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737 Max

It Looks Like Southwest May Break up With Boeing

It Looks Like Southwest May Break up With Boeing
Jeff Edwards

Southwest Airlines CEO Gary Kelly told CNBC that he has been directed to consider other aircraft suppliers following the grounding of the Boeing 737 Max earlier this year. Kelly said the company will, starting early next year, review the wisdom of the airline’s 48-year-long history of flying only Boeing-made aircraft.

Speaking on CNBC on Thursday, Southwest Airlines CEO Gary Kelly left open the possibility that the airline could, for the first time in its 48-year history, seek aircraft other than Boeing-made planes for its fleet. Kelly admitted that he has been instructed by his board of directors to consider other aircraft suppliers in the near future.

Southwest is famed for operating a fleet comprised entirely of Boeing 737 planes, but Kelly said it was at his suggestion the company will review its decades-long exclusive relationship with the U.S. aviation giant. Kelly said any decision about diversifying aircraft suppliers will not come until a thorough review of the benefits and costs of the current arrangement is undertaken next year.

“We’re not happy about our situation,” Kelly told the hosts of Squawk on the Street. “We put our future in the hands of Boeing in the Max and we’re grounded. I want to settle with Boeing to settle our damages.”

Southwest Airlines was the launch partner for the Boeing 737 Max when the plane debuted in 2017 and the airline has a higher percentage of Max aircraft in its fleet than any other single carrier. The company currently counts 34 grounded 737 Max in its fleet and the company is owed an additional 75 Boeing 737 Max aircraft by the end of next year.

Kelly noted that Southwest has no intention of operating either smaller or substantially larger jets in its fleet, adding that the airline is committed to flying single-aisle passenger jets. This means that the carrier would likely have to look to aircraft with similar specs produced by Boeing arch rival Airbus.

Kelly said that the grounding of the 737 Max fleet has cost the company upwards of $200 million in the third quarter alone, but he cautioned that reconsidering the wisdom of flying one type of aircraft produced by a single manufacturer is a prudent decision regardless of the current situation involving the grounded 737 Max. He insisted that this is by no means the first time in the airline’s history that management has considered ending its exclusive relationship with Boeing.

“I certainly don’t think it is irreparable,” Kelly said of Southwest’s partnership with Boeing. “I stand by my belief that Boeing is a great company with great people, has done great things for our country and our economy and should have every opportunity to put this behind them.”

Kelly also noted that there are some compelling reasons to maintain the status quo with an all-Boeing fleet. He noted that in addition to cost and efficiency savings, there are important safety considerations as well. He explained that because all of the airline’s pilots are “experts on the 737,” Southwest is “arguably “the safest airline in the world.”

Is Southwest seriously ready to consider abandoning Boeing and looking to European aircraft manufacturer Airbus for the first time in the airline’s history? Southwest frequent flyers are ready to call the CEO’s bluff right now in the Southwest Airlines Rapid Rewards forum

View Comments (6)

6 Comments

  1. caljn

    October 29, 2019 at 11:55 am

    It’s rather sad what current management of Boeing has done to the reputation of a once iconic American brand. (Much like the country.)

  2. edgewood49

    October 30, 2019 at 3:31 pm

    You know Jeff I saw that interview on CNBC and there was no hint of SW intention of changing planes. He did state what when asked
    what would Herb” say or do his answer was I was there when he made these decisions and we will continue to evaluate our fleet the bringing of each year. While I am as %$#@$#@$ off as many flyers out there let’s not bury Boeing just yet.

    Just saying

  3. Jackie_414

    October 30, 2019 at 4:37 pm

    How many Southwest Airlines flights on 737 Max’s were flown before the Lion Air Crash? How many Southwest Airlines flights on 737 Max’s were flown between the Lion Air Crash and the Ethiopian Air crash? Not one crash of any of those Southwest flights!

    Does Boeing have an issue? Yes it does and the company is fixing that issue. But it clearly is not the only, even major, issue. Pilot training, experience, and intuition is a huge factor here. I would definitely get on a 737 MAX flown by any US based airline. I would never, ever get on any aircraft, let alone a 737 MAX, flown by Lion Air or Ethiopian Air, as well as a lot of other airlines.

    In my humble opinion, too many airlines in the world are hiring undertrained, inexperienced video game players to pilot aircraft.

  4. Tommymac

    October 30, 2019 at 10:58 pm

    Unfortunately for Southwest, Airbus A320 production is sold out for several years, so it is a long term threat. If Boeing can get their act together and get the 737 Max flying again I’m sure that SW will be getting a very good deal on deliveries.

  5. peterk814

    October 31, 2019 at 5:05 pm

    Speak for yourself @caljn. I’m proud of the US

  6. chrisfwm

    November 7, 2019 at 10:49 am

    proud? of what? ignorance? racism? xenophobia? deplorable?

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