n7371f
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Southwest Deferring 73H Deliveries

Wed May 16, 2012 3:39 pm

Right off the bat, I got this (this time) from Holly tweeting under her Plane Business account...and it probably came from the airline conference...

Southwest is deferring 20 737-800's from 2013 and 10 737-800's from 2014 into 2017 and 2018 and the end result with save a billion dollars from capital investment.

A lot of questions and heck, when was the last time SWA deferred deliveries? Even after 9/11 they took new build 73G's and parked them in Mojave after leasing them to some credit off-shoot they devised.

And, obviously, how does this play, if at all, into the imminent 717 announcement with Boeing Capital? The latest I'm being told from ATL is the deal is framed to allow AirTran to return the 717 to Boeing Capital and after a certain gestation period, Capital will sell the aircraft to Delta - and this avoid any pilot union issues with AirTran/SWA.

Lots of hyperbole...
 
Atlwest1
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RE: Southwest Deferring 73H Deliveries

Wed May 16, 2012 4:00 pm

Can you provide a link please im very intrigued by this
ALL views, opinions expressed are mine ONLY and are NOT representative of those shared by Southwest Airlines Co. or Airt
 
DFWHeavy
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RE: Southwest Deferring 73H Deliveries

Wed May 16, 2012 4:06 pm

So how many planes will they take delivery of the remainder of this year? And how many will they now take delivery of in 2013?

Thanks
Christopher W Slovacek
 
Atlwest1
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RE: Southwest Deferring 73H Deliveries

Wed May 16, 2012 4:10 pm

Well I thought they have 50 800's on order so I guess maybe taking 20 between now and then? I guess this will put hawaiian plans on hold a bit or will they just use what they have on property now to do that flying when its announced whenever that will be?
ALL views, opinions expressed are mine ONLY and are NOT representative of those shared by Southwest Airlines Co. or Airt
 
B6WNQX
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RE: Southwest Deferring 73H Deliveries

Wed May 16, 2012 4:27 pm

Could this be something in relation to the 717 possibly going to DL and DL maybe assign deliveries to WN? I'm not sure if DL has any open orders for any 737's, but just a thought. They say that it will cut CAPEX, but if the entire transaction is a wash for CAPEX, then it would not impact their public statement about the deferals.
 
JayDub
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RE: Southwest Deferring 73H Deliveries

Wed May 16, 2012 4:42 pm

Quoting B6WNQX (Reply 5):
Could this be something in relation to the 717 possibly going to DL and DL maybe assign deliveries to WN?

Precisely my first thought. DL has an order for 100 B737-900's with deliveries scheduled to begin in 2013. I get the feeling that converting that delivery slot from a -900 to an -800 wouldn't take a whole lot of effort.

[Edited 2012-05-16 09:44:44]
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stlgph
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RE: Southwest Deferring 73H Deliveries

Wed May 16, 2012 4:43 pm

Quoting Atlwest1 (Reply 2):
Can you provide a link please im very intrigued by this

Right now it's just on my wire services, of which you have to be a member

In short -
* Defer deliveries of 30 boeing jets.
* All are 737-800 models
* Half planes to come in 2017, rest a year later
* Will save $1 billion in capital spending for 2013 and 2014
* Authorization for stock buybacks will now double to $1 billion
if assumptions could fly, airliners.net would be the world's busiest airport
 
PlaneAdmirer
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RE: Southwest Deferring 73H Deliveries

Wed May 16, 2012 5:05 pm

This is not bullish at all. They didn't order the planes just because they wanted them and now they are seeking to hold back. If they are pushing to 2017 and 2018, then those could well become MAXes.
 
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Revelation
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RE: Southwest Deferring 73H Deliveries

Wed May 16, 2012 5:18 pm

Quoting PlaneAdmirer (Reply 8):
If they are pushing to 2017 and 2018, then those could well become MAXes.

Given the hasty emergence of the MAX, perhaps WN didn't factor it into its plans very well, so you may very well be right.

Not to say this isn't a setback to both WN and Boeing....
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drerx7
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RE: Southwest Deferring 73H Deliveries

Wed May 16, 2012 5:22 pm

Quoting Revelation (Reply 9):
Not to say this isn't a setback to both WN and Boeing....

I think there are a couple of balls at play here. DL & 717s, desire for MAXs vs. NGs. I don't think it is a setback at all, I think we are on the outside looking in on a very complex negotiation between 3 or 4 parties.
Third Coast born, means I'm Texas raised
 
usflyguy
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RE: Southwest Deferring 73H Deliveries

Wed May 16, 2012 5:55 pm

WN is still taking delivery of 21 73H in 2013 and 29 73H in 2014. By the end of 2014, WN will have 83 737H in the fleet... I'd say that's enough to still do Hawaii.

[Edited 2012-05-16 10:56:51]
My post is my ideas and my opinions only, I do not represent the ideas or opinions of anyone else or company.
 
planemaker
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RE: Southwest Deferring 73H Deliveries

Wed May 16, 2012 5:58 pm

Quoting stlgph (Reply 7):
* Authorization for stock buybacks will now double to $1 billion

It isn't just about aircraft... stock buybacks are done for a purpose.
Nationalism is an infantile disease. It is the measles of mankind. - A. Einstein
 
usflyguy
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RE: Southwest Deferring 73H Deliveries

Wed May 16, 2012 6:09 pm

Quoting planemaker (Reply 12):
It isn't just about aircraft... stock buybacks are done for a purpose.

As with most buy-backs, they probably think they're undervalued so they're removing some shares from trading; hypothetically increasing the value of the remaining outstanding shares.
My post is my ideas and my opinions only, I do not represent the ideas or opinions of anyone else or company.
 
PlaneAdmirer
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RE: Southwest Deferring 73H Deliveries

Wed May 16, 2012 7:01 pm

The buyback also got my attention. WN is making an economic decision that buying back the stock is a better use of capital than buying new planes even though new planes generate revenues and/or cost savings. This is not a particularly optimistic view by WN.
 
QANTAS747-438
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RE: Southwest Deferring 73H Deliveries

Wed May 16, 2012 7:19 pm

Could WN be deferring the 30 -800s because they may be getting 20-30 -800s from DL as part of the 717 deal?
My posts/replies are strictly my opinion and not that of any company, organization, or Southwest Airlines.
 
TrijetsRMissed
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RE: Southwest Deferring 73H Deliveries

Wed May 16, 2012 7:24 pm

I think there's more to this than just cost cutting. Perhaps deferring with plans to convert to the MAX? With the planned deliveries and potential DL slots, WN should be able to replace the 717 capacity. However, the 737 classics may be in service a little longer.

Quoting n7371f (Thread starter):
The latest I'm being told from ATL is the deal is framed to allow AirTran to return the 717 to Boeing Capital and after a certain gestation period, Capital will sell the aircraft to Delta - and this avoid any pilot union issues with AirTran/SWA.

This would be the most beneficial outcome for Boeing and DL. The scenario involving sub-leases and compensation is quite convoluted, and may have been drafted just as leverage. RA would rather own outright, and Boeing would rather sell and wash their hands of the type. Throw in another dozen frames (current Boeing property and/or pending returns) and DL could have a deal for a 100 strong fleet for under $1B.
There's nothing quite like a trijet.
 
KarlB737
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RE: Southwest Deferring 73H Deliveries

Wed May 16, 2012 8:48 pm

Quoting Atlwest1 (Reply 2):
Can you provide a link please im very intrigued by this

Courtesy: Bloomberg News

Southwest Delays 30 Jet Deliveries To Save $1 Billion

"Kelly has told employees they needed to be diligent in increasing efficiency and trimming spending as competitors narrowed Southwest’s historic unit cost advantage.

“We have to work with our employees in a forward-looking way to find ways that we can beat every competitor on costs,” he said. “We need to beat them in every way.”

http://www.bloomberg.com/news/2012-0...-to-save-1-billion.html?cmpid=yhoo
 
FlyASAGuy2005
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RE: Southwest Deferring 73H Deliveries

Wed May 16, 2012 10:18 pm

Quoting JayDub (Reply 5):
Precisely my first thought. DL has an order for 100 B737-900's with deliveries scheduled to begin in 2013. I get the feeling that converting that delivery slot from a -900 to an -800 wouldn't take a whole lot of effort.



DL will not be deferring/converting ANY 739s for WN's use. The first one will be on property as scheduled starting next year.
What gets measured gets done.
 
deltal1011man
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RE: Southwest Deferring 73H Deliveries

Wed May 16, 2012 10:24 pm

Quoting TrijetsRMissed (Reply 15):
I think there's more to this than just cost cutting.

Agreed. Isn't hard to figure out. Slow down on growth and get the FL mess done. Hopefully by this time economy comes back and growth can start.

Quoting FlyASAGuy2005 (Reply 17):

DL will not be deferring/converting ANY 739s for WN's use. The first one will be on property as scheduled starting next year.

        
to many planes that have to be replaced. 717 can't replace a 757.
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NWAROOSTER
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RE: Southwest Deferring 73H Deliveries

Wed May 16, 2012 11:52 pm

No one seems to be taking notice that AirTran has about 50 737-700s that Southwest needs to absorb.
This does not also include the predicament Southwest has with the 717s it is acquiring.   
Procrastination Is The Theft Of Time.......
 
deltal1011man
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RE: Southwest Deferring 73H Deliveries

Wed May 16, 2012 11:54 pm

Quoting NWAROOSTER (Reply 19):

well the FL 737s will still be flying the same routes so thus they aren't going to adding capacity. New airplanes would be adding capacity.
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hOMSaR
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RE: Southwest Deferring 73H Deliveries

Thu May 17, 2012 12:05 am

Quoting NWAROOSTER (Reply 19):
No one seems to be taking notice that AirTran has about 50 737-700s that Southwest needs to absorb.
Quoting DeltaL1011man (Reply 20):
well the FL 737s will still be flying the same routes so thus they aren't going to adding capacity. New airplanes would be adding capacity.

Unless (and this is purely hypothetical) WN somehow decided that they can't operate FL's route network profitably and are going to significantly reduce service on that side without a corresponding increase on the WN side.
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mli717fan
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RE: Southwest Deferring 73H Deliveries

Thu May 17, 2012 3:21 am

I don't know if anyone caught it, but the WN/FL LowerFaresFarther website is no longer online. I guess WN gave up on pushing the BS that the FL network will remain....

http://www.airtran.com/lowfaresfarther/

(Click the link at the bottom, page cannot be found)

Ouch.
 
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lightsaber
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RE: Southwest Deferring 73H Deliveries

Thu May 17, 2012 3:28 am

Quoting n7371f (Thread starter):
A lot of questions and heck, when was the last time SWA deferred deliveries? Even after 9/11 they took new build 73G's and parked them in Mojave after leasing them to some credit off-shoot they devised.

I recall WN delaying when they received 73Gs post 9/11. So this isn't unprecedented. They accepted some, but not that many.

I also think this is a LOUD statement to unions that there is no growth. In other words, play nice with the FL unions or ?

Quoting n7371f (Thread starter):
Southwest is deferring 20 737-800's from 2013 and 10 737-800's from 2014 into 2017 and 2018

Am I the only one who thinks this ends the discussion of the 717s going to DL?

Quoting PlaneAdmirer (Reply 7):
This is not bullish at all. They didn't order the planes just because they wanted them and now they are seeking to hold back. If they are pushing to 2017 and 2018, then those could well become MAXes.

It could be WN's assessment to not buy aircraft that will have... accelerated depreciation curves.

Lightsaber
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TZTriStar500
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RE: Southwest Deferring 73H Deliveries

Thu May 17, 2012 3:39 am

Quoting TrijetsRMissed (Reply 15):
Throw in another dozen frames (current Boeing property and/or pending returns)

So where are these supposed extra dozen coming from? BCC has no other available 717s.
35 years of American Trans Air/ATA Airlines, 1973-2008. A great little airline that will not be soon forgotten.
 
TSS
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RE: Southwest Deferring 73H Deliveries

Thu May 17, 2012 4:00 am

Quoting Revelation (Reply 8):
Quoting PlaneAdmirer (Reply 8):
If they are pushing to 2017 and 2018, then those could well become MAXes.

Given the hasty emergence of the MAX, perhaps WN didn't factor it into its plans very well, so you may very well be right.

That was my first thought as well: Defer (some) current orders and convert them to MAXes at a later date.
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cmb320
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RE: Southwest Deferring 73H Deliveries

Thu May 17, 2012 4:11 am

Or possibly this means Delta will NOT be taking the 717's so Southwest is stuck with them and doesn't want the additional capacity of more 737-800's. Hmmmmm..... I hope that's the case.
 
FlyASAGuy2005
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RE: Southwest Deferring 73H Deliveries

Thu May 17, 2012 4:11 am

OR, they're finally seeing the light. New and shiny isn't always the way to go. That's a LOT of debt to have on the books at a time where your ROI isn't looking too hot with fuel prices where it's at. I've said it before and i'll say it again, the MD90 deal was pure genius. You're getting 738 capacity but for rock bottom prices and you're using the V2500 which is a tried and true engine.
What gets measured gets done.
 
MSPNWA
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RE: Southwest Deferring 73H Deliveries

Thu May 17, 2012 4:32 am

Quoting PlaneAdmirer (Reply 7):
If they are pushing to 2017 and 2018, then those could well become MAXes.

Which would seem logical. WN will still be planning on taking quite a few 73H deliveries in both 2013 and 2014. The aircraft that WN will be looking to retire in the near future (737 classics), are spread out in ages. They have no glut of aircraft to replace. So it may the best growth move to defer some deliveries and get the newest and best when the time comes.

Quoting FlyASAGuy2005 (Reply 27):
I've said it before and I'll say it again, the MD90 deal was pure genius.

In the short-term, DL's MD-90 strategy will always "win". However the economic game is played over the long-run as well.
 
FlyASAGuy2005
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RE: Southwest Deferring 73H Deliveries

Thu May 17, 2012 4:37 am

Quoting MSPNWA (Reply 28):

In the short-term, DL's MD-90 strategy will always "win". However the economic game is played over the long-run as well.

Of course. I don't have the numbers in front of me but someone did a great analysis of the MD90 which is paid for vs. a 738 that would have a mortgage and their fuel burn numbers. Yes, the fuel curve is in favor of the 738 but te 90 still came out on top because the ownership factor outpace the money that would be saved in fuel.
What gets measured gets done.
 
slcdeltarumd11
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RE: Southwest Deferring 73H Deliveries

Thu May 17, 2012 5:23 am

Very interesting. Everyone has good theories on here. It does make me think we will hear some more detailed long term plans or 717 swapping somewhat soon. Southwest has so much on their plate right now it's hard to keep track of everything.
 
usflyguy
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RE: Southwest Deferring 73H Deliveries

Thu May 17, 2012 5:46 am

I think that instead of retiring the -300's at the pace they were going to, they're going to stick around and keep on flying. The majority of them are paid for and owned outright by WN, unlike shiny new -800's. I'm pretty sure they've run the numbers and know how many -800's they need on property to operate the flights that they want to operate with them. Just like DL's genius move with the MD's, WN has classic 737's that could be retired but don't need to be and will be sticking around longer.
My post is my ideas and my opinions only, I do not represent the ideas or opinions of anyone else or company.
 
FlyASAGuy2005
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RE: Southwest Deferring 73H Deliveries

Thu May 17, 2012 5:48 am

Quoting usflyguy (Reply 31):
WN has classic 737's that could be retired but don't need to be and will be sticking around longer.

   Not a thing wrong with them and if fuel spikes, they can temporarily park these as there are no payments to be made. A Much tougher call with 73Gs and 738s that you have to pay for anyway.
What gets measured gets done.
 
scouseflyer
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RE: Southwest Deferring 73H Deliveries

Thu May 17, 2012 8:12 am

Quoting usflyguy (Reply 12):
As with most buy-backs, they probably think they're undervalued so they're removing some shares from trading; hypothetically increasing the value of the remaining outstanding shares.

It also reduces future liabilities as there are less shares to pay dividends out on with shares being effectively a very helpful form of debt.
 
stlgph
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RE: Southwest Deferring 73H Deliveries

Thu May 17, 2012 12:25 pm

For what it's worth, Southwest expects full integration of AirTran by 2015, so says Gary Kelly at an airline conference this morning.
if assumptions could fly, airliners.net would be the world's busiest airport
 
mcg
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RE: Southwest Deferring 73H Deliveries

Thu May 17, 2012 2:56 pm

Will Boeing be able to shift the deffered production slots to another buyer?
 
TrijetsRMissed
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RE: Southwest Deferring 73H Deliveries

Thu May 17, 2012 4:19 pm

Quoting lightsaber (Reply 23):
Am I the only one who thinks this ends the discussion of the 717s going to DL?

From 2012-2014, WN will receive 83 NB deliveries from Boeing (78 738s and 5 73Gs). How many 717s do they have? 88..

If the plan is to trim back on growth, the NB deliveries will likely replace retired aircraft. Would WN rather replace capacity by retiring the entire 717 fleet, or approx half of the 737 classic fleet?

Quoting tztristar500 (Reply 24):

Quoting TrijetsRMissed (Reply 15):
Throw in another dozen frames (current Boeing property and/or pending returns)

So where are these supposed extra dozen coming from? BCC has no other available 717s.

You are quite the challenger of any 717 discussion, huh? Weren't you once kicking and screaming that any such talks between the parties was egregious and not possible?   Somewhere in that "Part 1" thread I'm sure...

To answer your question, there are other frames out there. T5 recently decided to retire their fleet of seven. IIRC, Volotea's amount of was undisclosed. And those frames could very well be on the market again in 24 months, if the business venture fails.

The point is, I hypothesize, on average, a 717 purchase price will be at $10m per frame. A bulk purchase involving many of the earliest frames off the line, should drive the price down further. Hence "100 for under $1B."
There's nothing quite like a trijet.

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