South-west (LUV) is reportedly in negotiations with Boeing (BA) and General electrical (GE) for a potentially large Max 737 order, while the carrier seeks to renew its fleet. Boeing shares fell.
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Air Current reported on Thursday that Southwest employees were already in initial negotiations with Boeing and CFM International, the jet engine joint venture between GE Aviation and European Safran, for 300 planes.
Boeing could lose a deal, the Air Current report said, since Southwest already flies exclusively with the 737 and is Max’s largest customer.
But if negotiations are interrupted due to an engine problem, Southwest can open a face-to-face competition with Airbus (EADSY) and its A220s. Raytheon Technologies‘(RTX) Pratt & Whitney manufactures the engines of the A220.
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Boeing Stock
Southwest shares were up 0.3% to close at 51.42 in the stock market today. Boeing shares fell 0.6% to 210.66, consolidating on a heart base with a buying point of 244.18. GE added 0.5% and the main supplier Max 737 Spirit AeroSystems (SPR) lost 0.4%.
Boeing desperately needs new orders for its 737 Max jet, after losing more than 1,000 orders as a result of two fatal accidents and the coronavirus pandemic.
Meanwhile, Southwest wants new jets to add to its entire Boeing 737 fleet. The airline has suggested buying a non-Boeing plane, but the decimation of air travel by the coronavirus pandemic has changed its takeover process decision-making.
During Southwest’s third-quarter call earnings in October, Chief Operating Officer Mike Van de Ven said the carrier will decide next year or later whether to buy more Boeing 737 Max-7 jets, the smallest in the family, or choose Airbus A220s. Deliveries would begin in 2025.
Follow Gillian Rich on Twitter for aviation news and more.
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