Southwest just placed a landmark multibillion-dollar order for 100 of Boeing's smallest 737 Max plane
- Southwest Airlines just placed an order for 100 Boeing 737 Max 7 aircraft with options for 200 more.
- The $10 billion deal is a victory for Boeing over Airbus and its A220 aircraft that was reportedly being considered.
- The first 30 737 Max 7 aircraft are scheduled for delivery in 2022.
Southwest Airlines has settled on the Boeing 737 Max 7 as the successor of its Boeing 737-700 fleet, announcing a finalized order with the manufacturer on Monday for 100 aircraft and options for 155 more.
The deal brings Southwest's new Boeing 737 Max order total to 349 aircraft consisting of 200 of the smaller Max 7s and 149 of the larger Max 8s, some of which are already flying passengers. An additional 270 Max aircraft of either variety are also available to Southwest, on option, between 2021 and 2031.
Boeing's current list prices value the 100 aircraft at around $10 billion. Airlines, however, rarely pay list price and Boeing has been known to discount Max aircraft as a result of the grounding.
Whatever Southwest did pay, however, Boeing can declare victory over Airbus as the European manufacturer's A220 aircraft was reportedly being considered by Southwest to be the replacement aircraft. Delta Air Lines and JetBlue Airways had alternatively chosen the Airbus aircraft, which boasts similar characteristics and cost savings when compared to the Max 7.
But Southwest's decision comes as no surprise since the 737 Max 7 is the next-generation variant of the 737-700 that it's replacing at Southwest and the airline doesn't have to worry about inducting another manufacturer's aircraft into its already streamlined fleet. Pilots already flying the 737 and 737 Max can fly the Max 7 with very little additional training and the same goes for mechanics tasked with servicing the fleet.
"This cost-effective order book with Boeing allows the company to maintain the operational efficiencies of an all-Boeing 737 fleet to support its low-cost, point-to-point route network," Southwest said in a statement.
Southwest resumed flying the Boeing 737 Max on March 11 after an absence of nearly two years following the aircraft's March 2019 grounding. By the end of April, as many as 261 Southwest Max flights will be flown daily, according to Cirium data.
The smaller Boeing 737 Max 7 has yet to be certified by the Federal Aviation Administration as of mid-March, according to Reuters, a process delayed due to the aircraft's grounding. Boeing had initially planned to certify the aircraft in 2019 after its first flight in 2018.
But FAA Administrator Steve Dickson, a former airline pilot, personally flew the aircraft during the recertification trials for the Max following its March 2019 grounding. Southwest is slated to be the first airline to fly the Max 7 with the first delivery scheduled for 2022 after its certification.
The Max 7 can seat as many as 172 passengers, according to Boeing, while flying the furthest of any Max variant thanks to its smaller size. Any route in Southwest's current network can be flown by the Max 7 and new ones can be forged.
With a range of 3,850 nautical miles, city pairs like Denver-Honolulu, Boston-Anchorage, and even New York-London are possible should Southwest want to stretch the aircraft's legs. The competing Airbus A220-300 boasts only a 3,400 nautical mile range and maximum seating of 160 passengers, according to Airbus.
Southwest will end 2020 with 729 aircraft, 68 of which are Boeing 737 Max 8s.