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Southwest CEO hints the airline’s 47-year love affair with Boeing’s 737 may end one day

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Southwest Airlines Boeing 737 Max aircraft are parked on the tarmac at the Southern California Logistics Airport in Victorville after being grounded.
(Mark Ralston / AFP / Getty Images)
Bloomberg

Southwest Airlines Co. built its low-cost model on the efficiencies of flying a single plane, the Boeing Co. 737. Now the carrier’s chief executive officer is cracking open the door to the idea that nothing lasts forever.

In the aftermath of the second deadly crash of the new Max model and a global grounding of the plane, Southwest CEO Gary Kelly keeps getting asked whether the airline will remain true to the 737, which the company has relied on exclusively since beginning operations in June 1971. And he keeps saying there’s no long-term guarantee.

He conveyed that message last week while speaking to a Dallas business group. And he repeated it Thursday after Southwest reported results, while emphasizing that the carrier has no immediate plans to add any other kind of planes or alter its pending orders for more than 200 of the Max jets.

“There is no reason at this point in time to declare that we’ll have a single aircraft type forever or not,” Kelly said in an interview. “Obviously the situation with the Max is not anything that’s been happy for us. I’m not going to try to deny that.”

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An all-737 operator is “who we are,” he later told CNBC. “That doesn’t mean we’ll be an all-737 carrier into perpetuity.”

Southwest, the biggest U.S. operator of the Max, “constantly” looks at aircraft and technology being developed by other manufacturers including Airbus SE, Kelly said last week at the North Dallas Chamber of Commerce.

This week, he said Southwest has “a duty to look at anything new that develops.” The company also needs to understand the planes flown by competitors.

“There’s no time frame on anything, but down the road if there are some growth initiatives or an acquisition that adds a different plane to the fleet, maybe that door opens a little,” said Jeff Windau, an Edward Jones analyst.

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The Dallas-based carrier has pulled the Max from its schedules through Aug. 5, canceling 130 flights a day. The revamped version of Boeing’s single-aisle workhorse has been grounded for six weeks.

Kelly said that Southwest has “the utmost confidence” in the Max and Boeing. Southwest will develop plans to help any passengers who may hesitate to fly on the Max once the plane is fixed, he said.

Boeing is crafting an update to a software program linked to a March crash in Ethiopia and an October accident in Indonesia. The disasters killed 346 people. Boeing’s proposed fix would require approval by the U.S. Federal Aviation Administration and regulators around the world before flights resumed.

On Wednesday, Boeing suspended its revenue and profit guidance for the year. It said the suspension of 737 Max deliveries has cost it $1 billion so far.


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