Flight International – 6 August 2019

Cover Story

10 | Flight International | 6-12 August 2019 flightglobal.com

L

ong-time Boeing customer

Southwest Airlines is arguably

the carrier most affected by the

continued grounding of the 737

Max, with a fleet of more than 30 of

the aircraft now parked. As such, it

was unsurprising that Southwest’s

executives used much of the com-

pany’s second-quarter earnings call

to outline how the flight suspen-

sion has disrupted its operations,

finances and fleet plan.

Assuming regulators approve

the 737 Max to fly again in No-

vember, Southwest aims to have

at least 30 of the aircraft operating

by 6 January 2020, senior man-

agement said on the 25 July call.

The Dallas-based carrier pulled

all 34 of its 737 Max aircraft from

service when the grounding came

into effect in March, prompting it

to cancel tens of thousands of

flights and rack up $175 million in

related costs in the second quarter.

On 25 July, Southwest said it

had removed 737 Max flights

from another two months of

schedules, pushing to 6 January

the date it expects the aircraft to

return to service.

“Assuming regulatory approval

to return the Max to service by

early November, our baseline plan

would be to control the process so

we could provide the network at

least 30 Max aircraft... by January

6,” Southwest chief operating of-

ficer Mike Van de Ven says. “Then

we would ramp up from there in a

controlled fashion depending on

the delivery schedules.”

timetable doubts

Southwest concedes that the

timeline remains uncertain,

noting that the process for ap-

proving the 737 Max is in the

hands of the US Federal Aviation

Administration (FAA).

Still, based on information from

Boeing, Southwest expects to re-

ceive 16 new 737 Max from the

airframer in 2019, including seven

leased aircraft. But the majority of

deliveries expected this year have

now been pushed into 2020.

Fleet Kristin majcher Buenos Aires

southwest grapples with max absence

Carrier most affected by grounding of re-engined 737 is hopeful that narrowbody can resume service on 6 January

“We don’t have an update to

our contractual delivery schedule

with Boeing at this point, which

shows 41 remaining deliveries

this year,” says Southwest’s chief

financial officer Tammy Romo.

“But we expect the majority of

those will shift to 2020.”

Southwest is holding some

older aircraft longer to cover ca-

pacity requirements until the Max

is approved to re-enter service: the

airline plans to retire 11 737-700s

this year instead of 18, Romo says.

Southwest ended the second

quarter with 753 aircraft and has

not taken delivery of any more

since the Max grounding began,

Romo says.

Southwest’s latest fleet plan

has the carrier resuming Max

flights several months later than

competing airlines estimate.

American Airlines, for instance,

has removed the re- engined nar-

rowbody from its schedules

through 2 November. American

executives said on 25 July that they

are not ready to push the estimated

service-resumption date further

into the future.

However, in a research note is-

sued on the same date, JPMorgan

analysts called American’s No-

vember timeline “unrealistic”.

Boeing is sticking to its plans

to deliver an updated software

package to regulators in Septem-

ber, and it expects the FAA will

clear the aircraft to fly early in the

fourth quarter.

But the agency’s acting

administrator Dan Elwell has

raised doubts that the approval

process will conform to Boeing’s

latest timeline.

“We don’t have a timeline.

Don’t have October. Don’t have

August. Don’t have 2021,” Elwell

said, according to Reuters.

Regulators have repeatedly

insisted they will clear the Max

to fly only after thoroughly

vetting the aircraft.

“We’re unhappy that it’s taken

so long, and we’re in the dark,

just like you are, on a number of

technical matters,” Southwest

chief executive Gary Kelly said in

a CNBC interview to support the

announcement of the quarterly

results. “Our pilots are heavily

engaged and working with Boe-

ing to understand the changes in

terms of the software, and impact

on flight-control systems.”

logistical challenge

Once the grounding is lifted,

Southwest faces the task of bring-

ing into service three groups of

737 Max, Van de Ven says.

One comprises the 34 aircraft it

pulled from service when the

grounding took effect. Southwest

estimates it may need one to two

months to perform maintenance

required to bring those jets, which

are in storage at Victorville, Cali-

fornia, to operational readiness.

Another group includes 737

Max jets already produced and

stored by Boeing, but not yet deliv-

ered. Southwest expects it could

receive those at a rate of three per

week. The third is made up of air-

craft that will be delivered nor-

mally from Boeing as they come

off the production line.

Southwest also reckons it will

need 30 days for pilots to com-

plete new training required by

regulators, assuming that does not

include time in a flight simulator.

Kelly told CNBC he hopes the

airline will be “more or less”

back on track with its fleet plan

by the middle of 2020. ■

Dallas-based airline will require around two months to restore operational readiness of 34 stored jets

etienne Laurent/ePA-eFe

/shutterstock

“We’re unhappy that

it’s taken so long, and

we’re in the dark on a

number of technical

matters”

gary Kelly

Chief executive, southwest Airlines

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