WN looking at A220

jreuschl · Tue Apr 23, 2019 5:20 pm

Jon Ostrower is reporting that WN is looking at the A220. At least kicking its tires from a euro operator:

https://theaircurrent.com/airlines/737- ... ationship/

WeatherPilot · Tue Apr 23, 2019 5:23 pm

They’re just doing their due diligence for their shareholders. If they pick a regional it’s going to be an E2-Jet since Boeing is acquiring the program.

N809FR · Tue Apr 23, 2019 5:24 pm

Would love if the part of the article about the A220 wasn’t behind a paywall. Anyone care to give a brief synopsis?

Scarebus34 · Tue Apr 23, 2019 5:25 pm

I don't think they are serious about it at all... it's just a warning shot to Boeing likely to strike a better deal on future orders. In fact, Gary Kelly has come out and stated that the Max is a "very good airplane" and they plan to order "hundreds" more.

https://www.inc.com/bill-murphy-jr/sout ... -lead.html

IWMBH · Tue Apr 23, 2019 5:25 pm

Im sure they're watching, but they aren't buying. Like Weatherpilot says it would be far more likely for WN to buy a E2-jet.

airportugal310 · Tue Apr 23, 2019 5:30 pm

Probably just doing it to appease the pilot unions comments of "all eggs in one basket" or something to that effect...

N809FR · Tue Apr 23, 2019 5:30 pm

IWMBH wrote:
Im sure they're watching, but they aren't buying. Like Weatherpilot says it would be far more likely for WN to buy a E2-jet.

Unless of course you consider the fact that the E2 isn’t likely to receive another stretch, making the A220 potentially able to cover a much larger market size for WN.

That said I can’t see them ordering anything other than the 737 until Boeing comes up with the NSA.

DarthLobster · Tue Apr 23, 2019 5:37 pm

Will never happen. It’s just WN jockeying for a discount from Boeing.

MIflyer12 · Tue Apr 23, 2019 5:41 pm

airportugal310 wrote:
Probably just doing it to appease the pilot unions comments of "all eggs in one basket" or something to that effect...

No, there will be a lengthy report with financial and strategic analysis. That's necessary for the due diligence as noted above. Fiduciary responsibilities and all that. And then the report will gather dust in a filing cabinet.

Gulfstream500 · Tue Apr 23, 2019 5:41 pm

It would be nice if WN started regional carrier operations... then maybe my airport would start to get WN flights.

rjmf22 · Tue Apr 23, 2019 5:43 pm

I don't think WN would ever acquire the a220. However the E2 is far more likely as stated above. I wonder what the chances are that they're thinking of something smaller, like the E175 for smaller airports with less capacity?

UPNYGuy · Tue Apr 23, 2019 5:52 pm

[threeid][/threeid]

Scarebus34 wrote:
I don't think they are serious about it at all... it's just a warning shot to Boeing likely to strike a better deal on future orders. In fact, Gary Kelly has come out and stated that the Max is a "very good airplane" and they plan to order "hundreds" more.

https://www.inc.com/bill-murphy-jr/sout ... -lead.html

Someone here posted an almost identical quote that GK said about the A220 (not the max) in another thread. Something about him calling it a “great plane”

So, I will see it when I believe it, but with another fleet type being more efficient than it has EVER been, I wouldn’t hold my breath. They are bound to add another jet sooner or later.

Earlier this month an NK driver told me that the 220-300 would have a lower CASM than the 320 (didn’t ask neo or ceo). But that mirrors what many of you here have been saying.

1900Driver · Tue Apr 23, 2019 5:56 pm

You’re all too quick to judge. The A220-300 size advantage & superior casm over the E2 is a far better fit as a 700 replacement. My bet is on the 220-300a in southwest colours.

wrongwayup · Tue Apr 23, 2019 5:58 pm

It would be irresponsible of Southwest leadership not to look at the A220. Whether for themselves or to understand what their competitors will have. That said Southwest will be a tough (not impossible though) nut for Airbus to crack - a lot of infrastructure built around the 737.

UPNYGuy · Tue Apr 23, 2019 5:58 pm

1900Driver wrote:
You’re all too quick to judge. The A220-300 size advantage & superior casm over the E2 is a far better fit as a 700 replacement. My bet is on the 220-300a in southwest colours.

That’s exactly why I said “I’ll believe it when I see it”, but I won’t bet a single cent against them adding a new type. At this point, they would be financially foolish to not to at least investigate it.

rjmf22 · Tue Apr 23, 2019 5:59 pm

1900Driver wrote:
You’re all too quick to judge. The A220-300 size advantage & superior casm over the E2 is a far better fit as a 700 replacement. My bet is on the 220-300a in southwest colours.

Logically, the replacement for the -700's is the MAX7. I believe they have 30 on order, which I expect to rise quickly if Boeing strikes them a good deal.

flyabr · Tue Apr 23, 2019 6:00 pm

At what point does the A220-300 look like an excellent 737-700 replacement? Given the 500+ 737-700s in the fleet, I could see some of the replacement cycle going with a lighter/more fuel efficient bird, instead of the 737 Max 7.

Biophobe99 · Tue Apr 23, 2019 6:06 pm

WN has over 750 aircraft and is still growing. Adding a second fleet type wouldn’t be that difficult and could provide them with a better aircraft to serve smaller markets that they can’t now. It’s a long shot but it’s not out of the realm of possibility.

WayexTDI · Tue Apr 23, 2019 6:11 pm

rjmf22 wrote:
I don't think WN would ever acquire the a220. However the E2 is far more likely as stated above. I wonder what the chances are that they're thinking of something smaller, like the E175 for smaller airports with less capacity?

If WN was to invest in another aircraft type than the 737 (especially in a different size category), all bets are off: they'd be irresponsible to go to the E2 IF the only reason is Boeing.
If they go to the E2 route, it'll be because the E2 has favorable numbers for their needs; similarly, if they go the A220 route, it'll be because the A220 has favorable numbers for their needs.

If people believe otherwise, they are kidding themselves. WN has a financial responsibility to their shareholders; doing otherwise would result in a lawsuit as they'd be robbed from profit.
Note that I said "the xxx has favorable numbers"; this can be achieved by a very favorable acquisition/spare/training price set by the OEM (and that might as well what Boeing would do to keep Airbus out of WN property).

strfyr51 · Tue Apr 23, 2019 7:12 pm

rjmf22 wrote:
I don't think WN would ever acquire the a220. However the E2 is far more likely as stated above. I wonder what the chances are that they're thinking of something smaller, like the E175 for smaller airports with less capacity?

wouldn't that put WN in the mix with a possible super hub situation? Unless they intend to fly those airplanes point to point. Since they're already flying Jam packed?
I could not see them flying hub and spoke. It'd not like they have the room to feed flights on already full airplanes.

rjmf22 · Tue Apr 23, 2019 7:18 pm

strfyr51 wrote:
rjmf22 wrote:
I don't think WN would ever acquire the a220. However the E2 is far more likely as stated above. I wonder what the chances are that they're thinking of something smaller, like the E175 for smaller airports with less capacity?

wouldn't that put WN in the mix with a possible super hub situation? Unless they intend to fly those airplanes point to point. Since they're already flying Jam packed?
I could not see them flying hub and spoke. It'd not like they have the room to feed flights on already full airplanes.

Depends where they would fly them to. But at any rate, I highly doubt we will see them moving away from the 737 program.

lightsaber · Tue Apr 23, 2019 7:31 pm

WayexTDI wrote:
rjmf22 wrote:
I don't think WN would ever acquire the a220. However the E2 is far more likely as stated above. I wonder what the chances are that they're thinking of something smaller, like the E175 for smaller airports with less capacity?

If WN was to invest in another aircraft type than the 737 (especially in a different size category), all bets are off: they'd be irresponsible to go to the E2 IF the only reason is Boeing.
If they go to the E2 route, it'll be because the E2 has favorable numbers for their needs; similarly, if they go the A220 route, it'll be because the A220 has favorable numbers for their needs.

If people believe otherwise, they are kidding themselves. WN has a financial responsibility to their shareholders; doing otherwise would result in a lawsuit as they'd be robbed from profit.
Note that I said "the xxx has favorable numbers"; this can be achieved by a very favorable acquisition/spare/training price set by the OEM (and that might as well what Boeing would do to keep Airbus out of WN property).

Agreed, if WN could adopt a 2nd type. They need a pilot contract, supply chain...

I don't think they are ready.

Lightsaber

SurlyBonds · Tue Apr 23, 2019 7:32 pm

MIflyer12 wrote:
airportugal310 wrote:
Probably just doing it to appease the pilot unions comments of "all eggs in one basket" or something to that effect...

No, there will be a lengthy report with financial and strategic analysis. That's necessary for the due diligence as noted above. Fiduciary responsibilities and all that. And then the report will gather dust in a filing cabinet.

The thing is, I find it very difficult to believe that "fiduciary duties" dictate reviewing proposals for the A220. The business judgement rule gives very wide latitude to directors. I think it is more about keeping abreast of the market and constantly reviewing assumptions to see if they hold up.

OA940 · Tue Apr 23, 2019 7:35 pm

All the people saying ''never'' clearly don't know how businesses work. Any rational airline executive would look at all available options before ordering. We occasionally see airlines switching types (like flyadeal did by ordering the MAX). Now, is this very unlikely and probably a warning to Boeing/Embraer? Yes, it is. But it's not ''never gonna happen'' or ''no way'' or whatever. This applies to all headlines like this.

Personally (as a worshipper at the altair of the A220) I'd absolutely love another major customer, especially one with this much influence. An E2 order would also be amazing, but neither is very likely to happen as stated above. As for now I'm keeping my fingers crossed.

WayexTDI · Tue Apr 23, 2019 7:36 pm

SurlyBonds wrote:
MIflyer12 wrote:
airportugal310 wrote:
Probably just doing it to appease the pilot unions comments of "all eggs in one basket" or something to that effect...

No, there will be a lengthy report with financial and strategic analysis. That's necessary for the due diligence as noted above. Fiduciary responsibilities and all that. And then the report will gather dust in a filing cabinet.

The thing is, I find it very difficult to believe that "fiduciary duties" dictate reviewing proposals for the A220. The business judgement rule gives very wide latitude to directors. I think it is more about keeping abreast of the market and constantly reviewing assumptions to see if they hold up.

Except if the profit (and thus the shareholder dividends) are drastically reduced because the directors favored one OEM despite higher cost (which is often done with some sort of bribery).
Look at what's happening now to Boeing: shareholders are suing Boeing because the stock tanked and the profit will go south due to the 737 MAX issues. Shareholders want the stock and dividends high.

usflyguy · Tue Apr 23, 2019 7:37 pm

strfyr51 wrote:
rjmf22 wrote:
I don't think WN would ever acquire the a220. However the E2 is far more likely as stated above. I wonder what the chances are that they're thinking of something smaller, like the E175 for smaller airports with less capacity?

wouldn't that put WN in the mix with a possible super hub situation? Unless they intend to fly those airplanes point to point. Since they're already flying Jam packed?
I could not see them flying hub and spoke. It'd not like they have the room to feed flights on already full airplanes.

WN utilizes a mix of point-to-point and hub-and-spoke. Smaller cities like RIC, CRP, HRL, AMA, CHS, GSP, MHT, etc... go to ATL, BWI, HOU, DAL and then are dispersed to the rest of the system with a minimal number of point-to-point routes. Additional smaller cities could be added with the smaller frames.

UPNYGuy · Tue Apr 23, 2019 8:06 pm

OA940 wrote:
All the people saying ''never'' clearly don't know how businesses work. Any rational airline executive would look at all available options before ordering. We occasionally see airlines switching types (like flyadeal did by ordering the MAX). Now, is this very unlikely and probably a warning to Boeing/Embraer? Yes, it is. But it's not ''never gonna happen'' or ''no way'' or whatever. This applies to all headlines like this.

Personally (as a worshipper at the altair of the A220) I'd absolutely love another major customer, especially one with this much influence. An E2 order would also be amazing, but neither is very likely to happen as stated above. As for now I'm keeping my fingers crossed.

^^^this

frmrCapCadet · Tue Apr 23, 2019 8:34 pm

If the NMA is as good as most of us hope, and does well at lesser ranges, the NSA will be smaller than the NG and MAX. The problem, of course is that NSA is at least ten years out.

Bobloblaw · Tue Apr 23, 2019 9:03 pm

1900Driver wrote:
You’re all too quick to judge. The A220-300 size advantage & superior casm over the E2 is a far better fit as a 700 replacement. My bet is on the 220-300a in southwest colours.

The MAX 7 is the 700 replacement. Southwest is looking at the A220 so they can understand the economics of the plane that delta and JetBlue will be flying. Southwest had evaluated just about every type of plane in the past including the Avro85s. Doesn’t mean they are going to buy them.

lightsaber · Tue Apr 23, 2019 9:06 pm

OA940 wrote:
All the people saying ''never'' clearly don't know how businesses work. Any rational airline executive would look at all available options before ordering. We occasionally see airlines switching types (like flyadeal did by ordering the MAX). Now, is this very unlikely and probably a warning to Boeing/Embraer? Yes, it is. But it's not ''never gonna happen'' or ''no way'' or whatever. This applies to all headlines like this.

Personally (as a worshipper at the altair of the A220) I'd absolutely love another major customer, especially one with this much influence. An E2 order would also be amazing, but neither is very likely to happen as stated above. As for now I'm keeping my fingers crossed.

I agree with all of your statement. In particular how a WN order for either the A220 or E2 would benefit both airframes. But neither is likely.

Lightsaber

crimsonchin · Tue Apr 23, 2019 9:08 pm

Hopefully, A.net will display banners with crisis hotlines based in the US at the top of the thread if this order ever happens.

UPNYGuy · Tue Apr 23, 2019 9:31 pm

crimsonchin wrote:
Hopefully, A.net will display banners with crisis hotlines based in the US at the top of the thread if this order ever happens.

No different than the members that treat the 757 like it’s a playboy centerfold :duck:

Lufthansa · Tue Apr 23, 2019 9:47 pm

WN have already dealt with multiple fleet types in the past. They've had 727s along side 737-200s, Air Trans ex fleet of 717s before them quickly going to delta (note they still flew for a while) and multiple generations of 737s that required different maintenance etc.

Next other LCC around the world successfully do it. JetBlue. Jetstar. Eurowings etc. Even Ryanair has pointed out they could operate two types, and said it would be as simple as them sending A320s to the Mediterranean and 737s to Northern Europe, with zero impact on their model and Easyjet actually did this for a while.

Sooner or later WN WILL need a 737 replacement. Even after Boeing sorts this max mess out, the type will still have a degree of stigma to part of the public
plus this is absolutely its last generation. So unless you plan on shutting Southwest down, sooner or later that means moving away from the 737.

JamesCousins · Tue Apr 23, 2019 9:50 pm

WayexTDI wrote:
SurlyBonds wrote:
MIflyer12 wrote:

No, there will be a lengthy report with financial and strategic analysis. That's necessary for the due diligence as noted above. Fiduciary responsibilities and all that. And then the report will gather dust in a filing cabinet.

The thing is, I find it very difficult to believe that "fiduciary duties" dictate reviewing proposals for the A220. The business judgement rule gives very wide latitude to directors. I think it is more about keeping abreast of the market and constantly reviewing assumptions to see if they hold up.

Except if the profit (and thus the shareholder dividends) are drastically reduced because the directors favored one OEM despite higher cost (which is often done with some sort of bribery).
Look at what's happening now to Boeing: shareholders are suing Boeing because the stock tanked and the profit will go south due to the 737 MAX issues. Shareholders want the stock and dividends high.

You're talking rubbish, given the 'crisis' at Boeing at the moment the share price has held up remarkably well - it's been incredibly resilient and there's been countless articles to the tune of it. What shareholders are suing Boeing? Imagine if all shareholders sued their major assets every time things went south - that's the risks of investing...

I'd love an A220 in Southwest colours but comments like this are baseless

DDR · Tue Apr 23, 2019 10:08 pm

Eventually WN will get to the point that growth will be difficult because they will be flying all the routes there are that can sustain 737 size aircraft. In order to continue to grow, they will be forced to look at smaller markets and will need an aircraft smaller than the 737. However that scenario is probably still years away.

Fargo · Tue Apr 23, 2019 10:12 pm

DDR wrote:
Eventually WN will get to the point that growth will be difficult because they will be flying all the routes there are that can sustain 737 size aircraft. In order to continue to grow, they will be forced to look at smaller markets and will need an aircraft smaller than the 737. However that scenario is probably still years away.

No, I'd say it's just around the corner. There really isn't much more WN can do domestically without a smaller aircraft. The A220 would be beautiful in their fleet and enable them to serve markets that have less than 1,000,000 people. Unfortunately, it probably won't happen.

DDR · Tue Apr 23, 2019 10:16 pm

Fargo wrote:
DDR wrote:
Eventually WN will get to the point that growth will be difficult because they will be flying all the routes there are that can sustain 737 size aircraft. In order to continue to grow, they will be forced to look at smaller markets and will need an aircraft smaller than the 737. However that scenario is probably still years away.

No, I'd say it's just around the corner. There really isn't much more WN can do domestically without a smaller aircraft. The A220 would be beautiful in their fleet and enable them to serve markets that have less than 1,000,000 people. Unfortunately, it probably won't happen.

The A220 would look sweet in WN colors. The question is,,, would it be actual WN or would they set up a regional airline to operate the plane? I know, I know, their current pilot contract doesn't allow it but things change.

metaldirtnskin · Tue Apr 23, 2019 10:23 pm

Consider that WN has 30 MAX 7 on order and 250 MAX 8, while about two-thirds of their current fleet are 73G. Either that will represent a significant shift in fleet mix for them over the next several years, or nearly all of their 738s are much older than the 73Gs, or... uh... something else will happen.

smflyer · Tue Apr 23, 2019 10:26 pm

I kind of predicted that they would do this as they don't have a long term replacement for the 737-700 especially for routes that 175 seats in the 738 is not needed. A220 is the perfect aircraft to replace some of the 737s for low capacity routes that the 738/7M8 would be a bad fit for.

Revelation · Tue Apr 23, 2019 10:27 pm

Fargo wrote:
DDR wrote:
Eventually WN will get to the point that growth will be difficult because they will be flying all the routes there are that can sustain 737 size aircraft. In order to continue to grow, they will be forced to look at smaller markets and will need an aircraft smaller than the 737. However that scenario is probably still years away.

No, I'd say it's just around the corner. There really isn't much more WN can do domestically without a smaller aircraft. The A220 would be beautiful in their fleet and enable them to serve markets that have less than 1,000,000 people. Unfortunately, it probably won't happen.

I guess you forget the time they got 717s via the AirTran acquisition, and paid their competitor DL (and are still paying DL) to take them off their hands?

DDR · Tue Apr 23, 2019 10:30 pm

Revelation wrote:
Fargo wrote:
DDR wrote:
Eventually WN will get to the point that growth will be difficult because they will be flying all the routes there are that can sustain 737 size aircraft. In order to continue to grow, they will be forced to look at smaller markets and will need an aircraft smaller than the 737. However that scenario is probably still years away.

No, I'd say it's just around the corner. There really isn't much more WN can do domestically without a smaller aircraft. The A220 would be beautiful in their fleet and enable them to serve markets that have less than 1,000,000 people. Unfortunately, it probably won't happen.

I guess you forget the time they got 717s via the AirTran acquisition, and paid their competitor DL (and are still paying DL) to take them off their hands?

Nope, didn't forget but thanks for your comment on the discussion. The 717 costs more to operate than an A220. The 717 would not have worked at WN. In the future, the A220 just might.

SEU · Tue Apr 23, 2019 10:56 pm

Any airline CEO that doesnt evaluate every plane in the market is not a good airline CEO. Its just business at the end of the day. WN will look at ALL planes that fit in and around their business requirements, even if they know the chances are they will never buy them. Airbus will send WN A320 pamphlets through the postbox every month. Does it mean WN will never buy the A220? Of course they might.

Weatherwatcher1 · Wed Apr 24, 2019 1:02 am

Whether it is the NMA or A220, I think it is reasonable for Southwest to look at options in the next decade. Their business model has evolved towards higher volume routes, but they still have many small routes.

Markets like El Paso to San Antonio or St Louis to Omaha or Kansas City to Indianapolis are too big for the 737-8. They have plenty of 737-700s with a decade or more of remaining life so it isn’t a decision that has to be made quickly. If Southwest wants to maintain 2-3 daily flights in markets like these, they need a plane with 150 or fewer seats otherwise yields and load factors will be unsustainable.

wjcandee · Wed Apr 24, 2019 1:24 am

Revelation wrote:
Fargo wrote:
DDR wrote:
Eventually WN will get to the point that growth will be difficult because they will be flying all the routes there are that can sustain
737 size aircraft. In order to continue to grow, they will be forced to look at smaller markets and will need an aircraft smaller than the 737. However that scenario is probably still years away.

No, I'd say it's just around the corner. There really isn't much more WN can do domestically without a smaller aircraft. The A220 would be beautiful in their fleet and enable them to serve markets that have less than 1,000,000 people. Unfortunately, it probably won't happen.

I guess you forget the time they got 717s via the AirTran acquisition, and paid their competitor DL (and are still paying DL) to take them off their hands?

True, but the reason they bought Airtran was ten-thousand-percent to take a price competitor out of the market. No more, no less. In order to make their actions seem less anticompetitive, they talked about how great the 717s would be and how two fleets would be okay and how they were prepared to learn from Airtran and blah blah and it was total nonsense. Maybe the people who were saying it believed it, but there is no way the executive suite had any intention of having any remnant of Airtran stick around, and it didn't. Southwest got a bunch of happy, hardworking pilots and the elimination of a competitor, which was enough. Beyond that, from dehubbing ATL to dumping the 717s, Airtran was a goner. If DL hadn't taken the 717s, WN would have cut some other deal with Boeing that would allow them to be dumped, perhaps not as quickly.

The "cost" of getting rid of the 717s was -- and I defy anybody to prove otherwise -- already built into the most-secret of their financial calculations, and the DL sale was just a stroke of good luck that significantly-reduced what was already an expected cost of the Tran acquisition.

Actually looking at a different aircraft as a voluntary choice is a whole different animal. And you have to look at every aircraft, if for no other reason to understand the limitations it imposes upon any of your competitors who buy it. It is rarely discussed on this forum, but a huge part of competing is understanding your competitors, one by one, their strengths, weaknesses, and limitations, and whether they are likely to zig or zag if you do X.

That said, WN is not actually going to give up on the 737s unless somebody forces them to, and nobody is going to do that. Shareholders understand the eggs-in-one-basket thing, but the reality is that 95-percent of the existing fleet is made up of models of 737 that are proven and have wholly-predictable operating characteristics and maintenance issues. Nothing is going to be "discovered" about the 737-700 or -800 that would lead to a grounding, except at the infinitely-furthest reaches of the probability curve.

WayexTDI · Wed Apr 24, 2019 1:50 am

JamesCousins wrote:
WayexTDI wrote:
SurlyBonds wrote:

The thing is, I find it very difficult to believe that "fiduciary duties" dictate reviewing proposals for the A220. The business judgement rule gives very wide latitude to directors. I think it is more about keeping abreast of the market and constantly reviewing assumptions to see if they hold up.

Except if the profit (and thus the shareholder dividends) are drastically reduced because the directors favored one OEM despite higher cost (which is often done with some sort of bribery).
Look at what's happening now to Boeing: shareholders are suing Boeing because the stock tanked and the profit will go south due to the 737 MAX issues. Shareholders want the stock and dividends high.

You're talking rubbish, given the 'crisis' at Boeing at the moment the share price has held up remarkably well - it's been incredibly resilient and there's been countless articles to the tune of it. What shareholders are suing Boeing? Imagine if all shareholders sued their major assets every time things went south - that's the risks of investing...

I'd love an A220 in Southwest colours but comments like this are baseless

A VERY quick Google search:
Shareholder suing Boeing, alleges investors were misled about 737 Max jet
Boeing shareholders sue over 737 MAX crashes, disclosures
Boeing shareholders are suing the company, claiming it put safety at risk in a reckless pursuit of profits that ended in the 2 fatal 737 Max crashes
Right there, you discredited yourself. My comment was founded on actual facts.

As far as the share price:
- March 1, 2019: $440.62 (ET302 happened March 10);
- April 10, 2019: $364.94 (when the news about the lawsuits came out).
Lost 17.17%.
Yes, stock investment is a risky business; but, if it is proven the stock tanked due to negligence (and you lost $$$ in the process), you'll do whatever it takes to try and recoup some of those losses.

1900Driver · Wed Apr 24, 2019 1:58 am

Bobloblaw wrote:
1900Driver wrote:
You’re all too quick to judge. The A220-300 size advantage & superior casm over the E2 is a far better fit as a 700 replacement. My bet is on the 220-300a in southwest colours.

The MAX 7 is the 700 replacement. Southwest is looking at the A220 so they can understand the economics of the plane that delta and JetBlue will be flying. Southwest had evaluated just about every type of plane in the past including the Avro85s. Doesn’t mean they are going to buy them.

Spoken as if you’re an executive at the company (or Boeing better yet).

The malaisé that surrounds the max program is a deep wake up call for common fleet type operators globally. The rational is slowly losing out to having a diversified strategy.

Could you even imagine if the MCAS issue happened next year? They would be @&$)ed.

1900Driver · Wed Apr 24, 2019 2:03 am

JamesCousins wrote:
WayexTDI wrote:
SurlyBonds wrote:

The thing is, I find it very difficult to believe that "fiduciary duties" dictate reviewing proposals for the A220. The business judgement rule gives very wide latitude to directors. I think it is more about keeping abreast of the market and constantly reviewing assumptions to see if they hold up.

Except if the profit (and thus the shareholder dividends) are drastically reduced because the directors favored one OEM despite higher cost (which is often done with some sort of bribery).
Look at what's happening now to Boeing: shareholders are suing Boeing because the stock tanked and the profit will go south due to the 737 MAX issues. Shareholders want the stock and dividends high.

You're talking rubbish, given the 'crisis' at Boeing at the moment the share price has held up remarkably well - it's been incredibly resilient and there's been countless articles to the tune of it. What shareholders are suing Boeing? Imagine if all shareholders sued their major assets every time things went south - that's the risks of investing...

I'd love an A220 in Southwest colours but comments like this are baseless

You do realize what has happened?? This issue is beyond major and you better believe operators are going to file lawsuits. Norwegian has already stated that they would, while others will follow suit once the dust settles. People lost their lives, don’t forget that.

BA stock has held up well since they’re a diversified company, with other sources of CF.

YoungDon · Wed Apr 24, 2019 3:18 am

They should certainly look into the A220. But they really need to look at themselves and decide who they want to be going forward. They have long since graduated from niche LCC and are starting to max out the growth they can achieve with their current fleet. Stepping down and competing in smaller markets makes more sense to me than trying to make the jump to more international markets - they would have a lot less issues with name recognition and brand value in a place like AVL or CID than they have had in places like MEX. They are big enough that they can probably absorb the additional costs associated with having two aircraft types, provided they can get the labor side worked out sufficiently. Smaller aircraft seems like a logical progression for them to fuel mid-term growth.

planecane · Wed Apr 24, 2019 3:40 am

smflyer wrote:
I kind of predicted that they would do this as they don't have a long term replacement for the 737-700 especially for routes that 175 seats in the 738 is not needed. A220 is the perfect aircraft to replace some of the 737s for low capacity routes that the 738/7M8 would be a bad fit for.

I just don't see a great need for a 737-700 replacement anytime soon. I doubt they are very interested in markets that can't support the -700. They can use the MAX8 (when it is flying again) to retire whatever 700s need to be retired and deploy the remaining hundreds of 700s to smaller markets. I can't imagine them needing a true sub 150 seat replacement for a decade. By then, the A220NEO will probably be on offer and the Boeing/Embraer JV will launch something as well.

Since WN's business model is based on point to point routes, they don't really need smaller markets for feeder traffic to fill planes. They can grow by simply replacing 143 seat 700s with 175 seat MAX8s in the markets that can support it. That's potentially 22% growth (yes, I know yield will probably drop a little) per replaced aircraft.

I certainly won't say it's not a possibility for them to order the A220 but with a mostly pretty young fleet of 754 aircraft and 276 MAXs on order, I just don't see the need to add another type. To make adding a type make sense, I'd assume they'd need 100-200 of them. With current fleet and orders plus another 100-200 they'd end up with more aircraft than AA. Considering that 155 of AAs aircraft are A330, 767, 777 and 787 that serve a long range international market that WN doesn't touch, I think a fleet of 900-1000 aircraft, all under 175 seats and none able to to more than edge of coasts transatlantic would probably be too much for WN.

airzona11 · Wed Apr 24, 2019 4:06 am

YoungDon wrote:
They should certainly look into the A220. But they really need to look at themselves and decide who they want to be going forward. They have long since graduated from niche LCC and are starting to max out the growth they can achieve with their current fleet. Stepping down and competing in smaller markets makes more sense to me than trying to make the jump to more international markets - they would have a lot less issues with name recognition and brand value in a place like AVL or CID than they have had in places like MEX. They are big enough that they can probably absorb the additional costs associated with having two aircraft types, provided they can get the labor side worked out sufficiently. Smaller aircraft seems like a logical progression for them to fuel mid-term growth.

However, going down market is not the way to profitability. The only way to do that is via connection carriers with lower costs. WN has some of the highest paid staff in the industry. More 737s to 738s is the move. Then the potential from 738s to 7310s. All airlines are packing more seats in larger narrowbodies. WN is the largest domestic airline in the world, profitability has stayed consistent, they know how to run an airline. With their current fleet, Southwest could start to enter more coast to coast flights, in addition to Hawaii. SFO/LAX/PHX/LAS/SAN to BOS/NYC etc are still small if nonexistent for them.

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