this year," Jordan said. "And with the strike lingering on, you know, it looks like 2025 could be affected as well."

The stoppage has forced airlines to update their flight schedules and increase maintenance to maximize the longevity of their existing fleets.

Jordan said that Southwest planned for the strike to last four to six weeks. As the strike continues beyond that timeline, he continued, it's likely to put pressure on the airline going into next year.

“I've been in close contact with Boeing, including over the weekend," Jordan said. "And again, I'm looking forward to them getting back on track and becoming reliable in terms of the deliveries because at the heart of an airline is the flight schedule, and the flight schedule depends on getting your aircraft on time."

Other airlines are also navigating Boeing delays. During its third quarter earnings call, United Airlines (UAL) addressed questions about its exposure to the aircraft manufacturer.

"I'm certain that all of the folks that are out on the picket line now, along with the management team, all share a desire to make Boeing great and be part of a great company that’s one of the most important companies in the world, and so they’ll ultimately work through this," United Airlines CEO Scott Kirby said on the call.

United executives went on to acknowledge short-term changes to its flight schedule caused by the Boeing strike.

A Southwest Airlines plane moves to depart from Love Field in Dallas on July 25, 2024. (AP Photo/LM Otero, File)
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Delta Air Lines (DAL) doesn't expect to receive its first Boeing 737 Max-10s until 2026, though Delta's aircraft delivery schedule is not as exposed to Boeing as other airlines.

Through it all, top executives from Delta Air Lines said of Boeing they "wish them well."

Union negotiations are "not just challenging, they get to be very emotional and very draining," Delta Air Lines CEO Ed Bastian told Yahoo Finance. 

"Hopefully, cooler heads will prevail, and both sides will be able to strike a fair deal here," Bastian added.

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