Southwest Airlines is one of the most iconic US airlines. The low-cost carrier has become one of the world’s largest airlines and budget carriers.
Over the years, it has gained a loyal following thanks to its unique approach: for even its most basic fares, Southwest offers passengers two free checked bags, no change or cancel fees, and non-expiring flight credit.
Beyond its unique value proposition, the carrier is famous for exclusively operating the Boeing 737.
As the airline navigates uncertain times, it has reinvested in the aircraft family with extensive investment in and deployment of the 737 MAX.
But why is Southwest so eager to discard its older 737 NGs?
Southwest was incorporated as Air Southwest Co. in Texas in 1967. However, due to prolonged legal challenges over its validity from incumbent carriers, it did not operate its first revenue flight until June 18, 1971.
Though its first flight was operated by a 737-200, the original plan did not include utilizing Boeing’s most popular aircraft.
According to Avgeekery, Southwest's founders aimed to bring significantly lower fares to the Texas market, which meant finding ways to keep costs low.
Thus, co-founder Rollin King wanted to purchase used Lockheed L-188 turboprop aircraft from American Airlines, which had a low acquisition cost.
However, due to the 1970s recession, airlines across the industry faced declining profits, and some canceled aircraft orders previously made.
Luckily for Southwest, Aloha, Pacific Southwest, and Air California canceled some of their orders for the 737, forcing the manufacturer to put them up for sale at a discounted price. Suddenly, Southwest had a fleet of three brand-new jets.
From there, Southwest became a loyal 737 customer. Throughout its existence, it has operated six 737 models and was the launch customer for three of them.
Aside from a few brief periods in the 1980s when the carrier leased 727s, Southwest has stuck to its single-fleet strategy.
Moving forward, it looks to remain loyal to the aircraft family with its heavy investment in the latest iteration of the aircraft, the 737 MAX.
Southwest currently relies heavily on the 737 NG series, which preceded the 737 MAX series. The airline's 737-700 and -800 models continue to play a vital role in daily operations.
According to Planespotters.net, its most popular model is the 737-700. The carrier operates 354 in total, 15 of which are currently parked.
Southwest was the launch customer for the 737-700, which first flew with the airline in 1997. However, in 2012, Southwest introduced the 737-800 into its fleet.
Seating 175 passengers, this new model was the largest aircraft ever operated by the carrier. Southwest currently has 205 of the model, 192 of which are active.
Southwest's decision to purchase 737 NG models was clearly a good one. The carrier continued its impressive 47-year profitability streak through the 2000s, when many major airlines filed for bankruptcy, and made money through the 2010s until the C.O.V.I.D.-.1.9 pandemic.
However, looking to the future, Southwest needed more efficient aircraft in its fleet. It became the launch customer for the 737 MAX program in 2011, when it ordered 150 examples of the 737 MAX 8.
While the 737 MAX 8 has been at the center of many safety incidents and is a heavily scrutinized plane, the program has paid off for Southwest.
The MAX allows Southwest to take advantage of fleet commonality to save on operating and maintenance costs while enhancing fuel efficiency and the customer experience.
Today, Southwest operates 243 737 MAX 8s, only three of which are not currently deployed in operations. The airline has another 218 MAX 8 ordered to replace its aging 737-800s.
And though the certification of the smaller 737 MAX 7 is significantly delayed, the airline has 289 firm orders for it and another 187 options between the MAX 7 and 8.
The carrier reportedly hopes to become an all-MAX operator by the next decade.
Part of the reason Southwest is eager to part with its older 737 aircraft is its recent financial struggles. After the pandemic, the aviation industry has faced many challenges.
One of the most significant ones for Southwest is rising costs. For a budget carrier, this issue is a substantial and existential threat.
This challenge, combined with spiked demand for premium products (which Southwest does not currently offer) has seen Southwest lose some of its advantages in recent years.
Though squeezing a narrow Quarter 3 profit, the airline is considering selling some of its older 737s for extra cash flow, according to FlightGlobal.
Selling its older aircraft not only helps cash flow immediately but also helps to “right size” Southwest’s existing schedule as it trims its network and deploys capacity where it is more profitable.
The 737 MAX is also more efficient than its 737 NGs, making it an appealing decision.
Beyond the fact that the 737 NGs are aging, Southwest’s decision to become an all-MAX operator comes with many benefits. Perhaps most obviously, the 737 MAX is a more efficient aircraft.
This lowers Southwest’s fuel costs per trip, allowing it to pass these savings to its customers and preserve its low-cost model.
The newest iteration of the 737 family also comes with an enhanced range. While the 737-800 has a range of 2,935 nautical miles, its younger sibling offers a maximum range of 3,500 nautical miles.
Though Southwest’s network consists of many short routes, this new range could open more possibilities in routes to Hawaii.
Though the introduction of the 737 MAX has been fraught with challenges, Southwest seems confident that it is a worthy replacement for its aging fleet.
