Southwest Airlines operates an all-Boeing fleet. In 3Q14, out of the 685 aircraft operated by Southwest, the majority were Boeing 737-700 aircraft.
The company’s fleet plan is to replace 717-200, Classic 737-300, and 737-500 with next generation 737-700 and 737-800 aircraft. This will increase overall fuel efficiency and lower the airline’s repair and maintenance expenses.
Future plans
During the quarter, Southwest took delivery of eleven 737-800 aircraft and two 737-700 aircraft. It plans to take delivery of an additional eight 737-800 and eleven 737-700 aircraft in the fourth quarter.
Southwest retired one Boeing 737-500 during the quarter and plans to retire three more Classic aircraft—737-300 and 737-500—in the fourth quarter. Southwest expects its 4Q14 available seat miles (or ASMs) to increase by 2% to 3% year-over-year. But the full-year 2014 ASMs will increase by less than 1%. By the end of 2015, the plan is to keep the fleet relatively constant with 695 aircraft.
Leasing B717 aircraft to Delta
Southwest decided to lease all of its 88 AirTran’s Boeing 717-200 aircraft to Delta because they were adding complexity to its all-Boeing 737 operations. Southwest removed a total of ten Boeing 717-200s during the quarter.
By the end of the third quarter, 51 of the 88 Boeing 717 aircraft were removed from the fleet, and 45 of these were delivered to Delta. The company also converted 34 of the 52 AirTran 737-700 aircraft, while the remainder will be converted by the end of the year.
Low-cost carriers such as Southwest and JetBlue operate fewer aircraft types than do legacy carriers.
Southwest’s single fleet strategy has helped it maintain is low-cost competitive advantage by reducing maintenance and training costs.
In 2013, Southwest operated 680 aircraft all Boeing. JetBlue Airways operated 194 aircraft, Delta Air Lines operated 1,275, United Continental 1,265, and American Airlines operated 1,511 aircraft.
(Teresa Cederholm - Market Realist)
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