Southwest Airlines is eagerly looking at its Boeing 737 MAX order book. In 2021, the airline exercised even more options, including some on January 1st, 2022, bringing its firm MAX order book for 2022 to 77 aircraft, with options for 37 more. Speaking on the airline's fourth-quarter earnings call, the airline's executives highlighted their positive impressions of the MAX and are expecting to exercise the remainder of its options in 2022.

Southwest is betting on its MAX order book to phase out older, inefficient jets. Photo: Vincenzo Pace | Simple Flying

Southwest Airlines' big MAX order book

Southwest Airlines has 77 firm MAX aircraft on order in 2022. This includes 72 MAX 7s and five MAX 8 aircraft. In the fourth quarter of 2021, Southwest exercised options for 22 MAX 7s. However, on January 1st, 2022, the airline exercised an additional seven MAX 7 options and five MAX 8 options.

This brings its overall firm MAX order book to 271 MAX 7s and 135 MAX 8s. It still retains 226 options, bringing its overall firm orders plus options to 632 planes. This order book extends out to 2031, though the bulk of these deliveries will happen between 2022 and 2026. The MAX 7 will make up the majority of deliveries until 2026, from when Southwest expects to take more MAX 8 aircraft. Southwest's MAX options can be exercised for either MAX 7s or MAX 8s, and with written advanced notice, Southwest can also designate firm orders as MAX 7s or MAX 8s.

Southwest racked up a $75 million bill for its cancelations in October, which left thousands stranded. Photo: Vincenzo Pace | Simple Flying

Southwest looks at a big 2022 with the MAX

Speaking on the carrier's fourth-quarter earnings call, Chief Financial Officer Tammy Romo stated the following on the airline's MAX plans:

"We currently have 77 MAX firm orders and 37 MAX options with Boeing this year. While our plan assumes we will exercise the remaining 37 options this year, we maintain the flexibility to evaluate that intention as decision points arise."

This is in line with much of Southwest's previous commentary around the MAX and its options. It has consistently maintained that it is looking closely at those options, and the bar is relatively low for the airline to exercise its options. Should it exercise the remaining options, it could take up to 114 MAX aircraft in 2022, which would certainly be a big year for the airline from a delivery standpoint. The bulk of the order for MAX aircraft is designed to facilitate retirements of Boeing 737-700 aircraft, of which Southwest expects 30-35 aircraft to exit the fleet per year.

While 2022 might be a big year for deliveries, the company is carefully considering when the planes may enter service.

Southwest 737 MAX Getty
Southwest Airlines is also heavily betting on the 737 MAX. Photo: Getty Images

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It may be 2023 when the planes enter service

Mike Van de Ven, President and Chief Operating Officer, stated the following on when the MAX will enter service:

"Boeing is telling us that they’re targeting ATC for the MAX 7 by the end of the first quarter. Of course, that’s contingent on the FAA review process, which is a little bit different for airplanes after the MAX grounding. Once they get that type certificate...we’re planning on about 7 months to be able to bring that airplane on our operating certificate."

Boeing is working with the Federal Aviation Administration (FAA) to get certification for the MAX 7. While it has already received certification for the MAX 8 and MAX 9, and both are already in revenue passenger service, the MAX 7 is next up for certification. Boeing is still anticipating delivering its first MAX 7 in 2022.

737 max 7
The Boeing 737 MAX is expected to garner some major attention over the next decade. Photo: Getty Images

Mr. Van de Ven added the following:

"Boeing is a very good partner with us, and so we still expect to take the 114 airplanes at this point. But we may not be flying the MAX 7 until early 2023."

Ultimately, while Southwest could take delivery of up to 114 MAX jets, of which the vast majority will be MAX 7s, it does not necessarily mean those planes will be in service right away. This does put a bit of a crunch on the airline's team for network and schedule planning, which is looking at restoring much of the airline's pre-crisis depth in key markets throughout 2022. The MAX order book underscores more of a long-term commitment to fleet renewal and supporting the airline's 2020 and 2021 expansion into 18 new airports and sizable growth in Hawaii.