Southwest has indicated its readiness to investigate different fleet types in the future to meet its needs and the driver for this is fuel costs. Their famous adherence to the 737 was more appropriate even 20 years ago but in this age, they have a large enough fleet and a large enough network to justify multiple types.
Sticking to one fleet type has its benefits but those benefits don’t grow large when the fleet size expands past a certain point. There is all kinds of debate on how many aircraft you have to have to make it efficient but I would say that for Southwest, a minimum of 60 to 80 aircraft is probably a sweet spot right now. Big enough to make maintenance and handling optimum and big enough to offer flexibility through the network.
Does this mean SWA is going to add more fleet types? No, not necessarily. It means that it is time for them to put together a different fleet plan for the future. If there is one thing I’m certain of, it is that SWA will have 737s for a long, long time. The real question is . . . what kind of 737s?
In addition, SWA still does quite a bit of regional flying on mainline equipment that was efficient with 737s 20 years ago but isn’t nearly so today. One great example of that is the flights from Dallas to places such as Lubbock and Midland and even Little Rock. It might be beneficial for Southwest to identify a new fleet type that is smaller (in the 100 seat range) for maintaining frequency to those destinations but also offering better fuel economy and cost of ownership. And they’ve got choices.
One thing is sure, however: Should SWA pursue a smaller aircraft to standardize on, it won’t be a Boeing or Airbus. They’ve got the 717 coming into the fleet via their Airtran merger and they’ll likely play with that aircraft for several years. However, a 717/737-500 replacement won’t be a Boeing/Airbus aircraft. It will be one of the semi-mainline regional jets being offered by the likes of Embraer and Bombardier most likely. And it will be an aircraft that can be punished with high utilization rates. On the surface, the Embraer E-190 series looks like the best bet to me.
I think their larger, single aisle aircraft will continue to be Boeings and I think that, for the near future, those will be 737s. It is an almost foregone conclusion that they’ll also be pressuring Boeing for a new 737 replacement more and more over the next 2 years. That replacement aircraft is liable to start with roughly the size of a 737-800 and have several larger types above it. Southwest will likely choose to purchase several of the sub-types to meet their needs on various different routes that have wildly different constraints.
This is about fuel efficiency and keeping down the trip costs. Southwest has never had amazing load factors but the kind of load factors they’re experiencing today are historically high and they are unlikely to fall much in the future. They need a larger aircraft than the 737-700 in the future.
In the near future, they’ve got enough differences to work with. This kind of talk is about pushing manufacturers to start considering what to offer airlines such as SWA in the longer term.
Filed under: Airline Fleets by ajax
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