Southwest Looking At Airbus

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Key Takeaways:

  • Southwest Airlines, traditionally an exclusive Boeing 737 operator, is reportedly exploring alternative aircraft, specifically the Airbus A220, signaling a potential shift in its long-standing single-supplier strategy.
  • CEO Gary Kelly acknowledged the airline might not remain an "all-737 carrier into perpetuity" but affirmed a strong, historic partnership with Boeing and continued confidence in the 737 MAX despite its grounding.
  • Southwest still plans to proceed with its existing order for 200 Boeing 737 MAX aircraft.
  • Southwest executives recently visited Europe to observe A220 operations firsthand, an event CEO Kelly described as "coincidental."
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Like peanut butter and jelly, Southwest Airlines and Boeing have been inextricably linked but maybe not so much anymore. Southwest officials have reportedly been asking questions about the Airbus A220, the highly regarded former Bombardier CSeries single-aisle program acquired by Airbus last year and now being operated by Delta, Korean Air and Swiss, among others. Last week Southwest CEO Gary Kelly told CNBC his airline may no longer be exclusive with its only aircraft supplier thus far. “Well, yeah, we’re an all-Boeing carrier. We’re an all-Boeing 737 carrier. So, that’s who we are, that’s where we are,” he told interviewer Jim Kramer. “That doesn’t mean that we’ll be an all-737 carrier into perpetuity. But that’s certainly where we are right now.”

That shot across the bow came as Boeing’s leadership girded for its annual shareholders’ meeting Monday, in which former U.N. Ambassador Nikki Haley was expected to join the board of directors. The ongoing grounding of the 737 MAX will dominate discussion and the company’s biggest customer’s boss had some other words of encouragement for Boeing. “We have a great, historic partnership with that company, and I would expect that would continue going forward,” Kelly said. “But, yeah—we’ve got to work through this MAX issue. When we launched the MAX airplane, we felt like it was the best single-aisle airplane in the world, and we still feel that way.” He also said Southwest plans to go ahead with its order for 200 Maxes. He also said sending a delegation of Southwest executives to Europe to view firsthand an airline’s operation of the A220 earlier this month was “coincidental.”

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