During Southwest’s third-quarter call earnings Thursday, Chief Operating Officer Mike Van de Ven said the carrier will decide in the next year or so on whether to buy more Boeing 737 Max-7 jets, the smallest in the family, or opt for Airbus (EADSY) A220s. Deliveries would start in 2025.
Southwest has been hinting about buying a new plane to augment its 737 fleet for several years. But the decimation of air travel by the coronavirus pandemic has changed its decision-making process.
“If there were ever a scenario for us to consider making a change in aircraft, it would be now, because we’re not desperate to grow the airline, and may not be for a long time,” Southwest CEO Gary Kelly said Thursday.
Meanwhile, the Boeing 737 Max has been grounded following a second deadly crash in March 2019. But the troubled jet could return to service by the end of the year, pending final Federal Aviation Administration approval.
Shares fell 0.7% to 167.84 on the stock market today. Boeing stock is holding above the 50-day line after breaking longtime resistance there earlier this week, according to MarketSmith chart analysis. Southwest shares edged up 0.3%. Airbus’ U.S.-listed shares jumped 3.4%.
Southwest’s willingness to explore an Airbus jet comes as Boeing renews a pitch for a clean-sheet design aircraft.
Boeing had been shopping around the idea of a new twin-aisle jet, the New Midsize Airplane, but scrapped the idea during Covid-19 and the 737 Max grounding.
Now the aerospace giant is looking at a single-aisle jet that could carry between 200 and 250 passengers, sources told the Wall Street Journal. That places it between the 737 Max-10 and the 787 Dreamliner.
The sources said that talks with customers including airplane leasing companies were in the very early stages. If Boeing does launch a new clean-sheet design plane, it would be its first since the Dreamliner in 2004.
Boeing and Airbus have scaled back production as the coronavirus pandemic continues to depress air travel.
But European aerospace giant Airbus could boost production of its A320 single-aisle aircraft from 40 to 47 per month in the second half of 2021 after slashing it from 60 a month when the pandemic hit, sources told the Financial Times.
Airbus hasn’t yet announced any concrete plans but says it has looked into a rate change.
“We have done a re-evaluation of the situation after the summer period,” Airbus said. “We have refined the plan for the A320 Family programs based on our current view of the market.”
Follow Gillian Rich on Twitter @IBD_GRich for aviation news and more.
YOU MAY ALSO LIKE:
The post All-Boeing Airline Southwest Opens Door To Rival Airbus appeared first on Investor’s Business Daily.