The 737 MAX 7 is not particularly popular and today’s announcement by Southwest likely won’t help. Just hours after the second 737 MAX 7 fuselage arrived in the Seattle-area for its spot on the assembly line the type got some bad news. Some 23 of the type scheduled for delivery to Southwest Airlines in 2019-2020 are being pushed out 4 years. At the same time, Southwest announced that it will take more MAX 8 aircraft in 2019-2020.
The 2nd 737-7 MAX test Aircraft has arrived at the Tukwila rail yard awaiting its trip over to Renton. Will be delivered to @SouthwestAir after testing & certification is completed. #737MAX pic.twitter.com/xSiYHZXWBj
— Chris Edwards (@AeroimagesChris) January 1, 2018
Southwest also is increasing its fleet investment with its longtime business partner, Boeing, to support future growth opportunities and fleet modernization at favorable economics. The Company exercised 40 Boeing 737 MAX 8 options for 15 firm orders in 2019 and 25 firm orders in 2020, and deferred 23 Boeing 737 MAX 7 firm orders from 2019 through 2021 to 12 firm orders in 2023 and 11 firm orders in 2024. The Company’s 2018 available seat mile growth plans remain unchanged.
Southwest is the largest 737 MAX 7 customer and one of scant few airlines committed to the type. Only WestJet joins it with a significant (20+) airframe order and Boeing has fewer than 60 total orders on its books. Compared to the 4,000+ total 737 MAX aircraft committed that’s a tiny number for the type. It also raises further questions about Boeing’s competitive position with Bombardier with the CSeries. Even with only 300ish aircraft ordered (and some of those, like the 40 for Republic, are unlikely to be delivered) the CSeries is beating the 737 MAX 7 handily in the 100-150 seat market.
Of course, that 50-seat range is a big part of the legal battle between Boeing and Bombardier right now. Boeing sees its now 138-seat version of the MAX7 (it was stretched 2 years ago to add an extra 2 rows/12 seats) as competing directly with the 110-seat CS100. That’s a tough position to support in many ways. Thus far, however, Boeing proved successful in defending that position at various hearings. Bombardier faces a ~300% tariff on the type for US sales assuming the ruling expected in February is against the company.
Header image: Southwest 737 MAX 7 rendering from Boeing
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