According to a regulatory filing issued earlier today, Southwest Airlines has increased its Boeing 737 MAX 7 order by 34 aircraft. The updated order means that the US carrier is now expecting to take 234 of the smallest MAX variant over the coming years.
The Boeing 737 is the backbone of the Southwest Airlines fleet. As the older members of the fleet begin to be retired, the airline is replacing them with the latest generation, the MAX. With its order, Southwest remains a crucial customer for Boeing. The low-cost carrier is both the largest operator of MAX aircraft and the customer in terms of orders.
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More baby MAXs
Southwest has increased its 737 MAX order even further by exercising some of its options. Before today, the airline had 350 firm orders. 150 were for the MAX 8, and 200 for the smaller MAX 7. Today, the airline increased its order for the baby MAX 7 by 17%.
In an 8K filing issued today, southwest airlines revealed that it had reached an agreement to convert 34 options to orders. Two of these MAX 7 jets are from options listed for 2022, while the remainder comes from later years. Despite this, all 34 added today are expected to be delivered next year.
Including firm orders and options, the Southwest 737 MAX order book now includes 660 aircraft. 40 of its options are for 2022, and the airline is currently evaluating these options. Southwest Airlines expects to spend $1.5 billion on new aircraft next year.
As well as exceeding options, Southwest Airlines has also brought the date of remaining options forwards. Interestingly, the number of options has only dropped by two, meaning that Southwest has replaced 32 options that it has now exercised with even more options. The change in options each year is as follows,
| Year | Old Options | New Options |
|---|---|---|
| 2022 | 42 | 40 |
| 2023 | 38 | 70 |
| 2024 | 40 | 56 |
| 2025 | 40 | 56 |
| 2026 | 40 | 40 |
| 2027 | 30 | 6 |
| 2028 | 30 | 0 |
| 2029 | 10 | 0 |
| Total | 270 | 269 |
Only MAX 7 deliveries soon
So far, Boeing is yet to deliver the first 737 MAX 7. Without further changes to the airline’s 268 outstanding options, Southwest expects an influx of MAX 7 aircraft in 2022. The airline has eight more firm orders for MAX 8 aircraft due to be delivered this year.
In 2022, the airline is only expecting MAX 7 deliveries, with 64 projected for the year. From 2023 to 2028, 30 deliveries are expected each year. These will only be for the smallest of the MAX family until 2026, when they become split 50/50 with the MAX 8 once more. The new delivery schedule is as follows,
| Year | MAX 7 Deliveries | MAX 8 Deliveries |
|---|---|---|
| 2022 | 64 | 0 |
| 2023 | 30 | 0 |
| 2024 | 30 | 0 |
| 2025 | 30 | 0 |
| 2026 | 15 | 15 |
| 2027 | 15 | 15 |
| 2028 | 15 | 15 |
| 2029 | 20 | 30 |
| 2030 | 15 | 45 |
| 2031 | 0 | 10 |
| Total | 234 | 130 |
Of course, when one door opens, another one closes. The delivery of shiny new MAX aircraft will mean that older aircraft are retired. Over the next 10 to 15 years, the airline will retire 30-35 Boeing 737-700 aircraft each year.
The order will come as good news for both Boeing and the industry. For Boeing, it shows that its most significant 737 customer is still committed to the product despite recent hiccups with the jet. Meanwhile, for the industry, it indicates that Southwest believes the strong aviation recovery will continue. The TSA recently posted another post-COVID traffic record. With the bulk of its operations being domestic, international travel restrictions don’t affect Southwest as much as other carriers.
Are you excited to see the Southwest Airlines 737 MAX order increased? Let us know what you think and why in the comments!
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