Southwest Looking At Airbus

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Key Takeaways:

  • Southwest Airlines is re-evaluating its long-standing exclusivity with Boeing, with CEO Gary Kelly indicating the airline may not remain an all-737 carrier indefinitely.
  • Southwest executives have reportedly inquired about and observed the Airbus A220, though the CEO downplayed these actions as "coincidental."
  • This potential shift in supplier comes amid the ongoing grounding of Boeing's 737 MAX, an aircraft Southwest has ordered and still views as the best single-aisle airplane, despite the current issues.
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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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