Why Southwest acquiring Airbus jets makes no sense
The article was first published on October 28, 2019.
The 737 MAX crisis has had an impact on many aspects within the aviation industry – from relationships between airlines and manufacturers, trust among aviation authorities to the relationship between passengers and the industry, the groundings have shifted the industry. What was once the best option to save money in the short-term, has costed Boeing in many ways.
One of its biggest customers, Southwest Airlines, has been in the rumor mill of acquiring Airbus aircraft – from a reported meeting with an Airbus A220 operator back in April 2019 to the airline’s Chief Executive Officer (CEO), Gary Kelly telling Bloomberg Markets that the airline “will be looking at that question next year”.
The relationship between Southwest and Boeing, dating back to June 1, 1971, when the manufacturer delivered the first 737 to the carrier, is thought to be untouchable by any other aircraft builder. Throughout those 48 years, nobody managed to curb the relationship between the two, as Southwest was always a loyal Boeing customer.
And it should stay that way.
Going back in time – easyJet case
The United Kingdom-based low-cost carrier, easyJet, was in a similar position in the early 2000s. easyJet wanted to grow – in 2002, the airline engaged in talks with both Airbus and Boeing of acquiring new aircraft to provide the needed capacity to scale-up its business.
However, prior to the decision, easyJet exclusively operated Boeing 737 aircraft – as of September 2002, it had 64 of Boeing’s narrow-bodies, with 12 more 737s coming up until May 2004. On October 15, 2002, easyJet announced something very rare to this day – an all-Boeing operator ordering Airbus aircraft – as it inked a deal with the European manufacturer to acquire 120 A320 family jets, with 120 more options. Prior to this, Airbus’ presence within low-cost carrier fleets was almost non-existent.
The then-Chief Commercial Officer of the manufacturer, John J. Leahy, said:
“This is an important deal. It has been quite strategic for us. Due to some historic factors, our presence hasn't been that strong with the low-cost airlines”.
The deal was under a lot of scrutiny – some questioned how much of a discount did Airbus give to easyJet to persuade the switch, while some even questioned if the deal was even profitable for the manufacturer. Leahy noted that the deal met their parameters, closing the profitability question.
The daunting similarity with the current Southwest situation is the fact that the Boeing 737 was experiencing severe issues with its rudders during the 1990s, resulting in two deadly crashes: United Airlines Flight 585 (25 people passed away) in 1991 and USAir Flight 427 (132 deaths) in 1994. The aircraft type was not grounded, but the National Transportation Safety Board (NTSB) in its report ordered 737 operators “to incorporate design changes for the B-737 main rudder power control unit servo valve when these changes are made available by Boeing”, as these changes should “preclude the possibility of rudder reversals attributed to the overtravel of the secondary slide”.
easyJet highlighted the issue as a potential risk when the low-cost carrier was acquiring its close rival, a former-British Airways’ subsidiary, Go in 2002:
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