Southwest Airlines puts 737-800s up for sale again
September 27, 2024
Southwest Airlines' modest capacity-growth plans for the next few years have prompted it to put its Boeing 737-800s back on the market and take advantage of "attractive pricing" for those aircraft. The US carrier disclosed during a presentation to investors on 26 September that it intends to raise capacity annually 1-2% from 2025 through 2027 – one of a series of steps it is taking to improve its financial performance. Southwest increased its capacity this year by 4% versus 2023, it says. "We have access to nearly 700 aircraft at the end of 2031 at attractive pricing, which is more than we need if we assume a steady growth rate of 1-2%," said Southwest finance chief Tammy Romo on 26 September. "While our discussions with Boeing are ongoing to restructure our orderbook to align with our growth plans, we have a unique opportunity to capture value in our earnings on excess aircraft we do not need with our moderate growth plans." Southwest is pursuing direct sales of its 737-800s, Romo says, adding: "We are also looking at sale-leasebacks, where we can be opportunistic." The Dallas-based carrier's 737NG fleet is comprised of 205 737-800s and 382 737-700s. In March, Southwest was looking to sell a portion of its 737-800 fleet and had mandated SkyWorks to run the sale. However, it put the sale on ice later in the year amid reduced Max delivery expectations. The recent machinists' strike that has led to a total shutdown of all aircraft production at Boeing – and 737 Max jets in particular – will likely further increase the reliance of 737 operators on the older jets, in addition to driving up the value of those aircraft. In August, Ascend Consultancy put the half-life market value of 13-year-old 737-800s – that being the average age of in-service or stored aircraft of that model – at $20.6 million, up from $17 million in August 2023. "The combination of a favourable secondary market and our attractive aircraft pricing provides a unique opportunity to significantly reduce our aircraft capex and drive earnings accretion," Romo says. "We will be opportunistic in the market where it makes sense." Southwest's fleet renewal plan rests on its assumption that it will be able to retire all of its 737NGs by the end of 2031, at which point it would operate a fleet comprised entirely of Max 7 and Max 8 jets with an average age of five years. "Our fleet modernisation efforts are dynamic as it depends on Boeing's production levels and supportive market economics," Romo says.
Hawaiian installs Starlink wi-fi on A330s
September 26, 2024
Hawaiian Airlines has completed installation of Starlink wi-fi service across its fleet of 24 Airbus A330s. The Honolulu-based carrier says it is offering the wi-fi service free of charge to its passengers on all Airbus flights between the islands and the continental USA, Asia and Oceania. The carrier also plans to install Starlink on its Boeing 787-9 fleet, but not on its 717s used for short flights between the islands. "Becoming the first major airline to offer travellers Starlink at no cost is a remarkable achievement for our team, and we couldn't be more pleased with the overwhelmingly positive response from guests who have been enjoying our industry-leading connectivity onboard," states Evan Nomura, director of in-flight entertainment and connectivity and onboard products at Hawaiian Airlines. Starlink is operated by Starlink Services, a wholly owned subsidiary of SpaceX, which was founded by billionaire Elon Musk.
Southwest Airlines to shrink Atlanta operation
September 26, 2024
US carrier Southwest Airlines intends to reduce the number of flights connecting with Atlanta's primary airport, as well as the staff size supporting its operation in that city in Georgia. Dallas-based Southwest says that booking patterns for flights involving Hartsfield-Jackson International airport do not support continuing its level of service. Southwest is set to operate 5,077 flights to and from Atlanta in October, the second-highest flight total among all carriers offering flights connecting with that city. Delta Air Lines has scheduled 51,119 flights connecting with Atlanta in October, while Frontier Airlines is set to operate 2,318 such flights that month. Fewer staff will be needed to operate its reduced schedule in Atlanta, Southwest notes, adding that changes to its schedule will not be enacted for at least six months. All affected employees will be given an opportunity to transfer stations, it adds. Southwest says that a scarcity of available aircraft has been "a driving force" in its decision to reduce its Atlanta operation. The all-Boeing 737 carrier is notably exposed to the US airframer's production woes, which have worsened with the strike called by its machinists this month. "We continue to optimise our network to meet customer demand, best utilise our fleet, and maximise revenue opportunities," Southwest says. "Decisions like these are difficult for our company because of the effects on our people, but we have a history of more than 53 years of ensuring they are taken care of." It notes that while it is "drawing down some in Atlanta", it is in April adding service in Nashville, with new routes connecting with Albuquerque, New Mexico; Albany, New York; Jackson, Mississippi; Memphis, Tennessee; Providence, Rhode Island; and Tulsa, Oklahoma.