cylw
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WestJet Letter of Intent For 65 737MAX

Thu Aug 29, 2013 11:50 am

Boeing Statement on WestJet's Intent to Purchase 65 737 MAX Airplanes

SEATTLE, Aug. 29, 2013 /PRNewswire/ -- Boeing (NYSE: BA) is delighted that WestJet has entered into a letter of intent to purchase 65 737 MAX airplanes, consisting of 40 737 MAX 8s and 25 737 MAX 7s. This pending order, valued at $6.3 billion at current list prices, is a key component of the Calgary-based carrier's strategy to optimize and modernize its fleet.

"Since the very beginning, the Boeing 737 helped play a role in WestJet's growth and success," said Brad McMullen, vice president of North America Sales, Boeing Commercial Airplanes. "We are pleased to see the 737 MAX will continue the tradition of supporting WestJet's vision to be one of the most successful international airlines in world. The 737 MAX's efficiency, reliability and passenger amenities will be a successful combination with WestJet famous customer service."

Boeing looks forward to working with WestJet to finalize the order. When finalized, the agreement will be posted to the Boeing Orders & Deliveries website as a firm order.

Contact:
Tim Bader
North America/Leasing Communications
Boeing Commercial Airplanes
+1 206-859-3633
tim.s.bader@boeing.com

SOURCE Boeing
 
briboy
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WestJet Letter of Intent For 65 737MAX

Thu Aug 29, 2013 11:59 am

More on this from WestJet:

"The airline will substitute 15 of its existing Boeing Next-Generation 737 aircraft orders currently scheduled to deliver between December 2014 and 2018, with Boeing 737 MAX aircraft, for a net increase of 50 committed deliveries to its fleet plan. Including this pending order, WestJet's future Boeing 737 aircraft deliveries total 92, with commitments for the proposed Boeing 737 MAX 7 and MAX 8 aircraft, including substitution rights to the 737 MAX 9, scheduled for delivery from 2017 through 2027. WestJet notes that as a result of the flexibility built into its fleet plan, which includes its lease renewal options but excludes any potential sales other than the previously announced sale of 10 737 Boeing Next-Generation aircraft in 2014 and 2015, the fleet could be as large as 162 737 Boeing aircraft or as few as 120 737 Boeing aircraft a decade from now."

Another MAX 7 order, but I wonder if they will be taken up. WS has been burned by taking the orphan model once before (736), and I wonder if they may again in that situation with the MAX 7.
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sirtoby
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WestJet Letter of Intent For 65 737MAX

Thu Aug 29, 2013 12:04 pm

Quoting briboy (Reply 1):
Another MAX 7 order, but I wonder if they will be taken up. WS has been burned by taking the orphan model once before (736), and I wonder if they may again in that situation with the MAX 7.

Right, and I also wonder if Southwest will take theirs or if they just took the opportunity to get good pricing as a launch customer (and subsequently low predelivery payments) just to switch to the -8 later on. Same for Westjet...

And with the 15 orders for NG's cancelled (also same story as WN here) Boeing has to sell about 700 more NG's to get the lines full until the MAX takes over full production.
 
voodoo
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WestJet Letter of Intent For 65 737MAX

Thu Aug 29, 2013 2:18 pm

So....what is the trans-Atlantic potential of the MAX 7?
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Stitch
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WestJet Letter of Intent For 65 737MAX

Thu Aug 29, 2013 2:29 pm

Quoting voodoo (Reply 3):
So....what is the trans-Atlantic potential of the MAX 7?

Design range (passengers and bags) is projected to be 3445nm / 6200km.
 
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c172akula
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WestJet Letter of Intent For 65 737MAX

Thu Aug 29, 2013 3:25 pm

Quoting Stitch (Reply 4):
Design range (passengers and bags) is projected to be 3445nm / 6200km.

So the MAX 7 could solve the issue of non-stop YYC/YEG - Hawaii flights (without chartering aircraft)?

How about the MAX 8, what is its range?
 
n471wn
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WestJet Letter of Intent For 65 737MAX

Thu Aug 29, 2013 3:52 pm

Quoting sirtoby (Reply 2):
Right, and I also wonder if Southwest will take theirs or if they just took the opportunity to get good pricing as a launch customer (and subsequently low predelivery payments) just to switch to the -8 later on. Same for Westjet...

They need these used a/c to bridge the gap during the loss of the 717's
 
chiad
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WestJet Letter of Intent For 65 737MAX

Thu Aug 29, 2013 4:24 pm

Quoting cylw (Thread starter):
Boeing Statement on WestJet's Intent to Purchase 65 737 MAX Airplanes

Since this is not an order, not even a MoU, shouldn't the name of the topic be changed?
It's would be nice when one does a search in the future.
 
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wjv04
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WestJet Letter of Intent For 65 737MAX

Thu Aug 29, 2013 5:54 pm

Quoting chiad (Reply 7):
Since this is not an order, not even a MoU, shouldn't the name of the topic be changed?
It's would be nice when one does a search in the future.


Its a letter of intent. And will happen, WS has never had a history of backing out of any intent to purchase an aircraft once announced.

[Edited 2013-08-29 11:06:29]
 
YYCSpotter
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WestJet Letter of Intent For 65 737MAX

Thu Aug 29, 2013 6:51 pm

Quoting wjv04 (Reply 8):
WS has never had a history of backing out of any intent to purchase an aircraft once announced.

Unless you count them backing out on the 737-600W program, that is correct
I
 
CRJ900
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WestJet Letter of Intent For 65 737MAX

Thu Aug 29, 2013 8:11 pm

How come they didn't order a bunch of B737 MAX 9? 200 seats will give great CASM and allow extra capacity at busy airports. AC seem to have great success with their A321.
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brilondon
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WestJet Letter of Intent For 65 737MAX

Thu Aug 29, 2013 8:34 pm

Quoting CRJ900 (Reply 10):
How come they didn't order a bunch of B737 MAX 9? 200 seats will give great CASM and allow extra capacity at busy airports. AC seem to have great success with their A321.

I would suggest that they wanted to keep the Boeing 737 fleet as in common as possible. They may not need the capacity that they would have if they acquired the 900 and the added type would add extra expense they don't want to incur.

[Edited 2013-08-29 13:57:13]
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PlanesNTrains
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WestJet Letter of Intent For 65 737MAX

Thu Aug 29, 2013 8:52 pm

Quoting brilondon (Reply 11):
I would suggest that they wanted to keep the all Boeing fleet intact and the A321 would necessitate the implementation of additional resources to accommodate the A321.

I think he was referring to WS not ordering the MAX9.

I would think that going from the -600/-700/-800 to the MAX7/MAX8/(eventual)MAX9 would make sense for WS but perhaps they want to moderate their capacity growth for now rather than commit to a larger frame.

-Dave
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KELPkid
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WestJet Letter of Intent For 65 737MAX

Thu Aug 29, 2013 8:56 pm

I wonder if A was even in conention for this order...you have a happy B customer, so its not too suprising that they would go for the updated B product    Plus, it should not affect delivery dates to convert existing order slots into the newer product. Rather smart if you ask me-making your fleet more fuel effecient without having to train flight crews for a new type  
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glideslope
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WestJet Letter of Intent For 65 737MAX

Thu Aug 29, 2013 9:11 pm

Quoting chiad (Reply 7):
Since this is not an order, not even a MoU, shouldn't the name of the topic be changed?
It's would be nice when one does a search in the future.

Surly your intent with a comment such as this is not to imply WS is being disingenuous in an way? That would certainly be a unnecessary verbal assault on the Canadian people!!!

If you don't like the order, just say it. "I think the order is bad".   
To know your Enemy, you must become your Enemy.” Sun Tzu
 
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redzeppelin
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WestJet Letter of Intent For 65 737MAX

Thu Aug 29, 2013 9:40 pm

Quoting KELPkid (Reply 13):
I wonder if A was even in conention for this order...you have a happy B customer, so its not too suprising that they would go for the updated B product

I wonder if the C-series was in contention--it seems like a good fit for them.
As an aside, I took my first flights with WS this week, and was thoroughly impressed with them. I flew LGA-LGA and was excited to log my first 736.

[Edited 2013-08-29 14:41:48]
 
chiad
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WestJet Letter of Intent For 65 737MAX

Thu Aug 29, 2013 9:53 pm

Quoting wjv04 (Reply 8):
Its a letter of intent. And will happen,
Quoting glideslope (Reply 14):
If you don't like the order, just say it. "I think the order is bad"

Bah .. I am sure it will happen! Honest.
But why cant news be news when it actually happens?
This LoI will probably become a MoU before it's firmed up.
And we can enjoy 3 threads about 1 order.
As for now this is not an order .... "just" a LoI ... cant the topic geadline reflect that also?

Call a spade for a spade! But that's just me.
 
KELPkid
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WestJet Letter of Intent For 65 737MAX

Thu Aug 29, 2013 10:01 pm

Quoting redzeppelin (Reply 15):
I wonder if the C-series was in contention--it seems like a good fit for them.
As an aside, I took my first flights with WS this week, and was thoroughly impressed with them. I flew LGA-LGA and was excited to log my first 736.

The problem with the C series is that the largest offering is about as large (seat-wise) as a 73G. If you want larger aircraft, there's just no growth potential in that product line   Sounds like they wanted some 737-8 MAX's, too...
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rotating14
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WestJet Letter of Intent For 65 737MAX

Thu Aug 29, 2013 10:02 pm

Quoting CRJ900 (Reply 10):

Boeing only has WN as the one other Max 7 customer. I'm sure there was some good negotiating to get them aboard.
 
KELPkid
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WestJet Letter of Intent For 65 737MAX

Thu Aug 29, 2013 10:07 pm

Quoting rotating14 (Reply 18):
Boeing only has WN as the one other Max 7 customer. I'm sure there was some good negotiating to get them aboard.

If it's a drop in replacement for 90+% of their fleet (which it is   ), and saves them money on fuel (which it does), then it's a no-brainer. WN has always valued frequency over aircraft size, anyways...the 738's were brought on board specifically for slot restricted airports where WN had already grown to max size based on the number of slots they could get.
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Stitch
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WestJet Letter of Intent For 65 737MAX

Thu Aug 29, 2013 10:31 pm

Quoting chiad (Reply 7):
Since this is not an order, not even a MoU, shouldn't the name of the topic be changed?
Quoting chiad (Reply 16):
Bah .. I am sure it will happen! Honest.
But why cant news be news when it actually happens?
This LoI will probably become a MoU before it's firmed up.
And we can enjoy 3 threads about 1 order.
As for now this is not an order .... "just" a LoI ... cant the topic geadline reflect that also?
Call a spade for a spade! But that's just me.

Which compels me to mention that in the thread about IAG intending to order 62 A320s for Vueling you did not ask for a topic clarification there (as IAG had not yet firmed said "order", pending approval by the Board of Directors). Is a spade a spade only when it's a Boeing LoI / MoU and not an Airbus LoI / MoU?   

Seriously, that's why we have the "official" order threads, which should be (but admittedly not always are) used to record firm orders (as opposed to commitments and MoUs / LoIs) as announced by Airbus and Boeing via official press releases.

[Edited 2013-08-29 16:01:30]
 
GUYAIR707
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WestJet Letter of Intent For 65 737MAX

Thu Aug 29, 2013 10:39 pm

Why didn't Boeing call them 737 MAX 1, MAX 2 and MAX 3, or is it a marketing thing? Customers will think them "lesser" models than the -700, -800, -900.

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Stitch
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WestJet Letter of Intent For 65 737MAX

Thu Aug 29, 2013 10:58 pm

Quoting GUYAIR707 (Reply 21):
Why didn't Boeing call them 737 MAX 1, MAX 2 and MAX 3, or is it a marketing thing? Customers will think them "lesser" models than the -700, -800, -900.

I can think of at least two reasons:

1) It ties into Boeing's (evidently) new numbering system, which uses a single digit model number suffix as opposed to the traditional three-digit.

2) It appears that the MAX models will have the same length and width of their respective NG forebears, so the 737-7 is the same size as the 737-700, the 737-8 the same size as the 737-800 and the 737-9 the same size as the 737-900. Therefore, it maintains continuity across models whereas a 737-1, 737-2 and 737-3 would likely be more confused with the 737-100, 737-200 and 737-300 (all of which were smaller than the 737-700, 737-800 and 737-900, respectively).
 
Viscount724
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WestJet Letter of Intent For 65 737MAX

Thu Aug 29, 2013 11:10 pm

Quoting c172akula (Reply 5):
Quoting Stitch (Reply 4):
Design range (passengers and bags) is projected to be 3445nm / 6200km.

So the MAX 7 could solve the issue of non-stop YYC/YEG - Hawaii flights (without chartering aircraft)?

MAX 7 seating capacity would be too small to be economic to Hawaii in my opinion.
 
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lightsaber
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WestJet Letter of Intent For 65 737MAX

Thu Aug 29, 2013 11:18 pm

Quoting briboy (Reply 1):
WS has been burned by taking the orphan model once before (736)

Nitpick, it was WS's banks that were burned by the prior orphan model.

I have no doubt that WN and WS wish to buy -7MAX's. But what happens when they see a higher lease payment to cover the risk of the resale? Will they stick with -7s? There will not be a resale market other than as parts.

And I loved my one flight on a WS 736. But my preference as a customer (smaller is better) is different then if I consider money on the line (best resale).

Consider Lion Air. They wanted only 739ERs, but lease rates on the 738s were not only less due to purchase price, but lower due to the lower risk (improved resale market), so they switched for a bit to 738 deliveries. Now that the -9 is selling better, they will receive more 739ERs (IIRC in 2016) and they became the -9 launch customer.

Then Lion Air ruined my simple example by buying A320s/NEOs.   But the 738/739 switch was still based on A/C resale value. If WN and WS somehow could get buy without borrowing for new jets, I would be more certain of the -7 deliveries. As of now, I consider them placeholders.

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chiad
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RE: WestJet Letter Of Intent For 65 737MAX

Fri Aug 30, 2013 4:35 am

Quoting Stitch (Reply 20):
Which compels me to mention that in the thread about IAG intending to order 62 A320s for Vueling you did not ask for a topic clarification there (as IAG had not yet firmed said "order", pending approval by the Board of Directors). Is a spade a spade only when it's a Boeing LoI / MoU and not an Airbus LoI / MoU?

Because this is a firm order for 62 frames plus another 58 options.
The pending approval by the Board of Directors is for an aditional 100 frames.
 
PlanesNTrains
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RE: WestJet Letter Of Intent For 65 737MAX

Fri Aug 30, 2013 6:20 am

Quoting chiad (Reply 25):
Because this is a firm order for 62 frames plus another 58 options.
The pending approval by the Board of Directors is for an aditional 100 frames.

Hmmm. Well the press release by IAG said:

"The Vueling firm orders are subject to approval by IAG's shareholders." Not sure what that means, though.

-Dave
-Dave
 
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frigatebird
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RE: WestJet Letter Of Intent For 65 737MAX

Fri Aug 30, 2013 7:01 am

Quoting PlanesNTrains (Reply 26):
Hmmm. Well the press release by IAG said:

"The Vueling firm orders are subject to approval by IAG's shareholders." Not sure what that means, though.

-Dave

Which means it will appear on Airbus' list of orders after the the shareholders meeting. If it is approved of course, but it would cause quite a stir in the company if it isn't.
Same as the recent BA order for 18x A350 and 18x 787. Will be on the order books after the meeting (which is scheduled next month, I believe?).

And no doubt, a WS order for 65x 737MAX will appear on Boeing's order list also (and a cancellation of 15x 737NG at the same time).
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queb
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RE: WestJet Letter Of Intent For 65 737MAX

Fri Aug 30, 2013 9:47 am

Quoting redzeppelin (Reply 15):
I wonder if the C-series was in contention

I don't think Bombardier has the capability to substitute 15 737NG on order with CS300  
 
Hamlet69
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RE: WestJet Letter Of Intent For 65 737MAX

Fri Aug 30, 2013 1:11 pm

Quoting chiad (Reply 25):
Because this is a firm order for 62 frames plus another 58 options.
The pending approval by the Board of Directors is for an aditional 100 frames.

  

The entire order is subject to shareholder approval, and thus not yet a firm order.

It clearly states so at the end of the IAG press release.


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pnwtraveler
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RE: WestJet Letter Of Intent For 65 737MAX

Fri Aug 30, 2013 3:02 pm

In the agreement it allows WestJet to switch orders to the Max 9 later if it wants. This would be a replacement of the 757's that are leased for winter volume seasons. The key to "buying" the 9 will be a volume destination that warrants those number of seats during the off season when Hawaii is less popular. In the meantime the bean counters like the winter lease option.

Airbus NEO and Bombardier C were looked at for due diligence but there was never a high probability of an order. With WestJet just adding the Q400 there would have to be a massive advantage to the C to warrant all the expense and setup to add yet another airframe to the fleet. IF it ever happens down the road I think it would be a widebody but the same caveat of the above paragraph applies. Canada is a frequency market and that is not going to change anytime soon.

I also think more and more AC will apply new smaller aircraft domestically except for aircraft utilization purposes (Rapidair widebody), repositioning and connecting on to an international destination (YYZ-YVR-SYD). The E Jets let them open new markets and replace less full A320 family jets. I see that continuing with the next narrow body order this fall. WestJet will continue as well to do so as well with less full flights transfered to regional service with the Q400,
 
behramjee
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RE: WestJet Letter Of Intent For 65 737MAX

Fri Aug 30, 2013 4:39 pm

I am surprised that WS did not see the attractiveness of ordering the B739MAX as that is an ideal aircraft for it to use on the trans-continental Canada domestic, Canada-U.S. West Coast + Canada-Florida/Caribbean flights (in winter especially).

Currently their B738s seat 174 pax in Y class where as for 8-9% higher operating costs (approximately), the B 739MAX can seat 204 i.e. 17% more. Wont the economics of this aircraft type especially for a LCC model carrier like WS be more attractive especially on the high volume medium range routes (3.5-5 hours)? Both the A321NEO and B739MAX have been very popular sellers for both Airbus and Boeing for the past year as their performance economics on paper offer attractive profit generating potential for LCCs focused on a regional network.

With this order, I for see the B737-700MAX initially replacing their 13 B736s and then some of the oldest B737-700s.
 
PlanesNTrains
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RE: WestJet Letter Of Intent For 65 737MAX

Fri Aug 30, 2013 4:52 pm

Quoting frigatebird (Reply 27):
Which means it will appear on Airbus' list of orders after the the shareholders meeting. If it is approved of course, but it would cause quite a stir in the company if it isn't.

I take it as a firm order "subject to shareholder approval". Certainly it is almost a certainty that it will be approved, but I guess I question how it can be described as "firm" if it is still subject to certain conditions? Of course, this probably happens behind-the-scenes all of the time on orders we deem "firm" on a.net.

Quoting Hamlet69 (Reply 29):
It clearly states so at the end of the IAG press release.

That's how I read it, but who knows?

-Dave
-Dave
 
Viscount724
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RE: WestJet Letter Of Intent For 65 737MAX

Fri Aug 30, 2013 10:16 pm

Quoting PlanesNTrains (Reply 32):
I take it as a firm order "subject to shareholder approval". Certainly it is almost a certainty that it will be approved, but I guess I question how it can be described as "firm" if it is still subject to certain conditions?

Boeing doesn't consider it firm until the final contract has been signed which normally involves money changing hands. I don't think a "letter of intent" even involves a non-refundable deposit.
http://boeing.mediaroom.com/2013-08-...t-to-Purchase-65-737-MAX-Airplanes

[Edited 2013-08-30 16:08:29]
 
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Stitch
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RE: WestJet Letter Of Intent For 65 737MAX

Fri Aug 30, 2013 10:49 pm

Quoting Viscount724 (Reply 33):
I don't (believe) a "letter of intent" even involves a non-refundable deposit.

I imagine there is some type of initial payment involved (which may or may not be refundable). The Kingfisher MoU with Airbus for their "Airbus Sampler Plate" order had a "Commitment Fee" attached to it and Boeing have noted that the various 737 MAX Commitments do involve a monetary deposit paid by the customer.
 
GUYAIR707
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RE: WestJet Letter Of Intent For 65 737MAX

Sat Aug 31, 2013 12:36 am

Quoting Stitch (Reply 22):

Makes sense, just can't understand why Boeing took so long to do this replacement for the 737, and why they are took so long with the 777X. Maybe cash flow as they had a difficult time with the 788.

I was watching Legends of Flight, again, and Mike Carriker was saying how many problems the 747, 767, and even the 777 had and what great "careers" they went on to have. He also said that in the middle of a problem you forget the previous problems you had.

GUYAIR707
 
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Stitch
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RE: WestJet Letter Of Intent For 65 737MAX

Sat Aug 31, 2013 12:52 am

Quoting GUYAIR707 (Reply 35):
Makes sense, just can't understand why Boeing took so long to do this replacement for the 737, and why they are took so long with the 777X. Maybe cash flow as they had a difficult time with the 788.

Thanks to very strong deliveries, Boeing has had very strong cash flow for quite a number of years.

Indications are that Boeing preferred to launch a new narrowbody family rather then perform another update to the 737. However, such a model would have entered service years after the A320neo family and would have entailed a fair bit more risk then the 737 MAX as well as impacted the significant investment in operations existing 737 customers have acquired.

As such, indications are that customers were more comfortable with another update to the 737 available sooner. And when you consider the 737 Classic and 737 Next Generation were very successful programs, it does help make the case for the MAX versus the NSA (New Small Airplane).

As for the 777X, I could see it being viewed by both Boeing and potential customers as the "777 Next Generation" and are hoping that it can hold it's own against the A350 as well as the 737 Next Generation has held it's own against the A320. Like the MAX, it entails less risk then launching a new large widebody twin family, is available sooner, and leverages the existing investment in the long-range 777 family (777 Freighter | 777-200LR | 777-300ER) and GE90-11xB engines.

[Edited 2013-08-30 17:55:14]
 
opethfan
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RE: WestJet Letter Of Intent For 65 737MAX

Sat Aug 31, 2013 7:47 am

I don't see WS being a CSeries customer at any point in the near future. With them just launching routes on the Q400, we'll see how they expand into the newer feeder routes and if any of them become large enough to warrant a bigger aircraft, some -600s would probably be placed on the routes. If the -600s are retired, then perhaps the CSeries may replace them, but I have my doubts.
 
YYCSpotter
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RE: WestJet Letter Of Intent For 65 737MAX

Sun Sep 08, 2013 4:23 am

I don't think that WS will retire the 736 anytime soon, as they seem to have found a nice niche for them, on long thin routes, or short thick routes, such as YLW-YYZ, and YYC-YEG, respectively. I know that YYC-YEG is slowly moving to encore, but during peak hours, they can easily put a 736 on the route. For example, the 1st flight of the day, from YYC-YEG is usually full of business travelers, doing business in Edmonton for the day, and a later flight (usually around 5:00) is full of those people flying home. Also, routes like YYC-YVR, can at times warrant a 738 (or even a 763 with AC), but during mid-day, when there is lower yields, a 736 can be put on the route, so there are less empty seats. For that reason I think WS will hold onto their 736s for a while longer.

Opinions?
I
 
opethfan
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RE: WestJet Letter Of Intent For 65 737MAX

Sun Sep 08, 2013 5:39 am

I agree that the 736s aren't going to be canned just yet, but WS clearly don't see much future in them. No new orders and only a baker's dozen left in the fleet according to Airfleets.

So when the time comes for the 736s, what will replace them? Does the commonality offered by the -7 cancel out the potential for empty seats compared to, say, a CSeries?
 
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yyz717
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RE: WestJet Letter Of Intent For 65 737MAX

Mon Sep 09, 2013 4:28 pm

No other carrier wants the 736 so WS may as well keep on operating them on the "thin" and off-peak-time routes to maximize the ROI (on the owned aircraft) and, if possible, get a lease rate reduction on the leased (according to atdb.org, 8 are owned and 5 are leased).

WS was able to off-load 10 older 73G's to WN (to be replaced by 10 new 738's) but most likely this can't be done with the 736 fleet with any other carrier.

As for the 739ER and MAX-9, is seems logical that WS will order either (or both) in due course. Of the remaining order for 27 NG, 14 have been firmed as 738's; the remaining 13 orders are identified as 73G but WS has been converting most 73G orders in recent years to the 738.
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