August 2012

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Southwest VP: 2020 is too long to wait for a new airplane

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Southwest Airlines Boeing 737-700 N951WN

A top vice president at Boeing's biggest narrowbody customer, Southwest Airlines, says the end of the decade is "too long to wait" for an all-new airplane to replace its 737 Classics, but giving the US airframer an idea of what it wants will have to wait as the carrier turns its attention to merging with Atlanta-based AirTran Airways.

"We've got fleet of 200 airplanes out there at some point we're going to have to do something with and we can't wait until 2020," says Southwest Airlines vice president operations coordination center, Jeff Martin in regard to the carrier's aging block of 737-300s and -500s.

Martin spoke to ATI on the sidelines of the Air Transport World's Eco-Aviation conference in Washington, DC.

Boeing has said it plans to provide additional clarity at June's Paris air show on whether it plans to proceed with development of a mid-decade re-engining of the 737 or proceed with an all-new aircraft with an entry into service pegged for 2019 or 2020, though direct input from Southwest, suggests Martin, may not yet available until next 2012 at the earliest.

With its recently completed acquisition of AirTran, Southwest is turning its attention to integrating the two carriers, a departure from its historical methodical organic growth, which includes - for the first time - seeing if it can operate multiple types in its history with the introduction of the Boeing 717 along side its 737s. 

Martin says the AirTran acquisition has "changed our whole philosophy" now that Southwest has jumped to a multiple fleets, which "perks up everybody's ears" eliminating the sole barrier to entry for manufacturers other than Boeing to sell aircraft to the carrier.

"We're going to manage multiple fleets, but what we're really going to look at is who can bring us 25% efficiency," he says, adding that a re-engined 737 Next Generation aircraft won't deliver that benefit over Southwest's 737 Classics, despite a willingness to look at that option.

"We've squeezed the turnip, there's nothing left in the NG. It now goes back to the airframe and the engine. We'll look at re-engining, but we're waiting for someone to tell us what [Boeing is] going to do," says Martin of the incremental improvement it has sought through technology updates to its 737s, including having installed winglets on 80% its 737 fleet.

"Once we get through AirTran we've got another year's work I think then we'll come up and start looking around and determine what we're going to do," he says of selecting a new narrowbody. "Right now, it's all hands on deck for the integration, but we know we've got a subfleet of airplanes that we need to address and that's the classics and there's 200 of them."

If Boeing does move forward with an all-new narrowbody to replace the venerable 737 at the end of the decade, it aims to offer 20% improvement in fuel efficiency and 10% better cash operating costs over today's 737-700 offering.

The challenge to the airframer already believes it can deliver 15% fuel burn improvement with a new engine and a modest investment, but the cost of advancing fuel efficiency an additional 5% places the development cost skyrocketing with an all-new jet.

Technology Opens The Door

Southwest's $175 million investment to move from round dial displays on the 737-700 flight deck displays to the primary flight display/navigation display (PFD/ND) arrangement for precision navigation has also allowed the low-cost carrier to expand its search beyond Boeing for an aircraft to replace the 122-seat 737-500 and 137-seat 737-300.

"From what I had told [CEO Gary Kelly] the automation changes that we're making on the flight deck and going PFD/ND opens up any fleet type we want. Not just Boeing, but we understand all cockpits look like this now," says Martin. "We had placed ourselves on an island flying round dials without automation, so this will provide us benefit when we go into the marketplace.

"We won't have to go to someone and say "can you re-program the software to make this look like a [737-200], oh can you disconnect the auto throttles and VNAV we don't use all those things." People would have laughed at us."

Though despite this "level playing field" for the Bombardier CSeries arriving in late 2013, Airbus A320neo first delivering in October 2015 and potentially even an offering from Embraer, the strong relationship with Boeing, adds Martin, is well intact.

Adding, the need to replace its aging fleet of 737 Classics combined with Boeing's timing for a new narrowbody may be incompatible for Southwest, but that has not disqualified its sole aircraft vendor for the past four decades from the competition.

"We'll give them a shot just like everybody else, main thing is as any partner you have to communicate with them exactly what you want. Not sure we have on our side have fully defined that for them."

Exactly what Southwest wants in a new Boeing narrowbody aircraft will also be guided by the 2012 introduction of the larger 737-800 into the airline's fleet, a boost of 40 seats over its 737-700. The first 737-800 equipped for extended operations (ETOPS) is set to be delivered to the carrier in March 2012.

"We haven't told [Boeing] what size we would want yet, we haven't defined that yet," says Martin. "So, in their defense it's pretty hard when the customer says well "we think we want this many seats, we think we want that many". Well I don't blame them, how do you design to that? So it goes back to that, we'll know more after we have the -800 in service for a while."

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