US start-up has a lot of Moxy

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Introduction

June 21, 2018, © Leeham News: A new US airline secured delivery positions for 60 Bombardier CS300s for deliveries from 2020, according to its business plan circulating this month.

Moxy Airlines is led by David Neeleman, founder of several airlines including Morris Air (later acquired by Southwest Airlines), WestJet, JetBlue and Brazil’s Azul Airlines.

No application for certification had been filed with the US Department of Transportation as of last week.

The plan was first reported by Airfinance Journal June 11.

Summary
  • Business plan says an “order” has been placed for 60 CS300s but also says “delivery positions” were procured.
  • Delivery positions may be those of Republic Airways Holdings.
  • Initial funding of $100m raised.
  • Secondary cities, point-to-point business model.
  • Likely boost for C Series plant in Mobile (AL)—but a suggestion that this fills the line for two years is off base.

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Southwest accelerates 737-700 retirements

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Introduction

April 30, 2018, © Leeham News: Southwest Airlines announced orders 80 Boeing 737-8s so far this year and market intelligence indicates the carrier may be far from done.

Another 60 orders may come during the year, though this trend could slow, market intelligence indicates.

The carrier is accelerating fleet retirements of its Boeing 737-700s with the orders. The latest round last week now makes Southwest the largest single customer for the MAX.

Significantly, the orders represent an up-gauging to the 8 MAX from the -700. The similarly-sized, slow-selling 737-7 MAX, of which Southwest is one of only four identified customers, is being bypassed. Southwest previously deferred delivery of 23 7 MAXes four years.

Click on image to enlarge.

Southwest historically operated its 737s for at least 25 years. Some 737-300s were 28 years old by the time they were retired and stored, according to the Airfinance Journal Fleet Tracker.

Summary
  • Strong economic business case cited to retire 737-700s.
  • 40 737-700s to be retired with concurrent deliveries.
  • Retirements occurring at earlier age.
  • Aging aircraft issues exist.

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Pontifications: Limited operations raise doubts over Paine Field airline service

By Scott Hamilton

April 9, 2018, © Leeham News: This fall, the Seattle area will get a second passenger airport: three airlines will begin service at Paine Field, in Everett, which is also home to Boeing’s massive wide-body production plant.

Alaska, Southwest and United airlines will offer 24 fights out of two gates that are under construction.

It’s the first passenger service from Paine Field.

It’s not hardly enough.

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Southwest CEO sees 60% of fleet becoming the 737-7

March 1, 2018, © Leeham Co.: Southwest Airlines needs about 100 more Boeing 737-8s before turning its

Gary Kelly, CEO of Southwest Airlines. Photo via Google images.

attention to the 737-7, CEO Gary Kelly told LNC in a press scrum at the 2018 Aviation Summit today, sponsored by the US Chamber of Commerce.

The current fleet of 737-700s won’t see retirements until about 2022, at which time the need for the 7 MAX arises.

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History undermines Boeing claim of C Series impact: analysis

Analysis

Dec. 22, 2017, © Leeham Co.: Boeing blames a subsidized, price-dumped Bombardier C Series for the poor sales of the smallest member of the 737 family, the -700 and the 7 MAX, but history doesn’t support the claim.

The US Department of Commerce clearly ignored sales evidence that the 737-700 has been “done” for many years and the 737-7 MAX was an unattractive design

Boeing 737-7 MAX. Rendering via Google images.

that hasn’t been fixed with a redesign; airlines simply don’t want the airplane. Commerce levied tariffs amounting to 292% on C Series imported into the United States in the future.

The US International Trade Commission is currently awaiting post-hearing briefs from Dec. 18 testimony from Boeing, Bombardier, Delta Air Lines and other parties to determine whether Boeing suffered “harm” by the C Series deal with Delta and a near-miss with United Airlines.

If the ITC concludes Boeing suffered harm, the DOC tariffs stand. If not, the DOC action is moot. The loser at ITC is expected to appeal.

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Pontifications: Boeing-Bombardier dispute’s big winner: Airbus

By Scott Hamilton

June 12, 2017, (c) Leeham Co.: Boeing won round one Friday in its price-dumping complaint against Bombardier over its sale of the CSeries to Delta Air Lines.

The US International Trade Commission (ITC) voted 5-0 to continue the investigation. It now goes to the US Department of Commerce to determine whether tariffs should be imposed on the deal, and how much. Delta Air Lines would have to pay the tariffs.

Boeing won this round but the big winner is likely to be Airbus.

 

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WestJet’s 787, international strategy fraught with risks

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Introduction

Boeing 787-9. WestJet ordered 10 and placed an option for 10 more. Deliveries begin in 2019. Boeing photo.

May 8, 2017, © Leeham Co.: WestJet, Canada’s #2 airline behind Air Canada, is making dramatic departures from its low-cost, low-fare strategy since the company began operations in February 1996.

The company earlier announced it will form an Ultra Low-Cost Carrier (ULCC). Last week came an order for 10 Boeing 787-9s and options for 10 more. Deliveries begin in 2019.

Summary
  • WestJet is taking on Air Canada and its LCC unit, Rouge, in LCC and long-haul LCC markets.
  • “Too much going on to get comfortable,” writes analyst.
  • Capital costs will go up significantly.

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Employee Expenses, Fuel Costs Hit Southwest Earnings

  • Rising fuel supports introduction of 737 MAX in October

By William DiBenedetto

May 1, 2017: Southwest Airlines’ first quarter profits fell by nearly 32% to $351m, driven largely by big increases in employee union contract expenses and fuel costs.

During a conference call with analysts, Gary C. Kelly, chairman and CEO, characterized the quarter as “another strong performance with an operating margin of almost 13% despite higher fuel prices.” He also noted that revenue expectations were reset in March, down 2% to 3% for the quarter, adding that the quarter included “a lot of noise with year-over-year union contract increases and settlements.”

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