Is Boeing’s BFF looking for a new friend?
Boeing and Southwest Airlines have been best friends for 50 years, but is Southwest looking for a new partner as it looks to expand its fleet?
Southwest Airlines is Boeing’s most important customer. It has more than 700 737s in its fleet, and it has always been a Boeing customer. Southwest was the launch airline for the 737-700 in 1997. It flies an all-737 fleet.
But as Boeing considers a new airplane to fit more than 200 people, Southwest is looking for a plane that only fits 150 passengers. It’s a perfect fix for the Max-7, but Boeing rival Airbus has its own small jet, the A-220, that might fit the bill.
Aviation journal The Air Current suggests that Southwest might make the jump to Airbus, which would be a devastating blow to Boeing.
“The relationship has been strained over the years, with the MAX grounding and a few other incidents before that, which have been very costly, so all is not well in paradise,” said Air Current founder Jon Ostrower to KIRO Nights host Mike Lewis.
At stake in this battle are 300 new airplanes.
“It looks like Southwest is seriously considering opening up a head-to-head competition between the MAX and the Airbus A-220,” Ostrower said.
Boeing and GE, which manufacturers the engines for the MAX, are in discussions with Southwest right now to hammer out this deal, which most believe is still Boeing’s to lose.
“If it goes to this point, gets to a head-to-head competition, the Southwest senior executive that we spoke to for the story and others said that there is a strong chance that Boeing could lose the overall competition,” Ostrower said.
Southwest is also considering whether it’s still a good business model to have one airplane supplier in its fleet. Should that airplane be grounded, Southwest would be in big trouble. Southwest already has 200 MAXs on order, and this 300 airplane order is in addition to that. Ostrower said this deal is essential for Boeing.
“If Southwest bought 300 more 737s today, Boeing would increase its overall backlog of orders for the 737 by almost 10%,” he said.
For a little history, Boeing and Southwest had a similar dance in 2011 as the MAX was being developed. That negotiation ended with Boeing deciding to re-engine the 737 instead of building a new plane, and Southwest stuck with the company.
Boeing is hoping loyalty and long relationships can help win the day.
Listen to the full interview with Ostrower below:
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