A Southwest Airlines jet will land at Midway International Airport in Chicago, Illinois on January 28, 2021. (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 a record $ 11.9 billion loss in 2020 amid a pandemic, 737 MAX battle
Southwest Airlines is Boeing’s primary customer. It has more than 700 737s in its fleet and has always been a Boeing customer. Southwest was the launch airline for the 737-700 in 1997. It flies a fleet of all 737.
But since Boeing is considering a new plane that can accommodate more than 200 people, Southwest is looking for a plane that can only accommodate 150 passengers. It’s a perfect solution for the Max-7, but Boeing rival Airbus has its own little jet, the A-220, that might just fit.
Aviation Journal The airflow suggests Southwest could make the jump to Airbus, which would be a devastating blow to Boeing.
“The relationship has been tense over the years, with the MAX grounding and a few other incidents before that being very expensive, so things aren’t going well in paradise,” Jon Ostrower, founder of Air Current told KIRO Nights host Mike Lewis.
In this battle, 300 new planes are at stake.
“Southwest appears to be seriously considering entering into direct competition between the MAX and the Airbus A-220,” said Ostrower.
Boeing and GE, which produce the engines for the MAX, are currently in talks with Southwest to close this deal, which most say is still to be lost by Boeing.
“When it comes to that, it will come to a head-to-head match, the Southwest senior executive we spoke to for the story and others said there is a high chance Boeing would lose the overall competition,” said Ostrower.
Southwest is also considering whether it is still a good business model to have a single aircraft supplier in its fleet. If that plane were to land, Southwest would be in serious trouble. Southwest already has 200 MAXs on order, and this 300 airplane order is on top of that. Ostrower said this deal is essential for Boeing.
“If Southwest purchased 300 more 737s today, Boeing would increase the total order book for the 737 by nearly 10%,” he said.
For a bit of history, Boeing and Southwest had a similar dance in 2011 when the MAX was developed. That negotiation ended when Boeing decided to re-motorize the 737 instead of building a new plane, and Southwest stayed with the company.
Boeing hopes that loyalty and long-term relationships can help win the day.
Listen to the full interview with Ostrower below:
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