Southwest Airlines has announced that it is converting 24 of its Boeing 737 MAX 7 aircraft orders into larger and already certified Boeing 737 MAX 8 variants. This decision follows continued delays with the MAX 7 certification process, which recently led Boeing to announce that the first delivery of the MAX 7 variant would be delayed until 2024.

The MAX 7, the smallest variant of Boeing’s 737 MAX family, has faced several delays in receiving certification from the Federal Aviation Administration (FAA) in the US, similar to the issues faced by the Boeing 737 MAX 10. Southwest CEO Bob Jordan had earlier said that he was not counting on the MAX 7’s delivery this year. However, based on the latest news from Boeing regarding the MAX 7’s possible certification by the end of this year, Southwest Airlines has made the strategic decision to convert some of its orders.

Capacity Growth Without Delays

The conversion of orders will enable Southwest to take delivery of new aircraft faster and meet the growing demand, thereby growing capacity without delays. According to reports, the MAX 8 will act as a buffer to the impacts caused by the delivery delays. Southwest Airlines is also expecting to receive approximately 70 more MAX 8 aircraft as part of its fleet renewal program this year.

Impact on Airlines and Boeing

This decision has significant implications for the industry, as Southwest Airlines is one of the largest customers for the 737 MAX 7 aircraft. The conversion of orders may potentially influence the decisions made by other carriers regarding the MAX 7 variant. While this conversion does not affect the overall number of aircraft in Boeing’s order book, it does impact the confidence other carriers might have in the MAX 7.

Furthermore, Boeing is facing hurdles with certification regarding the larger MAX 10 aircraft and the Boeing 777X. The manufacturer recently indicated that continuous certification delays for the 737 MAX and the 777X types could result in further order cancellations or conversions. Such changes are already apparent as of June, as Boeing has noted aircraft cancellations totaling over $10 billion and a net decrease in the order book primarily related to the 737 MAX.

Boeing’s Order Book

When considering data from Boeing’s order book for the first half of this year, the manufacturer has seen some major orders for the MAX aircraft, totaling up to 366 of the type. Air India has ordered 190 of the 737 MAX aircraft as part of its fleet expansion, and Avalon has ordered 40 of the type during the Paris Air Show 2023.

Boeing has also delivered 211 MAX aircraft in total, of which 203 were delivered to 19 customers worldwide, and eight aircraft were delivered to unidentified customers.

Operational Efficiency

It is unclear how swapping the aircraft for the larger variant would impact the airline’s expected operational efficiency in terms of economics. Simple Flying reached out to Southwest Airlines to know more about this, but the airline has not yet responded.

Southwest Airlines is known for its operational efficiency and low fares. The conversion of orders from the MAX 7 to the MAX 8 variant may result in a change in the airline’s operating economics, as the MAX 8 variant has a higher capacity and may require additional crew members, leading to higher operating costs. However, the airline’s decision to convert the orders may be a strategic move to ensure that it can continue to grow while minimizing delays due to certification issues.

Southwest Airlines’ decision to convert some of its Boeing 737 MAX 7 orders to the MAX 8 variant is a strategic move that enables the airline to continue its growth plans without delays caused by certification issues. This decision has implications for the industry as a whole, as Southwest Airlines is one of the largest customers for the MAX 7 aircraft. Boeing’s order book for the first half of 2023 shows that there is still a demand for the MAX aircraft, despite the certification issues. However, the continuous certification delays may result in further order cancellations or conversions, impacting Boeing’s order book in the future.

What do you think are the implications of Southwest Airlines converting its Boeing 737 MAX 7 orders to MAX 8s for the airline industry as a whole?

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