Southwest CEO focused on ungrounding the Max

Southwest Airlines, headquartered in Dallas, Texas, has 745 aircraft — all of them Boeing 737s, which has been the proven platform central to Southwest’s evolution as the world’s largest low-cost carrier.

Southwest Airlines is the largest customer for Boeing’s 737 Max. Boeing Image
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Of those, 504 are 143-seat 737-700s which were scheduled for retirement starting last year, but that has been delayed due to Boeing’s ongoing issues with the 737 Max. Of the rest, 207 are 175-seat 737-800s – a total of 711 aircraft.

The remaining 34 are Max 8s, part of an order for hundreds more to replace the 737-700s. Southwest Airlines is the largest customer for Boeing’s 737 Max. However, those next-generation 175-seaters also remain grounded as the OEM and its global customers await the return to service of the Max, which was grounded worldwide after catastrophic crashes in October 2018 and March 2019.

Like other operators affected by the Max losses, Southwest has had to juggle its fleet and schedules to maintain market share and keep more than 60,000 employees on the job domestically and internationally.

Its chairman and chief executive officer, Gary Kelly, was openly frustrated in a recent interview with CNBC, the U.S. business news television network owned by the NBCUniversal News Group.

Acknowledging that he feels that there has been progress in recent months on getting the aircraft back into service, it clearly hadn’t been enough. “We need to get this thing done and get the Max back up in the air.”

Asked how prospective passengers can be reassured about the work being done by Boeing and the U.S. Federal Aviation Administration and foreign regulators on the Max, Kelly replied that there’s a fundamental need for it to be seen as safe and ensure that pilots are adequately trained. It also is critical for operators, Boeing and regulators to communicate with the public.

“We’ll rely heavily on our pilots as a part of that communication campaign, but we need to get the airplane back in the air. We need to convince people by its performance that they can be confident in it. We are not going to operate the airplane unless we are confident. We’ve established a lot of trust with our customers . . . and we’re certainly not going to squander that.”

The key for Southwest, he reiterated, is its flight crews. “We hire very experienced pilots; on average they have 6,000 hours of experience before we even hire them. . . . We’re the gold standard when it comes to hiring our flight crews, our training, our procedures, all of that. So, I’m very confident in that – as are our pilots.”

Boeing has suggested that pilots returning to the Max should have some time in a full-flight simulator, but Kelly said his pilots dispute that. “Is additional training harmful? Absolutely not, but it needs to be fact- and data-driven in terms of setting those requirements and not just doing things that make us all feel good . . . We have almost 80,000 hours of flight experience in it . . . and we’re just looking forward, again, to getting it ungrounded.”

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Kelly has had discussions with long-time friend David Calhoun, the former Boeing chairman who replaced Dennis Muilenburg as president and CEO Jan. 13, but he declined to go into detail, saying only that he believes in Calhoun and Boeing.

When the notion of buying from another manufacturer was broached, he said that while Southwest had a “duty” to consider it, “now is not the time to be focused on exploring that question.” Rather, the focus was on running his company, taking care of its customers and getting the Max back in service.

However, he continued, “At the right time I want to take a good look” at other options, adding that it would be “a real challenge” for any other manufacturer. “They’re going to have to come with . . . a product that meets our needs and the price has to be right.” There also was the fact that mixed fleets mean higher operating costs. “We cherish our low fare brand and, so, all of that has to fit and it just remains to be seen whether that problem can be solved . . . We have wonderful opportunities to grow and we’re anxious to get at it.”

 

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