Southwest Air and Boeing Recovery Plans Gain Momentum
Key Points:
* Southwest Airlines (LUV) shares declined 5% due to increased costs overshadowing turnaround progress.
* Higher costs and lower earnings will continue to impact carriers in the near term.
* Southwest CEO Bob Jordan remains optimistic about the company's recovery, buoyed by Boeing's (BA) progress.
* Boeing's production constraints may take years to fully resolve.
* Southwest's all-Boeing fleet benefits from the manufacturer's steady improvement.
* Jordan predicts Boeing's 737 production will exceed targets, reaching up to 55 aircraft this year.
* Boeing CEO Kelly Ortberg anticipates a production pace of 42 737s per month by year-end.
* Southwest's cost-cutting plan and strategic partnerships are on track, supported by strong demand.
* Share prices have increased 8% since Southwest's turnaround plan announcement.