Southwest Airlines bumps B737 MAX 7 order book

Southwest Airlines (WN, Dallas Love Field) has firmed thirty-four B737-7 options, with deliveries scheduled for 2022. The low-cost carrier said in a stock market disclosure that it converted two options originally scheduled for potential delivery in 2022, and a further 32, which concerned deliveries in later years that have now been brought forward to 2022. The conversion has increased Southwest’s B737 MAX 7 order backlog to a total of 234 units, with deliveries due to begin from 2022 and run through 2030. The LCC plans a quick ramp-up of the variant’s fleet since as many as 64 deliveries are scheduled for 2022. Southwest also adjusted and accelerated its unconfirmed options for B737 MAX aircraft, which can be exercised as orders for either B737-7s or B737-8s. Having added 32 new options, it currently holds 268 options for potential deliveries between 2022 and 2027. It holds no options for deliveries beyond 2027 at this time. “[Southwest[ now expects its contractual aircraft capital spending to be approximately USD1.5 billion in 2022, compared with its previous guidance of approximately USD700 million. Fleet and capacity plans will continue to evolve as the Company manages through this recovery period, and it will continue to evaluate its remaining 40 MAX options in 2022. The Company continues to plan to retire 30 to 35 of its B737-700s aircraft annually, on average, over the next 10 to 15 years; however, with its cost-effective order book, the Company retains significant flexibility to manage its fleet size, including opportunities to accelerate fleet modernization efforts if growth opportunities do not materialize,” the LCC said. The new announcement did not alter its existing MAX 8 order book. Southwest has so far taken 67 of these aircraft and expects to add one more unit from Boeing this year and a further 130 -8s between 2026 and 2031. There are no -8s deliveries planned between 2022 and 2025. Southwest Airlines is by far the world’s largest B737-7 customer. Including the newly converted options, Boeing has thus far garnered 280 firm orders for the variant, including 234 from Southwest and the remainder from WestJet (13), Ruili Airlines, SkyUp Airlines (two each), and undisclosed customers (19).