Boeing delays forcing Southwest to consider merger options says pilot union
The head of Southwest Airlines’ pilot union is becoming increasingly concerned over what he has described as “troubling cracks in the carrier’s operating metrics”. As a result, the leader has announced that he approved a plan to prepare his union members should the Southwest board decide to tackle the ongoing issues it is dealing with exploring the possibility of acquiring another US airline.
In an internal letter issued to union members on March 16, 2024, Southwest Airlines Pilots Association (SWAPA) President Casey Murray cites the ongoing delays in the certification of the Boeing 737 MAX 7 for much of the airline’s issues. Murray believes that as a result of the delays in this process, the low-cost carrier has become too reliant on the larger 737 MAX 8 variant, which he says has too many seats for many of the routes that Southwest operates.
As a result of this mismatch in demand and supply, Murray believes that Southwest is being forced to operate too many flights at less-than-optimal load factors which is adversely impacting the airline’s financial position.
As the carrier has almost entirely remained a Boeing 737 operator throughout its 57-year existence (it operated a small number of 727s in the early 1980s), it may be that the Southwest board could resort to the acquisition of another US airline to solve its fleet issues in the short to medium term, according to Murray.
Murray adds that Southwest’s over-reliance on the Boeing 737 range brings “a level of risk” to the company, adding that recent events involving the type have resulted in many in the industry now questioning if the 737 MAX 7 will ever be certified.
“Last month, SWAPA made the decision to retain several law firms if Southwest attempts to acquire another carrier,” Murray wrote in his letter to union members. “To be clear, neither I nor anyone at SWAPA have any knowledge of an acquisition or merger in Southwest Airlines’ future. In fact, I hope a merger and/or acquisition never comes to pass.”
Southwest Airlines has reportedly refused to comment on the letter or its speculation that a possible merger could be coming.
The airline is relying on the 307 Boeing 737 MAX 7s it has on order to restore its fortunes after a difficult few years for the carrier. The latest and smallest variant of the 737 family is envisaged to become the new backbone of the Dalas-based operator’s fleet as it replaces the carrier’s 387-strong fleet of 143-seat 737-700s. Both types are seen as the ideal size and configuration for Southwest’s operating of high-frequency flights with quick turnarounds at airports.
737 MAX 7 woes
However, Boeing announced in January 2024 that a further delay in the certification of the 737 MAX 7 would result following the Federal Aviation Administration (FAA) requiring the manufacturer to redesign the new aircraft’s engine anti-ice system. The delay means the program has been pushed back a further year, compounding an already delayed timeframe for introduction.
Following the Boeing announcement, Southwest removed the 737 MAX 7 from its 2024 flying program and cut back on the hiring and training of new pilots as a result. It is also planning to recruit 60% fewer flight attendants this year than it had been planning for. The delay to the MAX 7 is also forcing Southwest to acquire more of the larger 737 MAX 8 – the type that Murray believes is simply too big for the airline to operate profitably.
“We watched our seat capacity grow and load factors decline due to a supply/demand imbalance caused by flying too large an airplane in certain markets,” Murray says. “We may have now reached the point where we are no longer able to place the right-sized aircraft into the correct network segment.”
Such factors mean “business decisions must be re-evaluated,” according to Murray and consequently SWAPA has retained law firms it has used previously should any merger plans begin to gain traction at the carrier.
One of the firms retained is said to be a firm instructed by the union for its expertise in protecting SWAPA pilots in a seniority list integration, while others are being lined up “to handle the business and equity side of the transaction to ensure our pilots were invested in the capital of the new entity,” Murray’s letter concludes.
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The head of Southwest Airlines’ pilot union is becoming increasingly concerned over what he has described as “troubling…
The post Boeing delays forcing Southwest to consider merger options says pilot union appeared first on AeroTime.
