Southwest Airlines is betting it won't need 140 737 jets for a while
Southwest Airlines will fly fewer than half of its 742 Boeing 737s on any given day through at least June as it responds to the decimation of travel demand by the coronavirus pandemic.
Of the roughly 390 parked jets, the Dallas-based carrier has placed some 140 in what it considers long-term storage, Southwest operations chief Michael Van de Ven said during an earnings call on Tuesday. These planes include 106 737-700s and -800s selected due to age or upcoming maintenance events, as well as its already grounded 34 737 MAX 8s.
Southwest is betting it will not need these stored aircraft anytime soon. The 106 737-700s and -800s represent nearly 15% of its operational fleet that, based on Van de Ven's comments, will take several days each to return to operation.
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U.S. airlines are navigating how much to cut from schedules and for how long amid unclear prospects. While some states have begun loosening stay-at-home restrictions aim to slow the spread of COVID-19, people remain wary of flying in a confined tube.
A recent International Air Transportation Association (IATA) survey found that as many as 40% of would-be travelers will wait at least six months after restrictions are lifted before getting back on an airplane.
Southwest CEO Gary Kelly cited this unease during the call Tuesday. He said the airline is exploring measures to allow some semblance of social distancing onboard flights, including possibly capping the number of seats it sells on any given flight at less than a plane's capacity.
"Right now the bias is towards shrinking the airline some, not radically," said Kelly in response to questions on Southwest's recovery plan.
Related: Southwest considers selling fewer seats to allow for social distancing
Other U.S. airlines have slashed more capacity and parked more planes than Southwest. United Airlines could fly as little as 10% of its schedule through June, while Delta Air Lines is in the midst of parking around 650 of its more than 1,300 aircraft. In addition, American Airlines and Delta will retire some fleets completely, including the former's Boeing 757s and 767s and the latter's McDonnell Douglas MD-88s and MD-90s.
Southwest is keeping its options open. The roughly 250 737s in short-term storage are being rotated into and out of regular service in order to keep them in operational condition and ready for the eventual recovery.
"The benefits of the short-term parking program is that the aircraft do remain part of the active fleet and it is more cost effective, in terms of storage costs, than the long-term storage program," said Nealon.
Related: Southwest may cancel your flight on short notice as it 'tactically' trims more capacity
One fleet that Southwest does not expect to return to the sky anytime soon is the MAX. Grounded since March 2019, the airline has now removed the type from schedules through the end of October. In addition, it has cut new deliveries by 75 aircraft to just 48 through the end of 2021.
Southwest anticipates deliveries of up to 27 MAX — the number of the planes Boeing has built and stored pending Federal Aviation Administration re-certification — by the end of 2020.
The airline is storing planes around the country. The 737-700s and -800s in long-term storage are parked at Indianapolis (IND), Paine Field (PAE) near Seattle, and Victorville, California (VCV). Short-term aircraft are parked at airports around its network with daily space.
Related: It may be years until passenger demand returns to 2019 levels for US airlines
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