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Southwest bolsters MAX order to more than 650 jets in total

written by Hannah Dowling | June 9, 2021
Southwest Airlines Boeing 737-8 MAX, pictured at Las Vegas International (Tomás Del Coro/Wikicommons).

Southwest Airlines has announced it has increased its Boeing 737 MAX 7 order, the smallest variant in the MAX family, by an additional 34 jets.

The US airline said it will exercise options to increase its firm orders on the jet, bringing its total MAX 7 firm orders to 234 aircraft.

Southwest intends to take delivery of 64 of its new 737 MAX 7 jets in 2022, and will see through the delivery of all 234 jets by 2031.

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The airline’s total current orders, including options, for MAX 7 and MAX 8 jets now exceeds 650 aircraft, all due for delivery between now and 2031, as the airline commits to modernising its existing all-Boeing 737 fleet.

Southwest said it made its decision to increase its current MAX order off the back of improving domestic conditions in the US market, with the airline anticipating continued improvement in revenue throughout the summer travel season.

However, the company is not expecting to see a meaningful recovery in business-related travel, which will continue to impact the carrier’s balance sheet.

As it stands, Southwest is anticipating its core cash burn throughout Q2 to be around US$1-2 million per day, down from previous estimates of up to US$3 million.

The airline is also expecting its capital expenditures to total US$1.5 billion, up from a previous estimate of US$700 million.

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But the company said that weak business travel, which has lagged a recovery in leisure demand, would continue to impact its fares in the second quarter.

Earlier this year, World of Aviation reported that Southwest had placed an order for 100 new 737 MAX 7 jets, in the largest MAX deal Boeing has secured since the global grounding order was lifted on the jet in November 2020.

The deal also included options for an additional 155 MAX aircraft.

The airline has reliably flown the original Boeing 737 for nearly five decades.

With a market price of around $100 million per jet, the multibillion-dollar deal is a huge win for Boeing, which has financially struggled with a war on two fronts against the global pandemic, as well as the recertification of its embattled workhorse, the 737 MAX.

In addition to being a huge financial win for Boeing, securing the deal with Southwest also solidified and reinforces the allegiance between Boeing and its largest global customer.

Late last year, the airline touted it may break its all-Boeing tradition, and replace its older 737-700 aircraft with the Airbus A220, as opposed to the 737 MAX 7 – the smallest MAX variant.

Analysts suggested that due to Southwest’s historical support for the 737 program, losing this deal to Airbus would have been a “major disaster” for a planemaker that’s already shrouded in controversy.

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