Tag Archives: Southwest Airlines

Southwest Airlines celebrates 50 Years with a special podcast series

Best Seller - The original three Boeing 737-200s, original titles

Southwest Airlines this week celebrates the 50th Anniversary of the carrier’s first commercial flights, which took place on June 18, 1971. To offer Customers and Employees a unique perspective on stories from the airline’s colorful history, Southwest®, L.A. Times Studios, and At Will Media partnered to create the airline’s first public-facing episodic podcast series, called “Is This Seat Open?” which includes 20 episodes.

The podcast title, “Is This Seat Open?” draws upon Southwest’s open-seating policy, which is one of the ways the Company uniquely stands out in the industry and has been in place since the airline’s founding in 1971. “Is This Seat Open?” is available on all podcast platforms, including iHeartRadio, Stitcher, Apple Podcasts, Spotify, and more. There are currently 10 episodes available, with additional episodes launching on June 15 and June 22 for a total of 20 episodes in the series.

Stories are best told by the people who experienced them firsthand, so the narratives in this podcast are vibrantly depicted by some of the People who were a part of Southwest’s iconic moments through the carrier’s 50-year history. Southwest Employees Quinnie Jenkins, a Manager in Community Outreach, and Lucas Hershberger, an Inflight Supervisor, host the podcast.

The podcast project includes a companion website, latimes.com/isthisseatopen, which features photos, archival content, videos, news clips, and write-ups for further context and information about each story.

The podcast episodes feature moments throughout Southwest’s history, beginning with stories from the early years of the airline up to present-day, including:

  • Who Was Herb? Hear about Southwest Founder, Herb Kelleher, from the perspective of his daughter, Ruth.
  • Fare Play & Bottle of Booze: Southwest’s Senior Vice President and Chief Marketing Officer Ryan Green shares how a 1973 marketing masterstroke saved the fledgling airline and helped it turn its first annual profit.
  • Bringing Dad Home: Now retired Southwest Pilot Bryan Knight reveals how Southwest helped him honorably lay to rest his late father, a Vietnam veteran who had been missing for 52 years.
  • Go-Go Boots, Khakis, & Jams: Southwest Employee uniforms have been iconic throughout the carrier’s 50 years of flying. Kelli Bartlett, a Flight Attendant who has been with Southwest for more than four decades, recalls each unique uniform throughout the years and describes the current 75 bold, striking, and casual-yet-professional pieces worn today.

Anyone can tune in to the podcast on the ground, and Southwest Customers can listen to “Is This Seat Open?” via iHeartRadio free of charge through the Inflight Entertainment Portal on their personal devices. Customers who already have the iHeartRadio app installed on their devices can play the podcast directly from the app while onboard Southwest flights.

To learn more about Southwest’s 50th Anniversary and the five-decade-long history of friendly, reliable, and low-cost air travel, visit Southwest50.com.

Due to licensing restrictions, iHeartRadio may not be available onboard WiFi-enabled international flights. The iHeartRadio product is available only on WiFi-enabled aircraft. “Is This Seat Open?” is funded by Southwest Airlines and produced by L.A. Times Studios and At Will Media. The Los Angeles Times newsroom was not involved in the production of this podcast.

A “retrojet” plane

1971 – Present

Pure Heart: The Evolution of the Southwest Corporate Logo

On June 18, 1971, a Boeing 737 “red bellied warrior” with the Southwest name took off from Love Field in Dallas, carrying its first paying Customers and launching a revolution that democratized the skies.

At a time when air travel typically was limited to elite “jet setters,” and airlines were introducing more class-based fare structures, Southwest was leveling the playing field. Its low fares; first-come, first-served mentality; and Fun-LUVing Attitude marked a departure from traditional airlines and helped define the Southwest business model. By the mid-1970s, Southwest had emerged as a true industry disruptor, but capturing the airline’s Heart in a corporate identity wasn’t a task for the faint of heart.

For its first 10 years, Southwest never formalized its corporate logo. But its identity was still unmistakably unique—from what were known as Hostesses (Flight Attendants) in go-go boots and hot pants to its desert gold, red, and orange airplanes. These planes were so much a part of the Company’s early identity that two Southwest planes today are painted desert gold as “retrojet” livery.

Although it didn’t become the official brand mark of the airline until 1981, the tri-color parallelogram had been used in one way or another since Southwest took flight in 1971. Inspired by a Ramp Agent’s uniform, the colors—orange, red, and desert gold—mirrored the paint on Southwest jets and were intended to create the illusion of an airplane tail in motion.

On its 20th anniversary in 1991, with the introduction of the “heart with wings” logo, the Company introduced the Heart that has since become synonymous with Southwest.

“The Heart, of course, is for LUV,” said Colleen Barrett, Southwest President from 2001 to 2008. The addition of wings was a given. “After all, we issue wings to first-time flyers and Unaccompanied Minors, and . . . Flight Attendants wear winged name tags,” she said. “When we decided that we were going to have an anniversary logo, it seemed natural that wings would be a part of that.” Even after the anniversary year, the wings stuck.

While it was never an official logo, the “takeoff image” became an important visual component of Southwest marketing in the 1990s and early 2000s. The Company had built its following around a brand promise that gave people the “freedom to fly,” so using imagery that reflected that sense of freedom was a natural extension of the brand. It appeared frequently in Southwest advertising and was featured in early iterations of the Southwest website.

The next evolution of the Southwest logo came in 2014—a big year for the airline on all counts. With the Wright Amendment finally repealed, Southwest expanded into big-time markets like New York and Washington, D.C., and added international destinations, as well. It also successfully integrated AirTran Airways into its operations. No longer the underdog of the 1970s, Southwest was ready for a brand identity that better reflected its status as an industry trailblazer and trendsetter.

Southwest assembled a creative task force to tap more than 40 years of the Company’s history in an epic evolution of its visual identity. The task, was to take everything Customers and Employees love about Southwest and turn it into a one-of-a-kind brand visualization.

Even as the identity evolved, the livery remained the same—with the bold brand colors reminding the world that Southwest isn’t like other airlines, and the Heart symbol on the belly of the plane conveying it as the airline with Heart and Hospitality. Every decision backs up the fact that the Values that put Southwest in the air in 1971 are the same Values that will take it into the future. The modern refresh stays true to Southwest’s DNA while incorporating bolder, more modern colors, reflected across all facets of the business: planes, airports, corporate communications—even snack packaging.

When it comes to the business of branding and marketing, Colleen said, “we must never allow the marketing of Southwest to be so strategic that we lose our heart and soul.” With the Heart as the emotional punctuation of the brand moving forward, Southwest reaffirms its commitment to keeping its Values and Culture at the core of its corporate expression.

Top Copyright Photo: The “Original Three 737s” rest at the DAL base on a slow day in the early days. Southwest Airlines Boeing 737-2H4 N21SW (msn 20345) (original fleet and livery) DAL (Bruce Drum). Image: 101942.

Southwest Airlines aircraft slide show (old liveries):

Southwest announces its new schedule, adds Syracuse, will resume all international services

Southwest Airlines, which is celebrating the 50th Anniversary of its first flights this month, has extended its bookable flight schedule through Jan. 5, 2022, adding the carrier’s 18th new airport since early 2020.

The carrier announced today service to Syracuse Hancock International Airport (SYR) in New York, will begin Nov. 14, 2021. Syracuse will become the 121st airport for Southwest®. The carrier also published new flights today that resume service to all previously served international destinations.

SOUTHWEST SERVICE IN SYRACUSE, NEW YORK BEGINS NOV. 14, 2021

Southwest continues to grow across North America with service to its sixth destination in New York: Syracuse, beginning Nov. 14, 2021. Southwest initially will offer up to three daily flights each way between Syracuse and Baltimore/Washington (BWI).

Fly nonstop between
Syracuse and:

Initial service:

One-way fares as low as*:

Baltimore/Washington (BWI)

3 times daily

$49

*The number of seats, days, and markets for these fares are limited; blackout dates apply. Book from June 10, 2021, through June. 11, 2021. 

Southwest additionally will offer nonstop service on select Saturdays during peak fall and winter holiday periods between Syracuse and Orlando.

SOUTHWEST TO BEGIN SERVICE FROM BELLINGHAM, WASH. NOV. 7, 2021

On Nov. 7, 2021, Southwest also will begin service to Northwest Washington with new service twice daily between Bellingham, Wash. and Oakland and once daily between Bellingham, Wash. and Las Vegas.

Fly nonstop between
Bellingham, Wash. and:

Initial service:

One-way fares as low as*:

Las Vegas

1 time daily

$39

Oakland

2 times daily

$39

*The number of seats, days, and markets for these fares are limited; blackout dates apply. Book from June 10, 2021, through June 11, 2021.

RETURNING TO INTERNATIONAL DESTINATIONS, PLUS NEW CANCUN SERVICE FOR CHICAGO (O’HARE) AND KANSAS CITY

With demand for beach and leisure destinations continuing to increase, Southwest intends to resume service to all of its previously served international destinations by Nov. 7, 2021.

Effective Oct. 7, 2021, Southwest intends to resume once daily nonstop service between Ft. Lauderdale and:

One-way fares as low as*:

Nassau, Bahamas

$69

Grand Cayman, Cayman Islands

  $99**

Providenciales, Turks and Caicos

$99

 

Effective Nov. 7, 2021, Southwest intends to resume once daily nonstop service between Ft. Lauderdale and:

One-way fares as low as*:

Cancun, Mexico

$99

Montego Bay, Jamaica

$129

 

Effective Nov. 7, 2021, Southwest intends to resume once daily nonstop service between Houston (Hobby) and:

One-way fares as low as*:

Belize City, Belize

$99

*All international destinations served prior to April 2020 will resume operations by Nov. 7, 2021. Not all routes previously offered will be available. The number of seats, days, and markets for these fares are limited; blackout dates apply. Book from June 10, 2021, through June 11, 2021. 

**Service to Grand Cayman resumes Oct. 7, 2021, subject to border reopening.

Photo creds: @nortex.jets on Instagram.

New Nonstop Flights to Cancun

Southwest will serve Cancun nonstop from 17 airports in the U.S. as winter 2021/2022 begins. Starting Nov. 7, the airline will offer new, seasonal, daily service between Chicago (O’Hare) and Cancun, complementing the carrier’s daily Cancun service from Chicago Midway Airport.

Fly nonstop between:

Initial service:

One-way fares as low as*:

Chicago (O’Hare) and Cancun

Daily

$129

*The number of seats, days, and markets for these fares are limited; blackout dates apply. Book from June 10, 2021, through June 11, 2021. See a full list of fares, fare rules, and terms and conditions below and at Southwest.com.

On Nov. 13, Southwest will bring its first-ever international service to Kansas City with seasonal service on Saturdays between Kansas City and Cancun.

Escape to the Caribbean and Central America

Southwest continues responding to growing Customer demand for more access to beaches. Beginning Nov. 13, 2021, Southwest intends to launch seasonal service on Saturdays between Denver and Liberia, Costa Rica. The same day, the airline will begin Saturday-only service between both St. Louis and Buffalo/Niagara Falls and San Juan, Puerto Rico.

More Heart for Hawaii
As Southwest begins previously announced service this month to Hawaii from Los Angeles (LAX), Las Vegas, and Phoenix, the carrier is also adding new service between Sacramento and Kona on Mondays, Wednesdays, Fridays, and Sundays, starting Dec. 19, 2021.

NEW NONSTOP FLIGHTS THROUGHOUT THE UNITED STATES

Effective Oct. 7, 2021, Southwest will add daily nonstop service between:
Sacramento and Palm Springs, Calif.

Effective Nov. 7, 2021, Southwest will add nonstop service between:
Washington, D.C. (Reagan National) and Sarasota, Fla. (Daily)
New York (LaGuardia) and Sarasota, Fla. (Sundays through Fridays)
Dallas (Love Field) and Palm Springs, Calif. (Weekly on Sundays, plus peak travel days).

Southwest exercises 34 options for the new Boeing 737-7 MAX 7s

Southwest Airlines has announced it will exercise 34 options into firm orders for the Boeing 737-7 MAX 7. This brings the firm total to 234 aircraft.

In addition, Southwest also has 149 Boeing 737-8 MAX 8 on order through 2031.

The company will use the new aircraft to retire older 737s.

The airline filed this update:

Based on improving revenue trends and ongoing fleet modernization plans, the Company recently entered into a Supplemental Agreement with The Boeing Company (Boeing) to increase its 2022 firm orders by 34 Boeing 737 MAX 7 (MAX 7) aircraft (consisting of two 2022 options exercised and 32 options accelerated and exercised from later years), resulting in 234 firm orders for MAX 7 aircraft.
Additionally, the Company accelerated 32 options into 2023, 16 options into 2024, 16 options into 2025, and added 32 new options into 2026 through 2027, bringing the total firm and option order book to 660 aircraft.
The Company continues to estimate its 2021 total capital expenditures to be approximately $500 million, with minimal aircraft capital spending, and now expects its contractual aircraft capital spending to be approximately $1.5 billion in 20225, compared with its previous guidance of approximately $700 million.
Fleet and capacity plans will continue to evolve as the Company manages through this recovery period, and it will continue to evaluate its remaining 40 MAX options in 2022.
The Company continues to plan to retire 30 to 35 of its Boeing 737-700 aircraft annually, on average, over the next 10 to 15 years; however, with its cost-effective order book, the Company retains significant flexibility to manage its fleet size, including opportunities to accelerate fleet modernization efforts if growth opportunities do not materialize.
Additional information regarding the Company’s delivery schedule is included in the following table.

 

New 737 Delivery Schedule:

The Boeing Company
MAX 7
Firm Orders
MAX 8
Firm Orders
MAX 7 or 8 Options Additional MAX 8s Total
2021 19 9 28 (a)
2022 64 40 104
2023 30 70 100
2024 30 56 86
2025 30 56 86
2026 15 15 40 70
2027 15 15 6 36
2028 15 15 30
2029 20 30 50
2030 15 45 60
2031 10 10
234 149 (b) 268 9 (c) 660
(a) Includes 20 737 MAX 8s delivered as of March 31, 2021, consisting of 12 owned and 8 leased aircraft.
(b) The Company has flexibility to designate firm orders or options as MAX 7 or MAX 8, upon written advance notification as stated in the contract.
(c) These 9 additional MAX 8 aircraft are leases from various third parties, including 8 leased MAX 8 aircraft delivered in first quarter 2021. The Company also received 7 leased MAX 8 aircraft in fourth quarter 2020, for a total of 16 MAX 8 operating leased aircraft from third parties in 2020 and 2021, combined.

Previously on March 29, 2021 the company issued this statement:

Southwest Airlines has announced the completion of its previously disclosed discussions with The Boeing Company (Boeing) regarding the restructuring of its delivery schedule for MAX aircraft. The Company has completed the multi-year evaluation of the successor aircraft to its Boeing 737-700 model, with the selection of the Boeing 737 MAX 7 aircraft. Southwest Airlines® and Boeing reached agreement on 100 firm orders for MAX 7 aircraft, with the first 30 scheduled to be delivered in 2022. This agreement underscores Southwest’s commitment to continued modernization of its fleet with more fuel-efficient and climate-friendly aircraft. It also positions Southwest to capitalize on growth opportunities, when they arise.

As part of the agreement, the Company also converted 70 MAX 8 firm orders to MAX 7 firm orders and added 155 MAX options for MAX 7 or MAX 8 aircraft for years 2022 through 2029. These order book additions and revisions result in a new total of 349 MAX firm orders (200 MAX 7 and 149 MAX 8) and 270 MAX options for MAX 7 or MAX 8 aircraft for years 2021 through 2031. The Company’s previous order book consisted of 249 MAX firm orders (30 MAX 7 and 219 MAX 8) and 115 MAX options for MAX 7 or MAX 8 aircraft for years 2021 through 2026. The Company continues to expect delivery of 28 MAX 8 aircraft in total this year (19 from Boeing and 9 from third-party lessors), as well as 17 737-700 retirements, ending 2021 with 69 MAX 8 aircraft and 729 total aircraft.

This announcement reinforces the Company’s confidence in the 737 MAX as the future of the Southwest fleet. This cost-effective order book with Boeing allows the Company to maintain the operational efficiencies of an all-Boeing 737 fleet to support its low-cost, point-to-point route network. The Company was the launch Customer of the MAX 8 and is scheduled to be the launch Customer of the MAX 7 after also launching prior 737 generations, including the -300, -500, and -700 series.

The Company expects more than half of the 737 MAX aircraft in its firm order book will replace a significant amount of its 462 737-700 aircraft over the next 10 to 15 years to support the modernization of its fleet, a key component of its environmental sustainability efforts. Southwest is proud of its fuel efficiency improvement of nearly 50 percent since 20002, and the billions of dollars in capital expenditures committed to the 737 MAX order book reinforces the airline’s commitment to further improve fuel efficiency and reduce carbon emissions.

The Company’s flight schedules are currently published and available for sale through August 16, 2021. The Company remains cautious in this uncertain environment where travel demand remains depressed due to the negative financial effects of the COVID-19 pandemic; as such, available seat mile (ASMs, or capacity) plans have not been refined beyond May 2021. The Company will continue to plan for multiple fleet and capacity scenarios; however, the refreshed 737 MAX order book and predominantly owned 737-700 fleet is intended to provide a high degree of flexibility for the Company to manage fleet retirements, growth opportunities, and capital spending in a variety of economic environments. Additional information regarding the Company’s delivery schedule is included in the accompanying table.

1

737 MAX 8 compared with the 737-800. MAX 7 is expected to produce comparable fuel efficiency improvement compared with the 737-700.

2

Measured as revenue ton miles per gallon from 2000 through 2019. A revenue ton mile is one ton of revenue traffic (passenger and cargo) transported one mile. See 2019 Southwest Airlines One Report for more information.

3

Net of progress payments made on undelivered MAX aircraft and previously agreed upon delivery credits provided by Boeing to the Company due to the settlement of 2020 estimated damages relating to the Federal Aviation Administration (FAA) grounding of the 737 MAX aircraft.

NEW 737 DELIVERY SCHEDULE

The Boeing Company

MAX 7

MAX 8

MAX 7 or 8

Additional

Firm Orders

Firm Orders

Options

MAX 8s

Total

2021

19

9

28

2022

30

42

72

2023

30

38

68

2024

30

40

70

2025

30

40

70

2026

15

15

40

70

2027

15

15

30

60

2028

15

15

30

60

2029

20

30

10

60

2030

15

45

60

2031

10

10

200

149

270

9

628

New 737 Delivery Schedule footnotes:

  1. The Company has flexibility to designate firm orders or options as MAX 7 or MAX 8, upon written advance notification as stated in the contract.
  2. The 9 additional MAX 8 aircraft shown above are leases to be acquired from various third parties. The Company also received 7 leased MAX 8 aircraft in fourth quarter 2020, for a total of 16 MAX 8 operating leased aircraft from third parties in 2020 and 2021, combined.

PREVIOUS 737 DELIVERY SCHEDULE

The Boeing Company

MAX 7

MAX 8

MAX 8

Additional

Firm Orders

Firm Orders

Options

MAX 8s

Total

2021

7

100

9

116

2022

27

14

41

2023

12

22

23

57

2024

11

30

23

64

2025

40

36

76

2026

19

19

30

219

115

9

373

Previous 737 Delivery Schedule footnote:

  1. The ‘Previous 737 Delivery Schedule’ shown above is for reference and comparative purposes only. It should no longer be relied upon. See ‘New 737 Delivery Schedule’ for the Company’s current aircraft order book.

 

Southwest Airlines returns to Costa Rica in June

Southwest Airlines Boeing 737-800 SSWL N8514F (msn 36975) PAE (Nick Dean). Image: 953136.

Southwest Airlines has announced a return of daily service to both international airports in Costa Rica: Liberia, Guanacaste (LIR), and the capital region, San Jose (SJO), beginning in June 2021.

DAILY SERVICE FROM HOUSTON (HOBBY) BEGINS JUNE 6, 2021
Southwest will resume daily nonstop service to Liberia, Guanacaste, Costa Rica (LIR), and San Jose, Costa Rica (SJO), on June 6, 2021.

SEASONAL SERVICE FROM BALTIMORE/WASHINGTON (BWI) BEGINS JUNE 12, 2021
The carrier will operate additional nonstop service for the summer season on Saturdays between Baltimore/Washington (BWI), and Liberia, Guanacaste, Costa Rica (LIR), beginning June 12, 2021.

Southwest Airlines is closely monitoring ongoing government restrictions for travel. Each state or country may require varying levels of documentation, testing, and potential verification of test results.

ADDITIONAL SERVICE IN DENVER, CHICAGO, ST. LOUIS, KANSAS CITY, AND ORANGE COUNTY/SANTA ANA
“New flights in our summer flight schedule also bring more Mile High Heart with additional nonstop service between Denver and the coasts—with new or returning links to Savannah/Hilton Head, Sarasota/Bradenton, Norfolk/Virginia Beach, and additional flights to Long Beach, Calif., and Seattle,” Watterson added. “We’re bringing more flights in both Chicago airports, and we continue to spread our love across the Midwest with new flights in St. Louis and Kansas City, both of which are now linked nonstop to Orange County/Santa Ana.”

OUR SOUTHWEST HEART CONTINUES TO GROW
In 2020, Southwest added new service to Hilo, Hawaii; Cozumel, Mexico; Miami; Palm Springs, Calif.; Steamboat Springs Colo.; and Montrose (Telluride/Crested Butte), Colo., continuing five decades of connecting Customers to the places and people they love. In 2021, Southwest began service to Chicago (O’Hare) and Sarasota/Bradenton, both on Feb. 14; Savannah/Hilton Head and Colorado Springs, both on March 11; Houston (Bush) and Santa Barbara, Calif., both on April 12; and Fresno, Calif., on April 25. Southwest will begin service to Destin/Fort Walton Beach on May 6; Myrtle Beach, S.C., on May 23; Bozeman, Mont., on May 27; Jackson, Miss., on June 6; and Eugene, Ore., on Aug. 29. The Company also has announced its intention to serve Bellingham, Wash., later this year.

On April 12, 2021 Southwest inaugurated service to Santa Barbara (below):

On April 25, 2021 Southwest inaugurated service to Fresno, California (below).

Top Copyright Photo: Southwest Airlines Boeing 737-800 SSWL N8514F (msn 36975) PAE (Nick Dean). Image: 953136.

Southwest aircraft slide show:

Southwest Airlines reports its first quarter 2021 financial results, reports on its fleet plans

Southwest Airlines Company today reported its first quarter 2021 financial results:

  • First quarter net income of $116 million, or $.19 per diluted share, driven by a $1.2 billion offset of salaries, wages, and benefits expenses from the extended Payroll Support Program (PSP Extension) proceeds under the Consolidated Appropriations Act, 2021
  • Excluding special items1, first quarter net loss of $1.0 billion, or $1.72 loss per diluted share
  • First quarter operating revenues of $2.1 billion, down 51.5 percent year-over-year
  • Ended first quarter with liquidity2 of $15.3 billion, well in excess of debt outstanding of $10.8 billion

Gary C. Kelly, Chairman of the Board and Chief Executive Officer, stated, “In first quarter, we benefited from temporary cost relief as a result of PSP Extension proceeds, which offset a portion of salaries, wages, and benefits expenses, resulting in first quarter 2021 net income of $116 million, or $.19 per diluted share. We remain grateful for this much-needed federal payroll support on the heels of substantial losses in 2020, and ongoing non-GAAP losses in first quarter 2021. The payroll support from the federal government has allowed Southwest to preserve its 50-year history without involuntary layoffs or furloughs, an achievement unprecedented in the U.S. airline industry. Excluding the benefit of PSP Extension proceeds and other special items, our first quarter 2021 net loss was $1.0 billion, or $1.72 loss per diluted share. While the pandemic is not over, we believe the worst is behind us, in terms of the severity of the negative impact on travel demand. Vaccinations are on the rise, and COVID-19 hospitalizations in the United States are down significantly from their peak in January 2021. As a result, we are experiencing steady weekly improvements in domestic leisure bookings, which began in mid-February 2021.

March 2021 operating revenues decreased 9.7 percent, year-over-year, and decreased 53.5 percent compared with March 2019, representing a significant improvement from relatively stagnant revenue levels experienced from September 2020 through February 2021. Our current outlook for operating revenues indicates a sequential improvement from March to April 2021, and again from April to May 2021, based on improving bookings. We believe there is significant pent-up demand for leisure travel and are optimistic about summer 2021. In response, we are in the process of adding flights in June 2021, and we currently expect June available seat miles (ASMs, or capacity) to be only slightly less than June 2019 pre-pandemic levels.

“We had a solid cost performance in first quarter 2021, despite recently rising jet fuel prices. Spending levels in many cost categories remained muted due to the pandemic. We expect capacity-driven year-over-year cost increases in second quarter 2021, most notably as we return parked aircraft to revenue service and recall a portion of our Pilots, Flight Attendants, and Ground Operations Employees from extended time-off to support increased flight levels planned for summer 2021. We currently expect second quarter 2021 operating expenses, excluding fuel and oil expense, special items, and profitsharing, to increase in the range of 10 to 15 percent, year-over-year, but remain below second quarter 2019 levels3.

“Our liquidity is strong, and we remain the only U.S. airline with an investment-grade credit rating by all three rating agencies. As of March 31, 2021, our total liquidity was $15.3 billion, consisting of cash and short-term investments of $14.3 billion and a fully available revolving credit facility of $1.0 billion. Average core cash burn4 was approximately $9 million per day in March 2021, and approximately $13 million per day in first quarter 2021. Including changes in working capital—most notably, cash flow from future bookings—average core cash flow turned positive in March 2021, and we generated approximately $4 million per day, as revenue and booking trends improved. Our average core cash burn in second quarter 2021 is currently estimated to be in the range of $2 million to $4 million per day. Based on current booking trends and cost outlook, we are hopeful we can achieve breakeven average core cash flow, or better, by June 2021.

Southwest Airlines Boeing 737-8 MAX 8 N8815L (msn 65473) BFI (Nick Dean). Image: 953374.

Above Copyright Photo: Southwest Airlines Boeing 737-8 MAX 8 N8815L (msn 65473) BFI (Nick Dean). Image: 953374.

We returned the Boeing 737 MAX (MAX) to revenue service on March 11, 2021. To return the MAX to service, we satisfied applicable Federal Aviation Administration (FAA) requirements by modifying certain operating procedures; implementing enhanced Pilot training requirements; installing FAA-approved flight control software updates; and completing other required maintenance tasks specific to MAX aircraft, as well as completing more than 200 readiness flights. Also in March 2021, as previously disclosed, we completed discussions with The Boeing Company (Boeing) regarding the restructuring of our delivery schedule for MAX aircraft, and added 100 firm orders for MAX 7 aircraft; converted 70 MAX 8 firm orders to MAX 7 firm orders; added 155 MAX options; and extended the order book through 2031. This cost-effective MAX order book allows us to maintain the operational efficiencies of an all-Boeing 737 fleet to support our low-cost, point-to-point route network; accelerate our commitment to fleet modernization with more climate-friendly aircraft; and capitalize on future growth opportunities.

“This year marks our 50th anniversary, and we celebrate what has made Southwest Airlines the most successful airline in the world—our Employees. We applaud our People for their unwavering focus on Hospitality, which has resulted in the U.S. airline industry’s top Customer Service ranking for 27 of the past 30 years5. Never has their resilience been more vital, as we work our way through the pandemic recovery while pursuing new airports and Customers.

“It is crucial that we continue managing our business prudently in the near-term, while also positioning ourselves to thrive and prosper, once again. We are increasingly optimistic about our future, and we are in the process of updating our strategic plan with a clear set of initiatives for the next five years. Among these initiatives are the aggressive expansion of our route network, having opened or announced 17 new airports since the pandemic began; the launch of Global Distribution System (GDS) access for corporate travelers; the acceleration of fleet modernization efforts to replace our 737-700 aircraft with the MAX; and the development of tangible steps that are aimed at improving upon our environmental stewardship and supporting our environmental sustainability goal to be carbon neutral by 2050. Being a good steward of the environment is not only good for our Planet, it is good for business, and it is the right thing to do for our Employees, Customers, and Shareholders.”

Revenue Results and Outlook
The Company’s first quarter 2021 operating revenues decreased 51.5 percent, year-over-year, to $2.1 billion, as a result of negative impacts to passenger demand and bookings due to the pandemic. First quarter 2021 operating revenue per ASM (RASM, or unit revenues) was 8.86 cents, a decrease of 26.0 percent, primarily driven by a passenger revenue yield decrease of 28.4 percent and a load factor decline of 3.4 points, all year-over-year.

The Company began first quarter 2021 experiencing stalled demand and bookings in January, driven by a high level of COVID-19 cases, coupled with typical seasonal weakness. In mid-February 2021, the Company began experiencing a modest improvement in leisure passenger demand and bookings that accelerated in March 2021. Passenger fares improved throughout March as close-in leisure demand held steady. Beach and other nature-inspired destinations continued to outperform other regions in first quarter 2021. Beginning in March 2021, demand improvement was system-wide.

The following table presents selected revenue and load factor results for first quarter 2021:

January 2021

February 2021

March 2021

1Q 2021

Operating revenue year-over-year

Down 65.5%

Down 65.7%

Down 9.7%

Down 51.5%

Previous estimation

Down ~66%

Down ~66%

Down 15% to 20%

(a)

Operating revenue compared with 2019

Down 65.1%

Down 64.0%

Down 53.5%

Down 60.1%

Previous estimation

Down ~65%

Down ~64%

Down 55% to 60%

(a)

Load factor

53.4%

63.9%

72.7%

64.3%

Previous estimation

~53%

~64%

65% to 70%

(a)

(a) No previous estimation provided.

Thus far, the Company continues to experience improvements in leisure passenger demand and bookings for April and May 2021 travel, with expectations of improving passenger traffic and fares compared with March 2021. The Company continues to experience an increase in bookings farther out on the booking curve, with approximately 35 percent and 20 percent of anticipated bookings currently in place for June and July, respectively. These represent fairly typical future booking patterns; however, business travel continues to significantly lag leisure and is expected to have a significant negative impact on close-in demand and average passenger fares.

The following monthly table presents selected preliminary estimates of revenue and load factor for April and May 2021:

Estimated
April 2021

Estimated
May 2021

Operating revenue compared with 2019 (a)

Down 40% to 45%

Down 35% to 40%

Previous estimation

Down 45% to 55%

(b)

Load factor

75% to 80%

75% to 80%

Previous estimation

70% to 75%

(b)

(a) The Company believes that operating revenues compared with 2019 is a more relevant measure of performance than a year-over-year comparison due to the significant impacts in 2020 due to the pandemic.

(b) No previous estimation provided.

The Company achieved its goal of accepting corporate travel bookings in 2020 with Amadeus’s GDS platform and Travelport’s multiple GDS platforms: Apollo, Worldspan, and Galileo. In December 2020, the Company reached a full-participation GDS agreement with Sabre, anticipated to go live by Labor Day 2021. The Company also has an agreement with Airlines Reporting Corporation (ARC) to implement industry-standard processes to handle the settlement of tickets booked through Travelport and Amadeus channels. Once the new Sabre GDS connectivity is implemented, Sabre tickets are also expected to settle via ARC. The Company’s enhancement of its GDS channel strategy complements its expansion of direct connect via Airline Tariff Publishing Company’s (ATPCO) New Distribution Capability (NDC) Exchange and existing SWABIZ® options, with the goal of distributing its everyday low fares to more corporate travelers through their preferred channel.

Cost Performance and Outlook
First quarter 2021 total operating expenses decreased 57.3 percent, year-over-year, to $1.9 billion. Excluding special items, first quarter 2021 operating expenses decreased 23.5 percent, year-over-year, to $3.3 billion. Total operating expenses per ASM (CASM, or unit costs) decreased 34.9 percent, compared with first quarter 2020. Excluding special items, first quarter 2021 CASM increased 16.7 percent, year-over-year.

The following table presents economic fuel costs per gallon1, including the impact of fuel hedging premium expense and fuel derivative contracts, for first quarter 2021 and the prior year period:

First Quarter

2021

2020

Economic fuel costs per gallon

$1.70

$1.90

Fuel hedging premium expense

$25 million

$24 million

Fuel hedging premium expense per gallon

$0.09

$0.05

Fuel hedging cash settlement gains per gallon

$0.01

The Company continued to operate fewer of its oldest, least fuel-efficient Boeing 737-700 aircraft as a result of capacity reductions due to the pandemic, which resulted in a year-over-year improvement of 4.7 percent in ASMs per gallon (fuel efficiency) in first quarter 2021. While the Company expects to return more of its 737-700 aircraft to service to support planned capacity increases, second quarter 2021 fuel efficiency is currently estimated to be sequentially in line with first quarter 2021, on a nominal basis, also taking into account the return of its most fuel-efficient aircraft, the MAX, to service in March 2021.

Based on the Company’s existing fuel derivative contracts and market prices as of April 15, 2021, the following table presents estimates of economic fuel costs per gallon6, including the estimated impact of fuel hedging premium expense and fuel derivative contracts, for second quarter and annual 2021 and prior year periods:

Second Quarter

Full Year

2021

2020

2021

2020

Economic fuel costs per gallon

$1.85 to $1.95

$1.33

$1.85 to $1.95

$1.49

Fuel hedging premium expense

$25 million

$24 million

$100 million

$98 million

Fuel hedging premium expense per gallon

$0.06

$0.12

(a)

$0.08

Fuel hedging cash settlement gains per gallon

$0.01

(a) Due to continued uncertainty regarding available seat mile plans for annual 2021, the Company cannot reasonably provide an estimate for its full year 2021 fuel hedging premium expense per gallon.

As of April 15, 2021, the fair market value of the Company’s fuel derivative contracts for the remainder of 2021 was an asset of approximately $44 million, and the fair market value of the fuel hedge portfolio settling in 2022 and beyond was an asset of approximately $267 million. Additional information regarding the Company’s fuel derivative contracts is included in the accompanying tables.

Excluding fuel and oil expense, first quarter 2021 operating expenses decreased 60.2 percent, compared with first quarter 2020. The Company accrued $24 million of profitsharing expense in first quarter 2021, compared with no profitsharing accrual in first quarter 2020. The Company’s first quarter 2021 net income included special items, the largest of which was a net benefit of approximately $1.4 billion. This pre-tax benefit was comprised of approximately $1.2 billion in PSP Extension proceeds; $116 million related to the Employee Retention Tax Credit under the Coronavirus Aid, Relief, and Economic Security Act; and $115 million due to the reversal of a portion of the Company’s previous accrual related to the costs for Employees who accepted the Company’s offer to participate in its voluntary extended leave program. Due to increasing passenger demand and bookings, the Company plans to increase flight activity in summer 2021—by approximately 25 points of capacity from March to June 2021, compared with respective 2019 levels—which has prompted the early recall of a portion of the Employees who elected this program. The Company now estimates annual 2021 cost savings from voluntary separation and extended leave programs to be in the range of $1.1 billion to $1.2 billion compared with annual 2019, as compared with its previous estimation of approximately $1.2 billion.

Excluding fuel and oil expense, special items, and profitsharing, first quarter 2021 operating expenses decreased 19.1 percent, compared with first quarter 2020, which represented the favorable end of the Company’s guidance range. The significant year-over-year decrease primarily was driven by the decline in variable, flight-driven expenses, such as salaries, wages, and benefits; maintenance expense; and landing fees; combined with the Company’s continued focus on cost management. As expected, the Company realized approximately $412 million of cost savings in first quarter 2021 from voluntary separation and extended leave programs. On a unit basis, first quarter 2021 operating expenses, excluding fuel and oil expense, special items, and profitsharing expense, increased 23.4 percent, year-over-year, primarily driven by the significant reduction in capacity.

Excluding fuel and oil expense, special items, and profitsharing, second quarter 2021 operating expenses are expected to increase in the range of 10 to 15 percent, year-over-year3, which includes an estimated $325 million of salaries, wages, and benefits cost savings from voluntary separation and extended leave programs. Second quarter 2021 operating expenses, excluding fuel and oil expense, special items, and profitsharing, are also expected to increase compared with first quarter 2021, with 60 to 70 percent of the sequential increase attributable to variable, flight-driven expenses as capacity is expected to increase to near-2019 levels by June 2021. These variable, flight-driven cost increases are primarily in salaries, wages, and benefits due to staffing increases; maintenance expense to return aircraft to revenue service, along with higher flight-driven maintenance expenses as flight levels increase; landing fees; and personnel, passenger, and revenue-related costs. In addition, the Company is experiencing cost increases primarily due to airport cost inflation; higher aircraft ownership costs due to MAX deliveries; and certain favorable tax and insurance settlements realized in first quarter 2021 operating expenses that are non-recurring in second quarter 2021. Despite increasing capacity and operating expenses, both sequentially and year-over-year, second quarter 2021 operating expenses are estimated to remain below second quarter 2019 levels.

Other expenses in first quarter 2021 increased by $19 million, year-over-year, primarily due to an increase in interest expense driven by new debt issued during 2020, and lower interest income as a result of lower interest rates.

The Company’s first quarter 2021 effective tax rate was 21 percent, and the Company currently estimates its annual 2021 effective tax rate to be approximately 23 percent.

Liquidity and Capital Deployment
As of March 31, 2021, the Company had approximately $14.3 billion in cash and short-term investments, and a fully available revolving secured credit facility of $1.0 billion. The Company currently has unencumbered assets with an estimated value of more than $11 billion, including aircraft value estimated in the range of $9 billion to $10 billion, and approximately $2 billion in non-aircraft assets such as spare engines, ground equipment, and real estate. In addition to the value from aircraft and other physical assets, the Company has significant value from its Rapid Rewards® loyalty program. As of April 21, 2021, the Company’s cash and short-term investments remained at approximately $14.3 billion.

Net cash provided by operations during first quarter 2021 was $645 million, primarily driven by PSP Extension proceeds. First quarter 2021 capital expenditures were $95 million. The Company estimates its 2021 capital expenditures to be approximately $500 million, primarily driven by technology, facilities, and operational investments. Based on the Company’s recently completed aircraft purchase agreement with Boeing, the Company estimates its total contractual aircraft capital expenditures for all years 2021 through 2026, which are associated with 169 MAX firm orders (135 MAX 7 and 34 MAX 8 aircraft), to be approximately $5.1 billion. The Company currently estimates approximately $700 million of aircraft capital expenditures in 2022, based on firm orders. The Company has not finalized its 2022 fleet or capital investment plans.

During first quarter 2021, the Company reached an agreement with the U.S. Department of Treasury (Treasury) and received approximately $1.7 billion in PSP Extension proceeds under the Consolidated Appropriations Act, 2021. The Company soon expects to receive approximately $259 million as its final distribution pursuant to the PSP Extension, for a total of approximately $2.0 billion of proceeds under this program. In addition, the Company soon expects to reach agreement with Treasury to receive approximately $1.9 billion in payroll support proceeds under the American Rescue Plan Act of 2021 (PSP 3) in return for providing consideration to Treasury in the form of a promissory note and warrants. The Company intends to disclose additional details regarding PSP 3 after the agreement with Treasury is finalized.

As of March 31, 2021, the Company had current and non-current debt obligations that totaled $10.8 billion. The Company repaid approximately $67 million in debt and finance lease obligations during first quarter 2021 and is scheduled to repay approximately $153 million more in debt and finance lease obligations in 2021. Based on current debt outstanding and current market interest rates, the Company expects second quarter 2021 interest expense to be approximately $115 million. As of March 31, 2021, the Company was in a net cash position7 of $3.6 billion, and its adjusted debt8 to invested capital (leverage) was 57 percent.

Fleet and Capacity
The Company ended first quarter 2021 with 730 aircraft in its fleet, including 61 MAX 8 aircraft. During first quarter 2021, the Company took delivery of 20 MAX 8 aircraft, comprised of 12 owned and 8 leased aircraft. The Company expects delivery of eight more MAX 8 aircraft in 2021. Also during first quarter 2021, the Company returned eight leased 737-700 aircraft to lessors and expects to retire up to nine more 737-700 aircraft in 2021. In response to capacity reductions due to the effects of the pandemic, 59 737-700 aircraft were in temporary storage as of March 31, 2021. In April, the Company also removed 32 of its MAX 8 aircraft from service due to a Boeing production issue related to the electrical power system on a subset of MAX aircraft. Upon learning of the issue, the Company immediately removed these aircraft from service, out of an abundance of caution, and is currently awaiting more guidance from Boeing and the FAA regarding the appropriate corrective actions. The Company is in the process of returning its stored 737-700 aircraft to revenue service to support flight schedules in summer 2021 and beyond.

The Company’s order book with Boeing includes a total of 349 MAX firm orders (200 MAX 7 and 149 MAX 8) and 270 MAX options (MAX 7 or MAX 8) for years 2021 through 2031. Additional information regarding the Company’s aircraft delivery schedule is included in the accompanying tables.

The Company’s first quarter 2021 capacity decreased 34.5 percent, year-over-year, in line with the Company’s guidance, due to capacity reductions in light of the decrease in passenger demand and bookings as a result of the pandemic. The following table presents capacity results for first quarter 2021:

January 2021

February 2021

March 2021

1Q 2021

ASMs year-over-year

Down 40.4%

Down 48.3%

Down 14.3%

Down 34.5%

Previous estimation

Down ~40%

Down ~48%

Down ~14%

Down ~35%

ASMs compared with 2019

Down 42.1%

Down 47.4%

Down 29.0%

Down 38.9%

Previous estimation

Down ~42%

Down ~47%

Down ~28%

Down ~38%

The Company estimates its second quarter 2021 capacity to increase approximately 90 percent, year-over-year, and decrease approximately 15 percent as compared with 2019, driven by improving passenger demand and bookings. The following table presents capacity estimates for second quarter 2021:

Estimated
April 2021

Estimated
May 2021

Estimated
June 2021

Estimated
2Q 2021

ASMs year-over-year

Up ~83%

Up ~127%

Up ~70%

Up ~90%

Previous estimation

(a)

Up ~118%

(b)

(b)

ASMs compared with 2019

Down ~24%

Down ~18%

Down ~4%

Down ~15%

Previous estimation

(a)

Down ~21%

(b)

(b)

(a) Remains unchanged from the previously provided estimation.

(b) No previous estimation provided.

Passenger demand and booking trends remain primarily leisure-oriented and inconsistent by region. Despite recent improvements in leisure demand, the Company remains cautious in this uncertain environment and continues to plan for multiple fleet and capacity scenarios. The Company will continue to monitor demand and booking trends and adjust capacity, as needed. As such, the Company’s actual flown capacity may differ materially from currently published flight schedules or current estimations.

Southwest Airlines aircraft slide show:

Southwest Airlines continues its dedication to the environment through sustainable aviation fuel initiatives

Will become N8814K

Southwest Airlines announced today its ongoing support of the U.S. Department of Energy’s National Renewable Energy Laboratory (NREL) to develop commercially viable and scalable sustainable aviation fuel (SAF).

Southwest® has undertaken multiple efforts over the years to minimize its carbon footprint and the Company continues to seek opportunities to help mitigate emissions. NREL presents one of those opportunities, as Southwest intends to continue to support NREL’s work to develop low-carbon, low-cost, high-performance aviation fuels created from wet waste. Southwest plans to work with NREL to bridge a gap between the science behind SAF and the application of these sustainable fuels on a commercial level.

“We recognize the important role SAF will play in Southwest’s journey to achieve carbon neutrality by 2050—a goal we’re dedicated to reaching,” said Stacy Malphurs, Vice President of Supply Chain Management & Environmental Sustainability. “By working with organizations like NREL, Southwest embraces a great opportunity to advance the crucial science that makes this technology possible, and more available. We’re excited to work with NREL toward commercially-viable SAF.”

According to NREL, its analysis quantifies that U.S. wet waste, including food waste, could produce enough energy content to cover about 20% of U.S. jet fuel consumption. Conventional jet fuel is a primary source of greenhouse gas emissions in the aviation industry—showing the value of creating low carbon or carbon-negative SAF (on a lifecycle carbon assessment basis) from low-cost wet waste is a step toward one day reducing reliance on traditional jet fuel.

NREL has demonstrated how to make SAF from wet waste that is compatible with existing jet engines,” said NREL scientist Derek Vardon. “It has the potential for a carbon negative footprint when diverting food waste from landfills.”

As a leading global citizen, Southwest remains dedicated to doing the right thing for its People, through its Performance, and in service to the Planet. Southwest recognizes conservation can be more impactful when we all work together for a more sustainable future.

Video:

Top Copyright Photo: Southwest Airlines Boeing 737-8 MAX 8 N1781B (N8814K) (msn 42664) BFI (Nick Dean). Image: 953456.

Southwest Airlines aircraft slide show:

 

Southwest Airlines to begin service to Eugene, Oregon on August 29, 2021

Will become N8814K

Southwest Airlines today published an initial flight schedule for Eugene Airport (EUG) in Oregon, bringing the airline’s low fares, flexible policies, and Hospitality closer to more outdoor attractions in the Pacific Northwest. Southwest Airlines® will offer nonstop, roundtrip service once daily to Las Vegas and twice daily to Oakland in the Bay Area, bringing additional same-plane or connecting roundtrip service daily between Eugene and more than 30 airports across the Southwest route map.

New destinations recently added:

 

Beginning August 29, 2021, Southwest will commence service to a second city in Oregon, having served Portland since 1994.

Fly nonstop between
Eugene, Ore. and:

Initial flight schedule (roundtrip service, nonstop):

One-way fares as low as*:

Las Vegas

Once daily

$49

Oakland

Twice daily

$39

*The number of seats, days, and markets for these fares are limited.

Top Copyright Photo: Southwest Airlines Boeing 737-8 MAX 8 N1781B (N8814K) (msn 42664) BFI (Nick Dean). Image: 953456.

Southwest Airlines aircraft slide show:

Boeing recommends operators of some 737 MAX airplanes temporarily remove them from service to address a potential electrical issue

Boeing has issued a recommendation to 16 customers (including American, Southwest and United) to remove and inspect certain Boeing 737 MAX aircraft due to a “potential electrical issue”. This is apparently due to a production issue when the aircraft were built.

The FAA issued this statement:

Boeing recommends operators of some 737 MAX airplanes temporarily remove them from service to address a potential electrical issue. The FAA will ensure the issue is addressed. Passengers should contact airlines about possible flight delays and cancellations.

Boeing issued this statement:

Boeing has recommended to 16 customers that they address a potential electrical issue in a specific group of 737 MAX airplanes prior to further operations. The recommendation is being made to allow for verification that a sufficient ground path exists for a component of the electrical power system.

We are working closely with the U.S. Federal Aviation Administration on this production issue. We are also informing our customers of specific tail numbers affected and we will provide direction on appropriate corrective actions.

American Airlines has grounded 17 MAX aircraft.

American Airlines Boeing 737-8 MAX 8 N378SC (msn 44471) BFI (Joe G. Walker). Image: 952213.

Above Copyright Photo: American Airlines Boeing 737-8 MAX 8 N378SC (msn 44471) BFI (Joe G. Walker). Image: 952213.

Southwest Airlines has removed 30 of its 58 MAX aircraft for inspections.

Southwest Airlines Boeing 737-8 MAX 8 N8701Q (msn 42554) PAE (Nick Dean). Image: 953439.

Above Copyright Photo: Southwest Airlines Boeing 737-8 MAX 8 N8701Q (msn 42554) PAE (Nick Dean). Image: 953439.

United Airlines has grounded 16 of its 30 MAX aircraft according to USA Today.

United Airlines Boeing 737-9 MAX 9 N1780B (N27520) (msn 64499) PAE (Nick Dean). Image: 951068.

Above Copyright Photo: United Airlines Boeing 737-9 MAX 9 N1780B (N27520) (msn 64499) PAE (Nick Dean). Image: 951068.

Southwest Airlines is now offering pre-cleared arrival into Hawaii

Southwest Airlines has introduced an added convenience for Customers flying to Hawaii on Southwest Airlines®—an ability to present evidence of their compliance with the Hawaii Safe Travels program. Customers who have uploaded an approved negative COVID-19 test result, required travel information, and completed a health questionnaire before departing the mainland may be eligible to bypass airport screening when arriving in Honolulu (Oahu) and Kahului (Maui). This pre-clear convenience complements the carrier’s approach to serving Hawaii with industry-leading value, comfort, and Hospitality, and pairs access of pre-trip testing options in select California cities with a streamlined arrival into the Islands.

Southwest Airlines is a Trusted Travel Partner of the State of Hawaii. The program allows visitors and returning residents to bypass a mandatory 10-day quarantine on arrival provided they have met key requirements of the program and have correctly uploaded these items into a traveler profile on the State of Hawaii website:

  • Updated and complete travel information including flight details for the initial flight segment into Hawaii, all lodging details for each traveler aged 18 or older (with younger travelers included in the profile of one parent);
  • A valid, negative COVID-19 test result for each passenger, taken within 72 hours of departure for Hawaii, obtained from a State-of-Hawaii-approved Trusted Travel Partner; and,
  • A mandatory health questionnaire within the Safe Travels account.

Southwest® Customer Service Agents now are available starting 90 minutes prior to departure to confirm Customers’ State-of-Hawaii-approved profile. Completing this verification at a gate before departure allows a faster arrival on-island. Southwest is offering the new service to Customers either starting their journey or connecting in the five California airports from which it offers nonstop service to the Hawaiian Islands—Oakland; San Jose, Calif.; Sacramento; San Diego; and Long Beach, Calif. The State of Hawaii reserves the right to re-screen or validate the screening of any passenger.

Visit Southwest.com/coronavirus/Hawaii to learn more about the requirements, procedures, and pre-departure testing options that uniquely complement the value of Southwest.

With the addition this month of Long Beach as a gateway with daily service to Hawaii (nonstop to both Honolulu (Oahu), and Kahului (Maui)), Southwest aircraft currently are scheduled to takeoff for Hawaii 14 times a day from a total of five gateway airports in California. In addition, nonstop service between Lihue (Kauai), and the Bay Area (Oakland and San Jose) is scheduled to resume June 6, 2021. Southwest Airlines also operates 24 departures a day to offer interisland service within the State of Hawaii. Southwest’s Hawaii service on Boeing 737-800 aircraft features spacious seating for 175 Customers.

Southwest Airlines adds 100 firm orders for the Boeing 737-7 MAX 7

 

Southwest Airlines announced today the completion of its previously disclosed discussions with The Boeing Company (Boeing) regarding the restructuring of its delivery schedule for MAX aircraft. The Company has completed the multi-year evaluation of the successor aircraft to its Boeing 737-700 model, with the selection of the Boeing 737 MAX 7 aircraft.

Southwest Airlines® and Boeing reached agreement on 100 firm orders for MAX 7 aircraft, with the first 30 scheduled to be delivered in 2022.

As part of the agreement, the Company also converted 70 MAX 8 firm orders to MAX 7 firm orders and added 155 MAX options for MAX 7 or MAX 8 aircraft for years 2022 through 2029.

These order book additions and revisions result in a new total of 349 MAX firm orders (200 MAX 7 and 149 MAX 8) and 270 MAX options for MAX 7 or MAX 8 aircraft for years 2021 through 2031. The Company’s previous order book consisted of 249 MAX firm orders (30 MAX 7 and 219 MAX 8) and 115 MAX options for MAX 7 or MAX 8 aircraft for years 2021 through 2026. The Company continues to expect delivery of 28 MAX 8 aircraft in total this year (19 from Boeing and 9 from third-party lessors), as well as 17 737-700 retirements, ending 2021 with 69 MAX 8 aircraft and 729 total aircraft.

Today’s announcement reinforces the Company’s confidence in the 737 MAX as the future of the Southwest fleet. This cost-effective order book with Boeing allows the Company to maintain the operational efficiencies of an all-Boeing 737 fleet to support its low-cost, point-to-point route network. The Company was the launch Customer of the MAX 8 and is scheduled to be the launch Customer of the MAX 7 after also launching prior 737 generations, including the -300, -500, and -700 series.

The Company expects more than half of the 737 MAX aircraft in its firm order book will replace a significant amount of its 462 737-700 aircraft over the next 10 to 15 years to support the modernization of its fleet, a key component of its environmental sustainability efforts. Southwest is proud of its fuel efficiency improvement of nearly 50 percent since 20002, and the billions of dollars in capital expenditures committed to the 737 MAX order book reinforces the airline’s commitment to further improve fuel efficiency and reduce carbon emissions.

“We remain diligent in managing costs and capital spending, in particular in this environment. Our refreshed order book with Boeing allows Southwest to preserve the low-cost advantages of a single fleet type, and the balance of firm orders and options—along with flexibility with 737-700 retirement plans—allows the opportunity to manage our fleet needs over the next decade,” said Tammy Romo, Executive Vice President and Chief Financial Officer. “We now estimate contractual aircraft capital spending for all years 2021 through 2026, which consists of 169 MAX firm orders with Boeing (135 MAX 7 and 34 MAX 8 aircraft), to be approximately $5.1 billion. Our estimated contractual aircraft capital spending remains immaterial in 2021, and is expected to be approximately $700 million in 20223. We continue to estimate 2021 capital expenditures to be no more than $500 million, driven primarily by technology, facilities, and operational investments.”

The Company’s flight schedules are currently published and available for sale through August 16, 2021. The Company remains cautious in this uncertain environment where travel demand remains depressed due to the negative financial effects of the COVID-19 pandemic; as such, available seat mile (ASMs, or capacity) plans have not been refined beyond May 2021. The Company will continue to plan for multiple fleet and capacity scenarios; however, the refreshed 737 MAX order book and predominantly owned 737-700 fleet is intended to provide a high degree of flexibility for the Company to manage fleet retirements, growth opportunities, and capital spending in a variety of economic environments. Additional information regarding the Company’s delivery schedule is included in the accompanying table.

1. 737 MAX 8 compared with the 737-800. MAX 7 is expected to produce comparable fuel efficiency improvement compared with the 737-700.
2. Measured as revenue ton miles per gallon from 2000 through 2019. A revenue ton mile is one ton of revenue traffic (passenger and cargo) transported one mile. See 2019 Southwest Airlines One Report for more information.
3. Net of progress payments made on undelivered MAX aircraft and previously agreed upon delivery credits provided by Boeing to the Company due to the settlement of 2020 estimated damages relating to the Federal Aviation Administration ( FAA) grounding of the 737 MAX aircraft.

NEW 737 DELIVERY SCHEDULE

The Boeing Company

MAX 7

MAX 8

MAX 7 or 8

Additional

Firm Orders

Firm Orders

Options

MAX 8s

Total

2021

19

9

28

2022

30

42

72

2023

30

38

68

2024

30

40

70

2025

30

40

70

2026

15

15

40

70

2027

15

15

30

60

2028

15

15

30

60

2029

20

30

10

60

2030

15

45

60

2031

10

10

200

149

270

9

628

New 737 Delivery Schedule footnotes:

  1. The Company has flexibility to designate firm orders or options as MAX 7 or MAX 8, upon written advance notification as stated in the contract.
  2. The 9 additional MAX 8 aircraft shown above are leases to be acquired from various third parties. The Company also received 7 leased MAX 8 aircraft in fourth quarter 2020, for a total of 16 MAX 8 operating leased aircraft from third parties in 2020 and 2021, combined.

PREVIOUS 737 DELIVERY SCHEDULE

The Boeing Company

MAX 7

MAX 8

MAX 8

Additional

Firm Orders

Firm Orders

Options

MAX 8s

Total

2021

7

100

9

116

2022

27

14

41

2023

12

22

23

57

2024

11

30

23

64

2025

40

36

76

2026

19

19

30

219

115

9

373

Previous 737 Delivery Schedule footnote:

  1. The ‘Previous 737 Delivery Schedule’ shown above is for reference and comparative purposes only. It should no longer be relied upon. See ‘New 737 Delivery Schedule’ for the Company’s current aircraft order book.

In other news, Southwest will add new service at Myrtle Beach International Airport (MYR) beginning May 23, 2021.

Within the first week of service: Baltimore/Washington (BWI)Chicago (Midway), and Nashville; and additional nonstop service from Dallas (Love Field) and Pittsburgh will operate on Saturdays beginning May 29. A third wave of service to this stretch of the South Carolina coast will bring options to fly with Southwest nonstop from AtlantaColumbus, and Indianapolis beginning June 6, 2021.