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June 15, 2024

Southwest Airlines Boeing 737 MAX-8 (Ashlee D. Smith/Southwest Airlines)

Southwest’s MAX Update
Care to share?

As we reported earlier, Southwest Airlines shuffled its MAX orders considering uncertain MAX 7 deliveries. Southwest reduced MAX 7 orders by 26 and added 81 MAX 8s. Southwest’s update warrants some digging.

The MAX 7s are aimed at replacing aging 737-700s, of which Southwest is the largest operator.  Its last new-build delivery for this model was in 2011.  The airline has taken several more from the pre-owned market.  The 142-seat model is “right-sized” for many of the airline’s markets.  Southwest operates 428 737-700s, according to ch-Aviation’s fleet database, out of an active fleet of 699 aircraft.

Consequently, a decision to up gauge to the MAX 8 is no small thing.   What can we learn from flight ops data about the decision? Using US DoT data through September 2021 we developed some charts.

Starting with flight ops costs per seat hour, we see the following. At Southwest, the MAX 8 economics are better than the 700.  And you get a lot more seats, to boot. So, the MAX 8 was a good choice, possibly even as a MAX 7 replacement. 

If we consider Southwest’s ASM/Flight Ops per block minute, we see the following.  The MAX 8 has 13 percent better economics than the 700. The slightly higher costs for the MAX 8 to the 800 could be due to the ungrounding of the MAX 8 and the associated costs.  We expect MAX 8 economics to eclipse even the 800 in short order.

In terms of the sparklines, the red dot indicates the high over the period.  Even though Southwest does not operate the 717, which it inherited from AirTran, note the order of magnitude change in economics when compared to the MAX 8.  It is quite amazing how fuel burn and technology improved over 20 years.

If we consider that fuel accounts for ~33.5 percent of total air ops at Southwest, then anything to drive down fuel burn is an irresistible attraction.  Especially as fuel prices rise again.  The fastest way to reduce fuel burn is operating the latest engine technology and in the case of Southwest, that means MAX. If they can’t get a MAX 7 then the MAX 8 will do. And do well for them.

Also, consider that Southwest is evolving.  The switch to the 800 impacted quickly and we can see that the average number of seats per flight has risen steadily.  The MAX 8 is a low-risk selection for the airline.

In summary, the delay in MAX 7 deliveries should not have a big impact on Southwest.  The MAX 8 economics are attractive and competitive.  The bigger aircraft also offers about 13 percent more seats.

author avatar
Addison Schonland
Co-Founder AirInsight. My previous life includes stints at Shell South Africa, CIC Research, and PA Consulting. Got bitten by the aviation bug and ended up an Avgeek. Then the data bug got me, making me a curious Avgeek seeking data-driven logic. Also, I appreciate conversations with smart people from whom I learn so much. Summary: I am very fortunate to work with and converse with great people.

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