It was a consequential day in June 1976, when Southwest Airlines ordered four Boeing 737-200 Advanced aircraft new from Boeing. Its previous 737-200s were non-taken units that were originally ordered by other airlines, and ever since then, Southwest has only ordered Boeing 737s. The carrier has quickly become Boeing’s most important customer, as it has since ordered over 1,700 737s.

This equates to roughly 11% of all 737s ever ordered, and Southwest still has over 400 on order. Southwest has repeatedly discussed the idea of adding a second aircraft type, but this has mainly resulted in it receiving lower prices for the 737. The airline’s operations fundamentally center around operating one aircraft type, with one set of spare parts, one set of pilots, and one maintenance program.

At the same time, there’s also no real benefit to flying the Airbus A320, because it brings essentially the same performance and fuel burn as a 737. However, the most recent discussions have centered around the Airbus A220, an aircraft that is hardly the same as a 737 in these regards.

Southwest’s Fleet Decisions

Credit: Shutterstock

In general, the sweet spot of the narrowbody market has moved upwards. The base model Airbus A320-200 is a 150 to 180-seat aircraft, while the similarly-sized 737-800, a stretched and upgraded variant of the base 737-700, was far more successful than the 737-700. With the latest generation of aircraft, the 190 to 240-seat Airbus A321neo is the most successful out of all of them.

Meanwhile, Boeing’s successes are coming from the 737 MAX 8 and the 737 MAX 10. Neither the A319neo nor the 737 MAX 7 is selling well, despite their predecessors having sold over 1,000 units each. Southwest, however, currently operates 289 737-700s and 189 737-800s, and although it has ordered a total of 496 737 MAX 8s, the Dallas-based carrier also holds orders for 269 737 MAX 7s.

This makes it by far the largest customer for the 737 MAX 7. The carrier has a large place in its fleet for small planes, and this is a position where the A220 holds a strong advantage. The A319neo and 737 MAX 7 have gained weight due to their large engines, and this weight gain is a larger proportion of their overall weight compared to their larger siblings, hampering fuel efficiency.

What’s more, the Airbus A319 and Boeing 737-700 sold in large part due to range and capability, but even the most basic version of the A321neo can still fly 3,500 NM (6,480 km). Meanwhile, the A320neo and 737 MAX 8 have much improved performance.

They are the A319 and 737-700 of this generation, while the A319neo and 737 MAX 7 are too heavy, too capable, and too fuel-thirsty for what the market truly wants from an aircraft of this size. The Airbus A220, on the other hand, is a clean-sheet plane optimized for its size.

Why Southwest Has Yet To Buy The A220

Credit: Shutterstock

In the carrier’s third-quarter earnings call for 2020, Southwest executives acknowledged that it was as good a time as ever for the carrier to consider another aircraft type. At the time, the 737 MAX was still grounded, and the 737 MAX 7’s first delivery had been pushed back from its original 2019 target, while the carrier had hundreds of 737-700s that would soon be reaching the end of their economic lives.

The Airbus A220 was viewed as a natural fit, but to this day, Southwest has not bought a single A220. Airlines rarely switch their orders due to ongoing issues with their aircraft. In a situation such as what Southwest was facing at the time (and continues to face with ongoing 737 MAX 7 delays), Boeing typically issues credits as compensation.

From this perspective, Southwest is already incentivized to stick with Boeing and with CFM. What’s more, the delivery date of the 737 MAX 7 has continuously been unclear, and it’s hardly guaranteed that if Southwest switched to Airbus, it could get A220s sooner than its 737 MAX 7s.

In addition to the financial incentives, Southwest would not receive A220s at anywhere near the same pace as its 737s. This is because the A220 line is running with a far lower monthly production rate. Furthermore, it would need to order a huge number of A220s to justify adding another type.

The carrier wouldn’t be able to use all of these planes purely for expansion, meaning that an A220 order would come with a partial cancellation of its 737 order. This would come at a significant penalty to Southwest, and Airbus would not be willing to sell A220s at a low enough price to make the financials work for the carrier.

Why Southwest Doesn’t Want The A220

Credit: Shutterstock

The Airbus A220 burns less fuel than the Boeing 737 MAX 7 while having excellent range, which is why it’s become the most popular aircraft in its market segment. In addition, Boeing redesigned the 737 MAX 7 to be a direct shrink of the 737 MAX 8, able to carry more passengers than the 737-700 but retaining the 737 MAX 8’s heavy structure and therefore resulting in a higher fuel burn.

Crucially, however, the redesign was done at the request of Southwest Airlines, which has rewarded Boeing with 269 orders for the variant. It’s not uncommon to see airlines order narrowbodies from both manufacturers: KLM is a long-time 737 operator that now also flies the A321neo. However, most of these carriers already operate multiple aircraft types across the two manufacturers, including widebodies.

Except for a brief stint flying leased 727s, Southwest has only ever flown the 737, which means that the carrier is inexperienced with adding a completely new aircraft type. Adding another type would be harder and more expensive for Southwest, a large carrier that has essentially never done it before. What’s more, Southwest’s operations are centered around maximizing flexibility by having nearly 800 737s.

This allows it to streamline operations to an unrivaled degree. Having a second aircraft type would hamper operational flexibility, and the carrier has repeatedly decided that it isn’t worth it to integrate another narrowbody that it doesn’t need. This is especially true in the case of the A220, which competes against a plane that Southwest specifically requested.

The Issues With The Airbus A220

Credit: Shutterstock

Southwest Airlines would be a prime customer for the Airbus A220-300, as this aircraft is similar in size to the Boeing 737-700 and 737 MAX 7. Today, however, the biggest issue with the A220 is with its engines, as the plane’s Pratt & Whitney PW1500G have experienced severe durability issues that have shortened on-wing time. Because of supply chain constraints, Pratt & Whitney isn’t able to deliver new engines on time or make repairs quickly.

This has resulted in grounded A220s without engines and new A220s rolling off the assembly line without engines. Southwest Airlines tends to use its aircraft for upwards of 12 hours per day, and these planes routinely operate multiple legs per day with only about an hour or less between flights. The carrier uses its planes heavily, and the PW1500G would quickly run into issues under such operating conditions.

It would cause significant disruption if Southwest were to be affected by a large grounding of an A220 fleet. These issues are undoubtedly holding back some carriers from buying the A220 until a permanent fix is widely implemented. In addition, Southwest has a long-standing relationship with CFM, going back to when the CFM56-3 was first offered on the 737 Classic in the 1980s.

Meanwhile, the carrier generally does not work with Pratt & Whitney. It would be a new agreement between two parties that do not have a deep relationship, and as such, Southwest would likely not be able to negotiate the same terms and pricing that the carrier receives with CFM.

Southwest’s Future Fleet Strategy

Credit: Shutterstock

Southwest is hyper-focused on operating one type of aircraft and heavily using its aircraft. Eventually, Southwest will need to add a second type, at the latest when Boeing begins developing a replacement for the 737, but for now, the carrier is all-in on the Boeing 737 MAX. Southwest already operates 315 737 MAX 8s, with another 181 on order, and it will also begin rapidly taking 269 737 MAX 7s once the type is finally certified.

Southwest’s 737-700s are aging and are actively being retired, although many will receive interior upgrades as the carrier modernizes its cabins. Eventually, as the 737 MAX 7s begin arriving, the 737-700 fleet will be fully retired. In addition, although Southwest’s 737-800s are relatively young, the airline will fully replace these planes as well, aiming to simplify to the CFM LEAP-powered 737 MAX by 2031.

Southwest Airlines has been looking to expand its premium cabin offerings and possibly even launch flights to Europe, but many European destinations would require a widebody. However, it’s unlikely that Southwest is seriously considering ordering a widebody type in the near future, as it remains focused on domestic flying and on operating an all-737 fleet. If it does expand into Europe, it will likely initially launch routes that can be flown by the 737 MAX.