Southwest launches 737-8, bypasses 737-7 for now

Here is an article we did yesterday for Flightglobal Pro’s subscription service.

The Southwest Airlines order on 13 December launching the 737 Max programme is a launch of the -8 version. The carrier, which has substitution rights between the -7 and the -8, has chosen to bypass the -7 for now.

Brian Hirshman, SVP Technical Operations, told Flightglobal Pro on 15 December that the carrier is up-gauging its fleet, which it began doing this year with acquisition of the 737-800 for the first time. Southwest, throughout its history since is 1971 birth, has relied on the 737-200/300/500/700, preferring smaller sized aircraft and high frequency as its business model.

As the carrier expanded into congested and slot controlled airports and as fuel prices went up, the extra capacity and lower seat mile costs of the larger -800 prompted a change from Southwest’s long-standing practice of buying only the -700 variant.

Hirshman said Southwest by-passed the 737-7 even though it is larger than the Boeing 717 it is inheriting from the acquisition of AirTran. The 717 will seat 117 passengers in Southwest’s configuration when the two airlines are integrated. At the press conference announcing the order, Southwest’s officials said they are prepared to operate the 717 the full lease terms to the end of this decade and into the next. But they also said they will be talking to Boeing about these airplanes’ future.

Hirshman told Flightglobal Pro that Southwest evaluated the Bombardier CSeries early on but it was too small to make the final cut. The Airbus A320neo received serious consideration and was not used as a bargaining chip, he said.

“We gave it a very, very serious look, closer than we had ever looked at Airbus,” Hirshman said. “We spent a lot of time understanding how it would perform our missions. At the end of the day we decided Max better fit our profile. We did not use [Airbus] as a negotiating tactic. We were dead serious. The neo is a good product.”

An independent consultant with knowledge of the competition told Flightglobal Pro that Airbus came closer to winning the order than people realize.

Southwest, during its press conference, cited 737 Max fuel savings figures of 10-11% compared with Boeing’s oft-stated target of 10-12%. Hirshman said Southwest’s analysis for the 737-7 and 737-8 concluded the former figures are “good numbers.”

Hirshman also said Southwest’s analysis supported the CFM and Boeing statements that a 68 inch fan for the LEAP engine is optimal for the 737, despite the very public argument set forth by Airbus that the 737 LEAP’s smaller fan compared with neo’s 78 inch LEAP engine won’t be as efficient.

“We spent a tremendous amount of time to understand the differences,” Hirshman said. “Sixty eight does appear to be optimal size for the airplane. There is this illusion that bigger is better. We actually agree with Boeing and CFM.” The customized core will make the difference, Hirshman said. The core will be standard LEAP architecture and design but will be specifically designed for the 737 Max.

Nonetheless, in evaluating the A320neo, which is powered by another version of the LEAP as well as Pratt & Whitney’s Geared Turbo Fan (GTF), Hirshman praised the GTF. “We were quite intrigued with GTF technology and we think it is pretty bold and innovative. We think it has a great future in commercial aviation. The concept is not new and makes complete sense. Intuitively it made sense. Pratt has a good product there,” he said.

Southwest is scheduled to get only four 737 Max in 2017. Hirshman confirmed that this means a fourth quarter entry-into-service.

“However, it’s pretty early in the program,” he said. “There is potential it can move to the left. At this point in the program, Boeing guarantees a certain number of airplanes per year. When it gets 24-36 months out, they begin defining delivery dates.”

16 Comments on “Southwest launches 737-8, bypasses 737-7 for now

  1. Tough reading.
    > Southwest truly considered Airbus, and the fact it came close is surprising given the large cost associated with switching models (while Airbus probably compensated for that). However, shows us that replacing NGs with MAXs is no safe business case for Boeing

    > 68inch versus more: I read it as follows: for the current B737 the 68inch is optimal, as any other solution might bring down SFC, but costs otherwise. It would also add risk, probably endanger timely deliver. Under these considerations 68inch is best. Does it have lowest possible fuel burn: he never said that, and from the physics it is hard to imagine. Then Airbus did something seriously wrong.

    > Southwest conducted mission specific analysis, so their numbers may look different from Boeing’s without anyone being a liar.

    • My understanding: The 68″ fan is the turning point of an exponential cost curve.
      Cost for the airframe will balloon out beyond that diameter while costs for the
      engine ( swapping in thermal efficiency for lost propulsive efficiency ) will rise sharply
      below that diameter to be competitive and cost effective in any way. Not only for sfc but
      also for noise and polutants.

      LEAP for MAX will require much more compromising optimisation than the unconstrained application on the competing platforms.

      Just keeping market share will not come cheap for CFM.

  2. That should put paid to anyone who thought Southwest would have ordered Boeing no matter what. Congrats to Boeing for making the Max into such a competitive product.

  3. I think SW going for the -800 keeps the door open for the CS300 in the longer term if they decide two optimized capasity has become a good idea (flying short flights with a 737/A320 is ok if fuel is relatively cheap).

    Looking at previous expectations and SW comments I can imagine Airbus doesn’t see this as a big loss. SW openly endorses the A320 NEO, LEAP and GTF. Everyone can understand why SW ordered the 737 non the less, flying many hundreds for decades & paying less the $40 million for the clearly better 737s they asked for.

  4. WN ordering the B-737-8MAX makes sense now considering all the MAX deliveies all come well after the Wright Amendment is repaealed in 2014. This will open WN’s hub at DAL open to longer flights than just the 6 states they can fly to now, it also opens up WN possibly moving some flights to DFW.

    But, WN will eventually need the B-737-7MAX, too. Their oldest B-73Gs will be over 20 years old by the beginning of the -8MAX deliveries in 2017. The B-717s will be approaching 20 years old. Those early B-737-700NGs and B-717-200s will have a lot of cycles on them by then, and the B-737-8MAX will not be the ideal airplane for a lot of the routes WN currently flies.

    But for now, I am content that two models of the MAX have been launched, the B-737-9MAX by JT and the B-737-8MAX by WN, with AA getting some -8MAX, too.

    JT does have another big order announcement coming in Feb. But I don’t think it will be for more B-737MAXs, at least not yet. They need some WBs, as they only have two currently (both 500 seat B-747-400s). Maybe this could be a big order for the B-747-8I, or the launch customer for the B-777X?

  5. Lion Air has committed to the Max line but has not firmed the order and not made decision on the split; at least as far as I know

  6. They could simplify the MAX by going with a two aircraft family. A 120′ model seating 150 and 135′ model seating 180. One drawback, 7.5 and 8.5 won’t fit on the tail.

  7. In my opinion, the large number of units involved at SW and thus the common-
    ality factor, was one of the big advantages Boeing had in winning this order.
    One could argue, that whatever the commonality benefits are, they could never
    make up for the repeated operating cost difference between the NEO and the
    MAX over their lifespan.
    I answer to which I say: The SW experience re-confirms that the operating costs
    of the NEO, if any, cannot be that much lower compared to what they are for the
    MAX, or SW would have gone for the NEO!

    That just makes me feel even better than I already did, about the 737MAX and
    will cause many other 737 operators to follow soot!

    • That is not all that obvious imho.

      US airlines in general seem to be unable/unwilling to make any kind of innovative change to their business model. They appear hamstrung by “limited” managements and status quo centric unions. Chap11 type bancrupticies eternalise this even more. Loose some dept, f*k the workforce and carry on from there. OK, the quarterly results fetish is another hindrance.

      Introducing a second type or even god forbid changing over to another type will require the promise of unlimited riches created at no investment 😉

  8. In the US, very few passengers decide to fly one airline over another because of the type of airplane that airline has. Most cannot tell the difference between an MD-80, A-320, or B-757, nor do they care. Business and vacation passengers usually pick an airline based on ticket pricing. That is why WN and B6 are so successful. Airlines in the US and EU must watch the bottom line or they won’t be in business very long.

  9. Pingback: Boeing 737 MAX sees a bright year ahead | Aspire Aviation

  10. Pingback: Boeing 737 MAX Sees a Bright Future | World Tourism and Aviation News

  11. Pingback: Paris Air Show, Day 3: A320, 737 production rates of 50+ seen | Leeham News and Comment

Leave a Reply

Your email address will not be published. Required fields are marked *