Early this morning, Southwest Airlines released its 2023 Q1 financial report. In the report, the airline shared that it anticipates receiving fewer Boeing 737 MAX 8s this year than anticipated. Until recently, the airline has been expecting 90 737-8s to be delivered in 2023. Following this latest announcement, it only expects to receive 70 this year. The cut comes as MAX deliveries continue to be hampered by manufacturing delays. While the airline will likely receive fewer deliveries this year, the number of MAXs on order is unlikely to change.

Buyer's remorse

The story of the 737 MAX is complicated, to say the least. From high-profile accidents to lawsuits to pandemic-related production delays, the MAX has continuously found itself in headlines around the globe. Despite its setbacks, many airlines continue to cherish the MAX series as orders continue to grow. However, in recent months Boeing has run into several hiccups with its manufacturing process due to a lack of readily available parts, which has slowed production and deliveries considerably.

Southwest Airlines, which has placed orders for over 200 MAX 8s, has only received a small portion of these airplanes. It has been waiting for 90 additional 737-8s to be delivered throughout this year. With recent delays at Boeing production facilities, Southwest has opted to decrease its expectations in stating that it only anticipates 70 MAX 8s to be delivered by year's end. The President and CEO of Southwest Airlines, Bob Jordan, stated the following concerning the decrease in anticipated deliveries,

"While we are mindful of the uncertain economic environment, demand for domestic air travel remains strong, thus far. Our goal remains to manage inflationary cost increases and maintain our competitive cost advantage. Due to recent delivery delays at The Boeing Company (Boeing), we are further reducing planned 2023 aircraft deliveries to 70 from 90, resulting in an approximate one-point decrease in year-over-year planned 2023 capacity."

While a decrease in 20 plane deliveries will undoubtedly affect Boeing's yearly profits, it is not entirely unexpected. According to Reuters, two weeks ago; airline executives shared skepticism concerning production numbers as the airline noted that the delays would likely affect MAX deliveries throughout the year.

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Waiting on two birds

While the MAX 8 has been the most successful member of the 737 MAX family, it is not the only member Southwest is waiting on. Southwest has also been awaiting deliveries of the smallest member of the 737 MAX family, the MAX 7. The airline has placed an order for 189 737-7s. Upon placing the order, the airline was optimistic in expecting to receive 31 MAX 7s throughout 2023. Unfortunately for Southwest and Boeing, the MAX 7 has yet to receive FAA certification. Despite Boeing's best efforts, it is still unclear when the MAX 7 will be fully certified.

Southwest already operates a sizable fleet of Boeing 737 airliners. However, this fleet is aging faster than it is growing due to various delays in MAX production, which is of considerable concern to the airline as it plans to build a fleet of strictly MAX airplanes. Thankfully, it will still receive deliveries of the MAX 8 as it steadily retires its Boeing 737-700s. It plans to retire 26 of these airliners this year. With 70 new MAX 8 deliveries, the airline will expand its capacity considerably. Still, airline executives fear it will be insufficient to meet the rapidly expanding air travel demand it faces.

What do you think of Southwest shrinking the number of expected MAX 8 deliveries for 2023? Let us know in the comment section..

Source: Reuters

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  Southwest Airlines

  IATA/ICAO Code:

  WN/SWA

  Airline Type:

  Low-Cost Carrier

  Hub(s):

  Baltimore/Washington International Thurgood Marshall Airport, Dallas Love Field, Denver International Airport, Harry Reid International Airport, Hartsfield-Jackson Atlanta International Airport, Houston Hobby Airport, Los Angeles International Airport, Midway International Airport, Oakland International Airport, Orlando International Airport, Phoenix Sky Harbor International Airport

  Year Founded:

  1967

  CEO:

  Robert Jordan

  Country:

  United States

• 

  Boeing

  Stock Code:

  BA

  Date Founded:

  1916-07-15

  CEO:

  Dave Calhoun

  Headquarters Location:

  Chicago, USA

  Key Product Lines:

  Boeing 737, Boeing 747, Boeing 757, Boeing 767, Boeing 777, Boeing 787

  Business Type:

  Planemaker