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bob75013
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Re: Southwest maybe considering an Airbus order

Thu Nov 12, 2020 4:30 pm

ArcticSEA wrote:
eraugrad02 wrote:
Well Boeing was listening and came through. SW looks like they'll be ordering 30 of the "white tail" 737-8's.

Here's a video
https://www.youtube.com/watch?v=8Zp-n8PYYx4

Enjoy your day,
Des

Random guy with YouTube channel makes video. Therefore, it must be true.



What about the Bloomberg article earlier in the thread?
 
Jetport
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Re: Southwest maybe considering an Airbus order

Thu Nov 12, 2020 9:55 pm

I still think the odds of an A220 order from LUV are very low. Southwest never overpays for aircraft, and Airbus desperately needs higher pricing for the A220 since the program is bleeding cash with no end in sight. The only way Southwest orders the A220 is at Delta type pricing, which is just too low. One of the reasons the A220 program is in such bad financial shape was the pricing Bombardier gave Delta to get the first large order for the C Series/A220 at the time. Airbus can't afford any more Delta type pricing contracts for the A220.
 
SXDFC
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Re: Southwest maybe considering an Airbus order

Thu Nov 12, 2020 10:45 pm

Jetport wrote:
I still think the odds of an A220 order from LUV are very low. Southwest never overpays for aircraft, and Airbus desperately needs higher pricing for the A220 since the program is bleeding cash with no end in sight. The only way Southwest orders the A220 is at Delta type pricing, which is just too low. One of the reasons the A220 program is in such bad financial shape was the pricing Bombardier gave Delta to get the first large order for the C Series/A220 at the time. Airbus can't afford any more Delta type pricing contracts for the A220.


Out of curiosity, why do you consistently refer to them as LUV? I know that's their stock symbol.. Has a-net become wallstreet? :lol:
 
ctrabs0114
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Re: Southwest maybe considering an Airbus order

Fri Nov 13, 2020 5:12 pm

christao17 wrote:
9252fly wrote:
They might get a great offer from Airbus as a launch operator for the A225. WN is large enough to have critical mass allowing for a second type to be efficiently operated.


Exactly. Given their size, it would be irresponsible for their management not to evaluate all options. The art of strategy is knowing when it needs to change. Just because WN has always been an "all-737" operator doesn't mean that will always be the right strategy in the future.


*AS has joined the chat*

Remember when AS proudly boasted an "all-Boeing" fleet on their planes before the VX merger brought in the A320 family?

Just because WN is an all-737 operator now, that doesn't mean they will be forever. Eventually, the reality is going to set in that a different type will be added to WN's fleet within the next 10-20 years. If nothing else, WN is doing due diligence to see what options are out there in a post-737 world.
2019: DAL, MCI, PHX, LAS, DFW, SAT, ORD, SLC, SEA, DTW, PHL, MIA, LAX; B73G (WN x3), B738 (WN, AA, DL), A20N (NK), MD83 (AA), B788 (AA x2), CS1 (DL), B739 (DL), B712 (DL), B752 (AA), B763 (AA), B77W (AA), B789 (AA)
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ctrabs0114
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Re: Southwest maybe considering an Airbus order

Fri Nov 13, 2020 5:16 pm

sunking737 wrote:
Refresh my memory but Alaska is dumping all their Airbus aircraft to stay with Boeing..WN will stay with Boeing.


Apples and oranges, actually.

AS inherited their current A320-family fleet from the VX merger.

WN is potentially looking to directly purchase a fleet that's not the 737 (whether they do or not is obviously another story).

Just because AS makes moves to return to an all-B fleet, that doesn't necessarily mean that WN will be doing the same thing.
2019: DAL, MCI, PHX, LAS, DFW, SAT, ORD, SLC, SEA, DTW, PHL, MIA, LAX; B73G (WN x3), B738 (WN, AA, DL), A20N (NK), MD83 (AA), B788 (AA x2), CS1 (DL), B739 (DL), B712 (DL), B752 (AA), B763 (AA), B77W (AA), B789 (AA)
Next: TBA
 
ctrabs0114
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Re: Southwest maybe considering an Airbus order

Fri Nov 13, 2020 5:47 pm

ArcticSEA wrote:
eraugrad02 wrote:
Well Boeing was listening and came through. SW looks like they'll be ordering 30 of the "white tail" 737-8's.

Here's a video
https://www.youtube.com/watch?v=8Zp-n8PYYx4

Enjoy your day,
Des

Random guy with YouTube channel makes video. Therefore, it must be true.


I had never heard of this YT channel before. Good grief that was a beating watching that video...
2019: DAL, MCI, PHX, LAS, DFW, SAT, ORD, SLC, SEA, DTW, PHL, MIA, LAX; B73G (WN x3), B738 (WN, AA, DL), A20N (NK), MD83 (AA), B788 (AA x2), CS1 (DL), B739 (DL), B712 (DL), B752 (AA), B763 (AA), B77W (AA), B789 (AA)
Next: TBA
 
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Revelation
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Re: Southwest maybe considering an Airbus order

Thu Nov 19, 2020 8:15 pm

Meanwhile, in Texas:

@SouthwestAir is focused on a deal to take more 737-7 and is ``not actively engaged in looking at the A220,'' CEO Gary Kelly reiterated today.

Ref: https://twitter.com/juliejohnsson/statu ... 1958282241
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strfyr51
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Re: Southwest maybe considering an Airbus order

Thu Nov 19, 2020 8:31 pm

Boof02671 wrote:
Well I guess they aren’t buying the A220

WN in advanced talks with Boeing to buy the 737 Max white tails

https://www.bloomberg.com/news/articles ... ost-buyers

************************************************************************************************************************************************
with Airlines dropping their New 737 purchases? WN is in line to reap Massive benefits as they not only KNOW but respect the 737 platform. And?
I strongly suspect they'd have a hand in whatever replaces the 737 in coming years.
 
strfyr51
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Re: Southwest maybe considering an Airbus order

Thu Nov 19, 2020 8:42 pm

ctrabs0114 wrote:
christao17 wrote:
9252fly wrote:
They might get a great offer from Airbus as a launch operator for the A225. WN is large enough to have critical mass allowing for a second type to be efficiently operated.


Exactly. Given their size, it would be irresponsible for their management not to evaluate all options. The art of strategy is knowing when it needs to change. Just because WN has always been an "all-737" operator doesn't mean that will always be the right strategy in the future.


*AS has joined the chat*

Remember when AS proudly boasted an "all-Boeing" fleet on their planes before the VX merger brought in the A320 family?

Just because WN is an all-737 operator now, that doesn't mean they will be forever. Eventually, the reality is going to set in that a different type will be added to WN's fleet within the next 10-20 years. If nothing else, WN is doing due diligence to see what options are out there in a post-737 world.

AS didn't have a choice But to become a mixed fleet. Virgin America was already flying Airbus Airplanes and had more on order. Had they Minded? They could just as easily Not taken up the merger and let VA go with a Jet Blue or a Frontier tie up. So? maybe it was the lesser of 2 evils rather than a preference. AS wanted the Expansion and VA was the vehicle FOR the expansion. Makes perfect Business sense.. So Now? the Question is? Will they further Expand with Boeing Airplanes? OR Airbus? They can play them both.
 
MIflyer12
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Re: Southwest maybe considering an Airbus order

Thu Nov 19, 2020 9:19 pm

Revelation wrote:
Meanwhile, in Texas:

@SouthwestAir is focused on a deal to take more 737-7 and is ``not actively engaged in looking at the A220,'' CEO Gary Kelly reiterated today.

Ref: https://twitter.com/juliejohnsson/statu ... 1958282241


I'm not disputing the tweet but I'd love to know how he reiterated this stance, and see it in writing with the 100 words immediately preceding it and following it. You know - for context.
 
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Revelation
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Re: Southwest maybe considering an Airbus order

Thu Nov 19, 2020 11:18 pm

MIflyer12 wrote:
Revelation wrote:
Meanwhile, in Texas:

@SouthwestAir is focused on a deal to take more 737-7 and is ``not actively engaged in looking at the A220,'' CEO Gary Kelly reiterated today.

Ref: https://twitter.com/juliejohnsson/statu ... 1958282241


I'm not disputing the tweet but I'd love to know how he reiterated this stance, and see it in writing with the 100 words immediately preceding it and following it. You know - for context.

I'm on the move now, maybe I'll dig up the full quote later.

Meanwhile, I'll point out that Julie Johnsson is an aviation reporter for Bloomberg and IMO is very reliable...
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keesje
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Re: Southwest maybe considering an Airbus order

Fri Nov 20, 2020 11:22 am

Revelation wrote:
MIflyer12 wrote:
Revelation wrote:


I'm not disputing the tweet but I'd love to know how he reiterated this stance, and see it in writing with the 100 words immediately preceding it and following it. You know - for context.

I'm on the move now, maybe I'll dig up the full quote later.

Meanwhile, I'll point out that Julie Johnsson is an aviation reporter for Bloomberg and IMO is very reliable...


As you both correctly suspected, digging up the full quote is often valuable in cases like this :indifferent:

“So we are not actively engaged in looking at the A220 at this point,” he said. “That’s not to say we won’t be. Right now, we’re simply focused on our discussions with Boeing and the Max 7.”


https://finance.yahoo.com/news/boeing-c ... yf3BLP2uBW
"Never mistake motion for action." Ernest Hemingway
 
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Revelation
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Re: Southwest maybe considering an Airbus order

Fri Nov 20, 2020 3:03 pm

keesje wrote:
Revelation wrote:
MIflyer12 wrote:
I'm not disputing the tweet but I'd love to know how he reiterated this stance, and see it in writing with the 100 words immediately preceding it and following it. You know - for context.

I'm on the move now, maybe I'll dig up the full quote later.

Meanwhile, I'll point out that Julie Johnsson is an aviation reporter for Bloomberg and IMO is very reliable...

As you both correctly suspected, digging up the full quote is often valuable in cases like this :indifferent:

“So we are not actively engaged in looking at the A220 at this point,” he said. “That’s not to say we won’t be. Right now, we’re simply focused on our discussions with Boeing and the Max 7.”


Does that context change anything?

All along A220 has been considered just to cover the bases, that is still the case. Once WN orders MAX-7 there really is no role for A220 in their fleet. A win for MAX-7 means a loss for A220 with no opportunity for it to enter WN's fleet till the MAX runs its course.

If we're going to add context, let's be more complete about it:

Both parties are highly motivated to get a deal done, Southwest Chief Executive Officer Gary Kelly told reporters Thursday. “I don’t want this to go on for another six months,” he said.

As the grounding forced Southwest to cancel hundreds of flights each day last year, the airline considered adding Airbus SE’s A220 jetliner to its fleet -- a move that would mark a historic rupture with Boeing for the all-737 operator. But the pressures from the pandemic “changed our priorities quite a bit,” and the company for now is focused on the Max 7 to complement its order for the larger -8, Kelly said.

“So we are not actively engaged in looking at the A220 at this point,” he said. “That’s not to say we won’t be. Right now, we’re simply focused on our discussions with Boeing and the Max 7.”


Hard to read this as anything other than WN making a large order for MAX-7 in the next six months and A220 being left on the outside looking in, its role as a stalking horse and a media talking point having been played out, remaining on standby for a similar role and fate at some point in the future should the board get grumpy again.
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keesje
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Re: Southwest maybe considering an Airbus order

Fri Nov 20, 2020 3:27 pm

I think not much has changed since SWA pushed out the 737-7, before the crashes. Not sure who the stalking horse here, the popular A220-300 or no customer 737-7. Comparing the two, you need a lot of creativity to make the -7 look better.
"Never mistake motion for action." Ernest Hemingway
 
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Polot
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Re: Southwest maybe considering an Airbus order

Fri Nov 20, 2020 3:36 pm

keesje wrote:
I think not much has changed since SWA pushed out the 737-7, before the crashes. Not sure who the stalking horse here, the popular A220-300 or no customer 737-7.

Southwest came to the same conclusion that Spirit did when looking between the popular A220-300 or no customer A319neo- at this point in time single family commonality overrides A223 efficiency benefit.
 
SA280
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Re: Southwest maybe considering an Airbus order

Fri Nov 20, 2020 8:03 pm

Polot wrote:
keesje wrote:
I think not much has changed since SWA pushed out the 737-7, before the crashes. Not sure who the stalking horse here, the popular A220-300 or no customer 737-7.

Southwest came to the same conclusion that Spirit did when looking between the popular A220-300 or no customer A319neo- at this point in time single family commonality overrides A223 efficiency benefit.


Those are completely different business models, with distinct network and fleet strategies.

Spirit is a P2P carrier focused on leisure travellers, so it is basically a CASM-driven only airline, operating large efficient narrowbodies and just a few A319s for a few missions where the A320s and A321s have limitations. There is no much room for a large small narrowbody fleet, and getting few A220-300s would not make any sense.

On the other hand, Southwest carriers year over year more business travellers and connecting passengers, even though they continue to be a P2P carrier at most. To better serve business travellers and make connections available, they need a sufficient amount of daily frequencies on each route rather than the lowest CASM. So, the core of its fleet is a small narrowbody.

And, with the scale of WN's operations, the numbers nowadays might play in the direction of type efficiency instead of commonality, even though historically this was one of the main pillars of its successful business model. So, a mix MAX-8 and A220s in the long term not necessarily is a non sense solution for Southwest, as it would be for Spirit.
 
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Revelation
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Re: Southwest maybe considering an Airbus order

Sat Nov 21, 2020 2:35 pm

Polot wrote:
Southwest came to the same conclusion that Spirit did when looking between the popular A220-300 or no customer A319neo- at this point in time single family commonality overrides A223 efficiency benefit.

Indeed. Not to mention single family commonality, the A220-300 is so popular yet its diversified production lines and supply chain don't move at the same rate or scale as do the ones for A320 or B737, pretty much guaranteeing A220 keeps its niche status till this changes. Add to this WN's relatively strong balance sheet and Boeing's willingness to sell 737s with very little profit just to get the production line rebooted and it's a win-win for both sides.
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keesje
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Re: Southwest maybe considering an Airbus order

Sat Nov 21, 2020 3:42 pm

Except the 737-7 is a less comfortable, more fuel using, more noisy aircraft that everybody turned their back on, that would have to compete with the more efficient aircraft of the compititors for the next 25 years.

https://www.google.com/amp/s/www.aeroti ... ax%3fv=amp

I think there is a lot of hope behind commonality deciding all. If you read Kelly's comments closely, you see weasel wording.
"Never mistake motion for action." Ernest Hemingway
 
Tack
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Re: Southwest maybe considering an Airbus order

Sat Nov 21, 2020 4:45 pm

Revelation wrote:
Meanwhile, in Texas:

@SouthwestAir is focused on a deal to take more 737-7 and is ``not actively engaged in looking at the A220,'' CEO Gary Kelly reiterated today.

Ref: https://twitter.com/juliejohnsson/statu ... 1958282241


Honestly, I never thought the A220 had a shot at WN. Their whole business model is based on one fleet type. It’s one of the major factors in them consistently posting great financials. Further, because they’ve stayed on point with their business model of one fleet type, the’ve been able to pay employees some of the highest, if not the highest wages in the industry. That alone has bought a loyalty that has given them a competitive edge other carriers can only dream about. At some point they’ll need to transition away from the 737 to another one aircraft fleet type. But my money is this isn’t the time and A220 ain’t the jet.
 
bigb
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Re: Southwest maybe considering an Airbus order

Sat Nov 21, 2020 5:01 pm

keesje wrote:
Except the 737-7 is a less comfortable, more fuel using, more noisy aircraft that everybody turned their back on, that would have to compete with the more efficient aircraft of the compititors for the next 25 years.

https://www.google.com/amp/s/www.aeroti ... ax%3fv=amp

I think there is a lot of hope behind commonality deciding all. If you read Kelly's comments closely, you see weasel wording.


Except airlines dint make decisions based comfort these days but more so on the acquisition cost, operating costs, and operational fit (what kind of flexibility will the aircraft offer the air carrier, is the aircraft capable to operate the missions we need it for.)

So I suggest leaving getting off of your cabin comfort/cabin width soap box.

I don’t see the A220 entering into the picture at southwest until the lifecycle of the maxes are up.
 
NWADTWE16
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Re: Southwest maybe considering an Airbus order

Sat Nov 21, 2020 5:12 pm

Its only fitting that the airline which pressured Boeing to rush a failed aircraft out and market it as the new shiny best thing, should then be stuck in a death grip with the manufacturer. Sadly with an accepted accident rate of 8 frames per decade or whatever insane amount it is, we will all be looking back at these words and remembering when WN specifically increased their risk and therefor put their passengers in that same risk. WN i feel is a decaying brand stuck in its now elderly ways. Imagine a Max tragedy on top of where they are now? Toast!
I haven't been everywhere, but it's on my list!
 
Jetport
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Re: Southwest maybe considering an Airbus order

Sat Nov 21, 2020 7:06 pm

keesje wrote:
Except the 737-7 is a less comfortable, more fuel using, more noisy aircraft that everybody turned their back on, that would have to compete with the more efficient aircraft of the compititors for the next 25 years.

https://www.google.com/amp/s/www.aeroti ... ax%3fv=amp

I think there is a lot of hope behind commonality deciding all. If you read Kelly's comments closely, you see weasel wording.


Airbus cannot afford to sell any more A220's at Delta/launch pricing. Between the lower acquisition price and commonality cost savings the 737-7 is a no brainer for Southwest over the A220. Airbus needs to figure out how to get pricing up (not sure that is possible with the A319NEO and 737-7 out there) and/or costs down significantly and quickly. The A220 is a great aircraft, but it may just be too expensive to succeed. Even Boeing would have trouble cutting costs enough to make the A220 program successful, I am not sure a company like Airbus with a less cost focused culture can save the A220.

Also, we fully understand how much you hate the MAX and Boeing, but do you really have to restate it in every post?
 
Vicenza
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Re: Southwest maybe considering an Airbus order

Sat Nov 21, 2020 9:25 pm

Jetport wrote:
Even Boeing would have trouble cutting costs enough to make the A220 program successful, I am not sure a company like Airbus with a less cost focused culture can save the A220.


Well, they didn't seem to have any trouble, or qualms, about cost cutting on the Max.
 
Sooner787
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Re: Southwest maybe considering an Airbus order

Sun Nov 22, 2020 12:35 am

Polot wrote:
keesje wrote:
I think not much has changed since SWA pushed out the 737-7, before the crashes. Not sure who the stalking horse here, the popular A220-300 or no customer 737-7.

Southwest came to the same conclusion that Spirit did when looking between the popular A220-300 or no customer A319neo- at this point in time single family commonality overrides A223 efficiency benefit.


I'm thinking Southwest's flirtations with Airbus re: the A220 got Boeing's attention and they'll get a deal too good to refuse
on more Max 7's and some white tail -8's.
 
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Revelation
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Re: Southwest maybe considering an Airbus order

Sun Nov 22, 2020 4:20 am

bigb wrote:
Except airlines dint make decisions based comfort these days but more so on the acquisition cost, operating costs, and operational fit (what kind of flexibility will the aircraft offer the air carrier, is the aircraft capable to operate the missions we need it for.)

So I suggest leaving getting off of your cabin comfort/cabin width soap box.

I don’t see the A220 entering into the picture at southwest until the lifecycle of the maxes are up.

Indeed. WN just installed 9 MAX simulators and are going to put all 5,000+ of their pilots through the new training program for MAX, and take till Q1 or Q2 of next year to do it, before they put MAX back on the schedule.

You may ask "why not just get 50 or so pilots trained then put a few MAXes on a given city pair and add more as more pilots and planes are ready?". Well, that's not how WN works. They don't segregate airplanes to individual city pairs, they have only one pilot pool, and every pilot needs to fly every plane. When they got MAX, FAA said they could not keep flying the Classics in the same pool as MAX so they got rid of Classics.

This is not an airline that is going to add a plane with a different airman type rating any time soon.

And LOL at people comparing list prices. Next thing they will suggest is that the door is still open for A220 at WN right after WN's CEO says they are not actively engaged with Airbus and are focused on the 737-7 and plan to make a deal in the next six months.
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Re: Southwest maybe considering an Airbus order

Sun Nov 22, 2020 4:21 am

I believe the window for the A220 has closed. I believe there was a chance they could have bought it, but that the MAX situation seems to be resolved to their satisfaction.

IMHO they just aren't set up software wise for a 2nd type. By that, they can handle different generations of aircraft, but not where they must assign by type. They could have transitioned, but now seem to be avoiding the complication.

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Asiaflyer
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Re: Southwest maybe considering an Airbus order

Sun Nov 22, 2020 5:29 am

lightsaber wrote:
I believe the window for the A220 has closed. I believe there was a chance they could have bought it, but that the MAX situation seems to be resolved to their satisfaction.

IMHO they just aren't set up software wise for a 2nd type. By that, they can handle different generations of aircraft, but not where they must assign by type. They could have transitioned, but now seem to be avoiding the complication.

Lightsaber

Hmmmm? Sounds like WN Might be in big trouble the day Boeing is replacing 737 with a new NB? :o ;)
 
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KLMatSJC
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Re: Southwest maybe considering an Airbus order

Sun Nov 22, 2020 10:38 am

Asiaflyer wrote:
lightsaber wrote:
I believe the window for the A220 has closed. I believe there was a chance they could have bought it, but that the MAX situation seems to be resolved to their satisfaction.

IMHO they just aren't set up software wise for a 2nd type. By that, they can handle different generations of aircraft, but not where they must assign by type. They could have transitioned, but now seem to be avoiding the complication.

Lightsaber

Hmmmm? Sounds like WN Might be in big trouble the day Boeing is replacing 737 with a new NB? :o ;)

I personally wouldn't be shocked to see the next iteration of Boeing NB to have cockpit commonality with the MAX. But again, that's fairly far down the road.
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keesje
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Re: Southwest maybe considering an Airbus order

Sun Nov 22, 2020 12:49 pm

KLMatSJC wrote:
Asiaflyer wrote:
lightsaber wrote:
I believe the window for the A220 has closed. I believe there was a chance they could have bought it, but that the MAX situation seems to be resolved to their satisfaction.

IMHO they just aren't set up software wise for a 2nd type. By that, they can handle different generations of aircraft, but not where they must assign by type. They could have transitioned, but now seem to be avoiding the complication.

Lightsaber

Hmmmm? Sounds like WN Might be in big trouble the day Boeing is replacing 737 with a new NB? :o ;)

I personally wouldn't be shocked to see the next iteration of Boeing NB to have cockpit commonality with the MAX. But again, that's fairly far down the road.


The moment Boeing announces a 737 replacement, a gradual 2 type transition period to a new aircraft is the way forward. A 180 on the virtues of commonality for SWA will happen at the speed of light. :yes:
"Never mistake motion for action." Ernest Hemingway
 
saab2000
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Re: Southwest maybe considering an Airbus order

Sun Nov 22, 2020 1:21 pm

keesje wrote:
KLMatSJC wrote:
Asiaflyer wrote:
Hmmmm? Sounds like WN Might be in big trouble the day Boeing is replacing 737 with a new NB? :o ;)

I personally wouldn't be shocked to see the next iteration of Boeing NB to have cockpit commonality with the MAX. But again, that's fairly far down the road.


The moment Boeing announces a 737 replacement, a gradual 2 type transition period to a new aircraft is the way forward. A 180 on the virtues of commonality for SWA will happen at the speed of light. :yes:


I certainly hope they can move beyond the floor plan/ergonomics of a 707 for their next aircraft. It'd be nice to have a place to eat a sandwich and not hit my knee when climbing into the seat or hit my head on the dozens of switches on the overhead panel.

The 737 flight deck is an ergonomic disaster so I hope they move to something a bit more crew-friendly.

Yes, I operate the 737, including the MAX, though that one has obviously been a while.
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Revelation
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Re: Southwest maybe considering an Airbus order

Sun Nov 22, 2020 2:02 pm

keesje wrote:
The moment Boeing announces a 737 replacement, a gradual 2 type transition period to a new aircraft is the way forward. A 180 on the virtues of commonality for SWA will happen at the speed of light. :yes:

I don't have any difficulty with the idea that WN will maintain commonality for as long as they can, and as the need for that kind of transition emerges WN will work with vendors to see whose equipment will accommodate its future needs the best. Given WN likes to operate its equipment for 20 years or more, the time frame will be such that it will give all vendors a chance to position their portfolio to meet WN's future needs once this generation of equipment has run its course. Commonality is virtuous, WN will keep it as long as it can.
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keesje
Posts: 14118
Joined: Thu Apr 12, 2001 2:08 am

Re: Southwest maybe considering an Airbus order

Sun Nov 22, 2020 4:38 pm

Kelly said in an interview a few days ago, at this point he looks at the -7. That's it.

“So we are not actively engaged in looking at the A220 at this point,” he said. “That’s not to say we won’t be. Right now, we’re simply focused on our discussions with Boeing and the Max 7.”


Responses here make it seem like this a decision.

Hard to read this as anything other than WN making a large order for MAX-7 in the next six months and A220 being left on the outside looking in,

I believe the window for the A220 has closed.

I'm thinking Southwest's flirtations with Airbus re: the A220 got Boeing's attention and they'll get a deal too good to refuse on more Max 7's and some white tail -8's.

Airbus cannot afford to sell any more A220's at Delta/launch pricing.

I don’t see the A220 entering into the picture at southwest until the lifecycle of the maxes are up.

Add to this WN's relatively strong balance sheet and Boeing's willingness to sell 737s with very little profit just to get the production line rebooted and it's a win-win for both sides.


Remarkable, far reaching conclusions. Maybe Kelly has a A220 proposal in his pocket and is now in discussion with Boeing. Like AA was discussing with Boeing (Airbus LOI is their pocket) which kicked off the 737MAX. Since then AA, DL, US ordered NEO's. Moxy & Jetblue A220's with other campaigns on going (though paused) . Southwest & Boeing don't live in isolation, protected from market realities. E.g. maybe Boeing also needs to make a profit on a 737-7 deal, to cover MAX grounding costs. They are in the situation they are in.
"Never mistake motion for action." Ernest Hemingway
 
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Polot
Posts: 11076
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Re: Southwest maybe considering an Airbus order

Sun Nov 22, 2020 4:40 pm

I’m not sure why you are suddenly so baffled that pricing on the -7 may be better, knowing the MAX situation for the past 20 months, knowing Airbus’s comments about how the A220 program is currently unprofitable and they are working to lower cost to build as best they can, and especially since according to you the A223 is “popular”.
 
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keesje
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Re: Southwest maybe considering an Airbus order

Sun Nov 22, 2020 5:10 pm

Polot wrote:
I’m not sure why you are suddenly so baffled that pricing on the -7 may be better, knowing the MAX situation for the past 20 months, knowing Airbus’s comments about how the A220 program is currently unprofitable and they are working to lower cost to build as best they can, and especially since according to you the A223 is “popular”.


Of course Airbus needs a profit on the aircraft they sell, to pay off all investment done on the A220. But is is not that somehow Boeing is exempted from this market mechanism. The >$20B losses on the program from the 737MAX crashes and grounding have to be recovered from future sales, such as with Southwest Airlines. No place for XMas presents / discounts at this stage. Contrary, they might ask Santa for a loan. https://edition.cnn.com/2020/11/17/busi ... index.html
"Never mistake motion for action." Ernest Hemingway
 
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Polot
Posts: 11076
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Re: Southwest maybe considering an Airbus order

Sun Nov 22, 2020 5:21 pm

keesje wrote:
Polot wrote:
I’m not sure why you are suddenly so baffled that pricing on the -7 may be better, knowing the MAX situation for the past 20 months, knowing Airbus’s comments about how the A220 program is currently unprofitable and they are working to lower cost to build as best they can, and especially since according to you the A223 is “popular”.


Of course Airbus needs a profit on the aircraft they sell, to pay off all investment done on the A220. But is is not that somehow Boeing is exempted from this market mechanism. The >$20B losses on the program from the 737MAX crashes and grounding have to be recovered from future sales, such as with Southwest Airlines. No place for XMas presents / discounts at this stage. Contrary, they might ask Santa for a loan. https://edition.cnn.com/2020/11/17/busi ... index.html

Those are all sunk costs. Boeing already spent that money, they can’t unring that bell. Whether Boeing (and Airbus with the A220) make money now is dependent on cost to build vs selling price. Obviously Boeing would love higher margins to recuperate as much or their investment as possible faster, but that doesn’t mean they can’t give great discounts to strategically important airlines to both help demonstrate customer confidence in the model and to get some money rolling in. Deeply discounting and getting some money is a lot better than holding firm because “we just spent $20 billion” and getting no order and thus no money.
 
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keesje
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Re: Southwest maybe considering an Airbus order

Sun Nov 22, 2020 5:42 pm

Polot wrote:
keesje wrote:
Polot wrote:
I’m not sure why you are suddenly so baffled that pricing on the -7 may be better, knowing the MAX situation for the past 20 months, knowing Airbus’s comments about how the A220 program is currently unprofitable and they are working to lower cost to build as best they can, and especially since according to you the A223 is “popular”.


Of course Airbus needs a profit on the aircraft they sell, to pay off all investment done on the A220. But is is not that somehow Boeing is exempted from this market mechanism. The >$20B losses on the program from the 737MAX crashes and grounding have to be recovered from future sales, such as with Southwest Airlines. No place for XMas presents / discounts at this stage. Contrary, they might ask Santa for a loan. https://edition.cnn.com/2020/11/17/busi ... index.html

Those are all sunk costs. Boeing already spent that money, they can’t unring that bell. Whether Boeing (and Airbus with the A220) make money now is dependent on cost to build vs selling price. Obviously Boeing would love higher margins to recuperate as much or their investment as possible faster, but that doesn’t mean they can’t give great discounts to strategically important airlines to both help demonstrate customer confidence in the model and to get some money rolling in. Deeply discounting and getting some money is a lot better than holding firm because “we just spent $20 billion” and getting no order and thus no money.


Ah, you believe there is a second reality, they are exempted, all is sunk cost. Well that's not the case, although I can't blame anyone for getting lost in the financial engineering, smoke screens, free cash flow parties & unique accountancy rules. Boeing had $60B in debt last july & it didn't get better. The current valuation of their assets is a topic itself.. https://www.benzinga.com/news/20/08/171 ... eings-debt Reality is kicking in for Airbus, but also for Boeing. I expect government support in some form(s) might be required to bridge the current situation.
"Never mistake motion for action." Ernest Hemingway
 
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Polot
Posts: 11076
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Re: Southwest maybe considering an Airbus order

Sun Nov 22, 2020 5:54 pm

keesje wrote:
Polot wrote:
keesje wrote:

Of course Airbus needs a profit on the aircraft they sell, to pay off all investment done on the A220. But is is not that somehow Boeing is exempted from this market mechanism. The >$20B losses on the program from the 737MAX crashes and grounding have to be recovered from future sales, such as with Southwest Airlines. No place for XMas presents / discounts at this stage. Contrary, they might ask Santa for a loan. https://edition.cnn.com/2020/11/17/busi ... index.html

Those are all sunk costs. Boeing already spent that money, they can’t unring that bell. Whether Boeing (and Airbus with the A220) make money now is dependent on cost to build vs selling price. Obviously Boeing would love higher margins to recuperate as much or their investment as possible faster, but that doesn’t mean they can’t give great discounts to strategically important airlines to both help demonstrate customer confidence in the model and to get some money rolling in. Deeply discounting and getting some money is a lot better than holding firm because “we just spent $20 billion” and getting no order and thus no money.


Ah, you believe there is a second reality, they are exempted, all is sunk cost. Well that's not the case, although I can't blame anyone for getting lost in the financial engineering, smoke screens, free cash flow parties & unique accountancy rules. Boeing had $60B in debt last july & it didn't get better. The current valuation of their assets is a topic itself.. https://www.benzinga.com/news/20/08/171 ... eings-debt Reality is kicking in for Airbus, but also for Boeing. I expect government support in some form(s) might be required to bridge the current situation.

Nothing you are talking about has any dependence on a WN (or anyone’s) order. Discounting for WN only makes Boeing’s financial situation worse if they price it below the cost to build the plane. You don’t seem to be grasping this- I’m not sure you fully understand what a “sunk cost” is.
 
JonesNL
Posts: 228
Joined: Tue Aug 06, 2019 2:40 pm

Re: Southwest maybe considering an Airbus order

Mon Nov 23, 2020 7:13 am

Revelation wrote:
bigb wrote:
Except airlines dint make decisions based comfort these days but more so on the acquisition cost, operating costs, and operational fit (what kind of flexibility will the aircraft offer the air carrier, is the aircraft capable to operate the missions we need it for.)

So I suggest leaving getting off of your cabin comfort/cabin width soap box.

I don’t see the A220 entering into the picture at southwest until the lifecycle of the maxes are up.

Indeed. WN just installed 9 MAX simulators and are going to put all 5,000+ of their pilots through the new training program for MAX, and take till Q1 or Q2 of next year to do it, before they put MAX back on the schedule.

You may ask "why not just get 50 or so pilots trained then put a few MAXes on a given city pair and add more as more pilots and planes are ready?". Well, that's not how WN works. They don't segregate airplanes to individual city pairs, they have only one pilot pool, and every pilot needs to fly every plane. When they got MAX, FAA said they could not keep flying the Classics in the same pool as MAX so they got rid of Classics.

This is not an airline that is going to add a plane with a different airman type rating any time soon.

And LOL at people comparing list prices. Next thing they will suggest is that the door is still open for A220 at WN right after WN's CEO says they are not actively engaged with Airbus and are focused on the 737-7 and plan to make a deal in the next six months.


Man, I didn't realize WN was so strict about pilot pooling. Seeing this makes it really clear that the choice is driven by organizational fit rather than bird quality. WN needed to change their entire culture, organizational structure and IT systems to incorporate the A22x in current production state. If they could replace the entire fleet within a year it would be much cheaper, but at the current production pace this is not viable.

From an MBA cost perspective; Adding the A22x would require to pivot their business model. Case studies show that can be an rather costly and risky enterprise. VW is doing it right now and is investing €30bil. just in electrification of the fleet. Bombardier tried it and utterly failed. Minimum cost for WN with perfect execution would be north of $2bil. (10% of revenue 2019) excluding the purchase of the bird. Not sure how the calculations pan out, but the A22x has to be a whole lot of better to recoup the reorganization costs...
 
VS11
Posts: 1690
Joined: Mon Jul 02, 2001 6:34 am

Re: Southwest maybe considering an Airbus order

Mon Nov 23, 2020 8:14 am

Frankly, I don't see what the A220 would solve for Southwest. Even if pre-COVID19, it was to open new smaller markets, I don't think this is relevant today or in the next 5 years. They are currently trying to find new markets for their existing fleet so a new fleet and a new type would bring in just more challenges to deal with - financially and operationally.
 
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Revelation
Posts: 25020
Joined: Wed Feb 09, 2005 9:37 pm

Re: Southwest maybe considering an Airbus order

Mon Nov 23, 2020 9:25 am

VS11 wrote:
Frankly, I don't see what the A220 would solve for Southwest. Even if pre-COVID19, it was to open new smaller markets, I don't think this is relevant today or in the next 5 years. They are currently trying to find new markets for their existing fleet so a new fleet and a new type would bring in just more challenges to deal with - financially and operationally.

Yes, this dovetails with:

But the pressures from the pandemic “changed our priorities quite a bit,” and the company for now is focused on the Max 7 to complement its order for the larger -8, Kelly said.

It's pretty clear they feel it'd be more difficult to move to a mixed fleet in the midst of a crisis or its aftermath. In the current and projected environment commonality is more important rather than less since it'd be even harder to match pilots and equipment during a time of reduced fleet operations.
Wake up to find out that you are the eyes of the world
The heart has its beaches, its homeland and thoughts of its own
Wake now, discover that you are the song that the morning brings
The heart has its seasons, its evenings and songs of its own
 
Jomar777
Posts: 578
Joined: Tue Oct 20, 2015 8:45 am

Re: Southwest maybe considering an Airbus order

Mon Nov 23, 2020 9:45 am

1) The A220 is way too expensive. Deals like DL, Jet Blue and Air France do not come that often. At present the project is not even profitable;
2) For all savings on CASM, the collateral costs on operating two frames for a period, pilots negotiation, availability of other frames cheaper, would eat away any profit;
2.a) Look at Easyjet for example - when they move to Airbus, they ended up having to switch the whole fleet to make it work. It did for them but would not have worked if they decided to operate both on a long term. So it is not a question to operate both A220 and B737 - in medium to long term is always one or another;
3) No production slots available. Airbus is still not in position to shift enough A220s to warrant a bigger order book

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