Southwest Airlines firms twenty-six 737 MAX options
Southwest Airlines (WN, Dallas Love Field) has firmed a further twenty-six Boeing MAX options including twenty-one B737-7s and five B737-8s, for deliveries in 2022 and 2023.
The carrier said in its annual results that, in total, it converted twenty-two B737-7 options during the fourth quarter of 2021. However, this number includes eight options firmed on October 1, 2021, and reported previously in Southwest’s third-quarter earnings. The newly announced 14 firmed orders are for delivery this year.
On January 1, 2022, the LCC firmed a further seven B737-7 and five -8 orders. All twelve aircraft are due to arrive in 2023. Southwest Airlines said that including the conversions on January 1, its total unfilled MAX commitment comprises 271 B737-7s and 135 -8s. Currently, the airline operates sixty-nine -8s, the ch-aviation fleets advanced module shows.
The LCC plans to take its first seventy-two -7s in 2022. However, it admitted that based on information from Boeing, it expects to induct the -7 by early 2023.
“Boeing is telling us that they’re targeting type certification for the MAX 7 by the end of the first quarter. Of course, that’s contingent on the FAA review process, which is a little bit different for airplanes after the MAX grounding. Once they get that type certificate, it will take us about seven months to be able to bring that airplane on our operating certificate… We may not be flying the MAX 7 until early 2023,” President and Chief Operating Officer Mike Van de Ven said during an earnings call.
Southwest Airlines also plans to take five -8s in 2022.
The airline still has 226 options for B737 MAX for aircraft that will deliver between 2022 and 2027, if confirmed. Thirty-seven of these options are potentially due for delivery in 2022. Southwest Airlines said it plans to firm all of them going forward.
“While our plan assumes we will exercise the remaining 37 options this year, we maintain the flexibility to evaluate that intention as decision points arise. We continue to believe that taking the additional options this year will yield a positive net present value on aircraft replacement if we don’t deploy them in the network,” Chief Financial Officer Tammy Romo said.
The airline’s previous-generation fleet includes 460 B737-700s and 207 B737-800s.
Having selected the B737-7 to replace its B737-700s in March 2021, Southwest Airlines has steadily been growing its order book for the type.