Southwest Airlines (WN, Dallas Love Field) is evaluating both the A220-300 and B737-7 ahead of an order and deliveries which are due to start around 2025.
"We need the airplane... coming in around that 2025 period. So, obviously, we'd have to make a decision before that. So within the next year or so, we're going to have to narrow in on what we're going to go do there and weigh all the pros and cons... We need to spend the next year or so, really getting into a deep dive on all of those kinds of things and then coming up with the decision," Chief Operating Officer Mike Van de Ven said during the carrier's quarterly earnings call.
Van de Ven reiterated a concern previously raised by the carrier about adding the A220, which would mark its first-ever departure from a single-family fleet. In contrast, the B737 MAX 7 would be consistent with Southwest's long-running commitment to Boeing aircraft.
He stressed that Southwest "definitely" needed 140-150-seat narrowbodies to replace its fleet of 492 B737-700s, which are 16.3 years old on average, according to the ch-aviation fleets module. The low-cost carrier has thirty B737 MAX 7s on firm order from Boeing but would need a significantly larger number of aircraft of this gauge.
"We absolutely still need the smaller airplane prospectively. We have a ton of B737-700s that are coming up for retirement over the next five to 10 years. And we will absolutely want to replace them, but we're certainly not thinking that we want all 175-seaters," Chief Executive Gary Kelly added.
Kelly said that while the ratio of smaller and larger narrowbodies was hard to predict at this time, Southwest would look at a roughly 50/50 split between the two sizes in its fleet going forward. Currently, it has more than twice as many -700s as it does B737-800s (of which it operates 207).
Van de Ven underlined that there were no other types in contention in this segment.
However, the LCC's priority in terms of its fleet strategy is the ungrounding and the resumption of deliveries of its B737-8s. Southwest took 35 units before the March 2019 grounding and has another thirty-four B737 MAX (including the first -7s) ready for delivery once recertification takes place.
Chief Financial Officer Tammy Romo underlined that while Southwest agreed with Boeing earlier this year to limit the number of new B737 MAX delivered through the end of 2021 to a maximum of 48, it was "certainly safe to say that we do not need 48 aircraft next year, at least for growth". However, she said that a new delivery schedule has yet to be agreed on but did not go into further details at this time.
In unrelated network news, Southwest Airlines announced that it would launch services to Chicago O'Hare and Houston Intercontinental in the first half of 2021, complementing its existing well-developed network at Chicago Midway and Houston Hobby. It said that details of routes, schedules, and timelines would be announced in due course.
