DALLAS — American Airlines and Southwest Airlines both posted losses in the first quarter, and Southwest Airlines said Thursday it would limit hiring and close operations at four airports.
Southwest Airlines expects to end this year with 2,000 fewer employees than at the beginning of the year.
Airlines are grappling with rising labor costs and delays in acquiring new planes from Boeing Co., limiting their ability to add flights at a time of high travel demand.
American Airlines said it lost $312 million as labor costs rose 18%, or nearly $600 million. The company said it expects to return to profitability in the second quarter, during the peak travel season, with earnings per share of $1.15 to $1.45. Analysts expected $1.15 per share, according to FactSet.
Excluding special items, the company’s first-quarter loss was 34 cents per share, worse than analysts’ expectations of a loss of 27 cents per share.
Sales were $12.57 billion.
Southwest Airlines said it would lose $231 million, limit hiring, place employees on voluntary leave and suspend flights to Cozumel, Mexico and four airports in Mexico. Syracuse, New York. Bellingham, Washington. At Houston’s George Bush Intercontinental Airport, the airline’s primary operations are at the smaller Hobby Airport.
Chief Executive Officer Robert Jordan said the airline was acting quickly to “cope with the financial downturn” and deal with delays in the delivery of new aircraft from Boeing Co.
The company plans to have 802 aircraft in its fleet by the end of the year, down from the 814 originally planned.
The Dallas-based airline said its loss, excluding special items, was 36 cents per share. That was slightly worse than the 34 cents per share loss that Wall Street was expecting, according to a FactSet poll.
Revenue rose to $6.33 billion, below analysts’ expectations of $6.42 billion.
