Monday, August 16, 2010

Southwest Airlines Weighs Adding Bigger 737s to Fleet, With Implications for New York Service

Southwest Airlines is considering buying Boeing 737-800 model airplanes, which would give the airline the capability of flying more passengers per-plane out of congested airports like New York LaGuardia.

Friday, on its company blog, Nuts About Southwest, Southwest's chief operating officer, Mike VanDeVen, wrote that "Southwest has been evaluating the opportunity to introduce the Boeing 737-800 into our fleet as part of our domestic network, but we have not yet finalized our decision."

Southwest always plays its strategy close to the vest, but if it were to add 737-800s to the fleet that would certainly signal a greater interest in markets like New York City, where Southwest has been only a small player at LaGuardia (where it only began service in late June 2009), and not a player at all at Kennedy or Newark.

For eons, Southwest's brilliant success has been partly attributed to its simple business plan, built around a fleet entirely of 737s flying to and from domestic airports where origin and destination traffic is robust, and where quick aircraft turnaround is possible. Southwest says its current fleet of 541 Boeing 737s each average about 6.5 flights a day, with an average trip length of 633 miles.

VanDeVen addressed that as regards the bigger 737-800s. "While the aircraft introduces additional complexities to our operation, we believe our existing network could be enhanced by converting some of our future 737-700 deliveries to 737-800s. Introducing the -800, which has more seating capacity than the -700, would be a complementary fit to our current fleet by supplementing opportunities for longer-haul flying, while also potentially improving our unit costs. The -800 can also give Southwest scheduling flexibility by allowing for additional capacity in high-demand, slot-controlled, or gate-restricted markets—in other words, we can carry more passengers to some of our most popular destinations."

By the way, "gate-restricted markets" is a real good way to describe New York airports.

If it were to buy Boeing 737-800s, Southwest would likely drop existing orders for Boeing 737-700s. It would also need approval from its pilots and flight attendants unions for the bigger planes.

Of the 541 Boeing 737s now in operation on Southwest, 343 are -700s (137 seats each), 25 are -500s (122 seats) and 173 are -300s (137 seats).

The -800s are basically a stretched version of the -700s, but the extra capacity pushes the plane up into the markets typically served by MD-80s, which most competitors are phasing out.

Southwest would likely configure the -800s in a single class with about 175 seats.

VanDeVen said, "Since the decision to add the -800 has not been finalized, any details regarding configuration, timing, and quantity of deliveries are still to be determined. Given the long Boeing lead time from order to delivery, Southwest would need to make a final decision by December 1 to begin accepting deliveries by early 2012."


No comments: