A Southwest Airlines jet lands at Midway International Airport on January 28, 2021 in Chicago, Illinois. (Photo by Scott Olson / Getty Images)
Boeing and Southwest Airlines have been best friends for 50 years, but is Southwest looking for a new partner to expand its fleet?
Boeing reports record $ 11.9 billion loss in 2020 amid the pandemic, 737 MAX struggle
Southwest Airlines is Boeing’s most important customer. It has more than 700 737s in its fleet and has always been a customer of Boeing. Southwest was the airline that launched the 737-700 in 1997. It flies with a fleet of 737 only.
But, as Boeing considers a new plane for more than 200 people, Southwest is looking for a plane that accommodates only 150 passengers. It’s a perfect solution for the Max-7, but Boeing’s rival, Airbus, has its own small jet, the A-220, that can fit the bill.
Aviation Newspaper The Air Current suggests that Southwest could make the leap for Airbus, which would be a devastating blow for Boeing.
“The relationship has been tense over the years, with the MAX aground and a few other incidents before that, which were very expensive, so all is not well in paradise,” Air Current founder Jon Ostrower told KIRO Nights presenter Mike Lewis.
At stake in this battle are 300 new planes.
“It seems that Southwest is seriously considering opening a face-to-face competition between the MAX and the Airbus A-220,” said Ostrower.
Boeing and GE, which make the engines for the MAX, are in talks with Southwest now to close this deal, which many believe is still something for Boeing to lose.
“If it gets to this point, it gets to a face-to-face competition, the Southwest senior executive we spoke to for the story and others said that there is a big chance that Boeing will lose the overall competition,” said Ostrower.
Southwest is also considering whether it is still a good business model to have an aircraft supplier in its fleet. If that plane lands, Southwest would be in trouble. Southwest already has 200 MAXs on order, and this order for 300 planes is an addition. Ostrower said this deal is essential for Boeing.
“If Southwest bought another 300 737 today, Boeing would increase its overall order book for the 737 by almost 10%,” he said.
For a bit of history, Boeing and Southwest had a similar dance in 2011, when MAX was being developed. That negotiation ended with Boeing’s decision to remodel the 737 instead of building a new plane, and Southwest remained with the company.
Boeing hopes that loyalty and long-term relationships will help win.
Listen to the full interview with Ostrower below:
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