Southwest Airlines Sells 20 Boeing 737s For $815 million

Southwest Airlines has entered into an agreement to sell 10 Boeing 737-800s and 10 Boeing 737 MAX 8…

Southwest Airlines Sells 20 Boeing 737s For $815 million

Southwest Airlines has entered into an agreement to sell 10 Boeing 737-800s and 10 Boeing 737 MAX 8 aircraft. The airline announced the sale in a filing on May 8th. However, these planes will not exit the fleet. Rather, Southwest will leaseback the aircraft. This agreement will give the airline $815 million in cash.

Southwest Airlines has entered a sale-and-leaseback agreement for 20 Boeing 737s. Photo: Getty Images

Southwest enters a sale-and-leaseback agreement

The airline will receive $815 million in a sale-and-leaseback agreement for 10 Boeing 737-800s and 10 Boeing 737 MAX 8 aircraft. The airline did not include information about which lessors the airline is working with for this agreement nor which specific aircraft are part of the deal.

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The agreement includes 10 Boeing 737 MAX 8 planes. Photo: Southwest Airlines

Southwest’s fleet

The Southwest Airlines fleet consists entirely of Boeing 737 Next Generation and 737 MAX aircraft. The MAX planes are currently grounded pending recertification. All of Southwest’s planes are in an all-economy configuration. As of March 31st, 93 of the airline’s active 737 Next Generation planes are in long-term storage due to the decline in demand.

There are 742 planes in Southwest’s fleet. Per the most recent filing, Southwest had 501 737-700s in its fleet with an average age of 16 years. These planes have 143 seats onboard.

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110 of Southwest’s 737-700s are on lease. Photo: Southwest Airlines

Then there are 207 Boeing 737-800s in the fleet with 175 seats. These are an average of only five years old and seat 175 passengers.

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The 737 MAX and 737-800 seat the same number of passengers. Photo: Southwest Airlines

Lastly, there are 34 Boeing 737 MAX 8s, also with 175 seats. These planes are an average of two years old. Although, the grounding has meant these planes haven’t flown for over a year.

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There are 175 seats inside the Boeing 737 MAX. Photo: Southwest Airlines

622 of these planes are outright owned while 120 are leased. Of the 120 leased aircraft, 110 are 737-700s, while seven are 737-800s, and the last three are 737 MAX 8s. These agreements take those numbers to 17 leased 737-800s, and 13 leased MAX 8s for a total of 130 leased planes.

In terms of orders, the airline has just under 250 aircraft on order with another 115 options. The airline has worked with Boeing to alter its delivery schedule. Through December 31st, 2021, Southwest will take a maximum of 48 Boeing 737s– once the grounding ends. Some of these aircraft are scheduled to be delivered on lease.

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After this, Southwest will have 130 leased aircraft. Photo: Getty Images

What will this mean for Southwest?

Leasing an aircraft adds to a company’s overall cash expenses in the long-term. However, in the short-term, sale-and-leaseback agreements are giving airlines some much-needed cash. In the first quarter of 2020, Southwest lost $94 million. Although not as much as other airlines, things may get worse for the airline if it has to send more aircraft into storage or sell fewer seats onboard planes. In addition, the airline is investing on the ground to keep its employees safe.

Southwest boeing 737 max grounded getty images
This agreement will increase the airline’s long-term costs while providing short-term cash. Photo: Getty Images

Passengers will not notice much of a difference on a leased aircraft. Southwest will be able to maintain its interior branding and configurations.

Overall

Southwest is joining a list of airlines that have agreed to sale-and-leaseback agreements. United Airlines sold 22 planes to BOC Aviation for leaseback, Cathay Pacific entered into a sale-and-leaseback deal for six 777s also as a result of this crisis.

$815 million will help secure Southwest’s short-term future. However, if the airline has to enter into additional sale-and-leaseback agreements, it could indicate broader struggles at the airline.

What do you think about Southwest selling 20 Boeing 737s? Let us know in the comments!

Source : Simple Flying More   

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Aerolineas Argentinas Airbus A330 Flies 11 Hour Flight To Nowhere

An Aerolineas Argentinas repatriation flight on May 6th suffered a hydraulic leak over the Atlantic Ocean. The aircraft…

Aerolineas Argentinas Airbus A330 Flies 11 Hour Flight To Nowhere

An Aerolineas Argentinas repatriation flight on May 6th suffered a hydraulic leak over the Atlantic Ocean. The aircraft departed Buenos Aires en route to London-Heathrow with British nationals onboard. Due to the leak, however, the crew returned to Buenos Aires. The Airbus A330-200 landed safely just over 11 hours after departing Argentina.

An Aerolineas Argentinas Airbus A330 returned to Buenos Aires due to a hydraulic leak. Photo: Nathan Coats via Flickr

The 11-hour flight to nowhere

The Airbus A330-200, registered as LV-GIF, flew AR-1130, departing Buenos Aires on May 5th. The aircraft was in the midst of its Atlantic crossing, northeast of Fortaleza in Brazil, according to the Aviation Herald when the crew decided to return to Buenos Aires due to the hydraulic leak.

The aircraft landed back in Buenos Aires just over 11 hours after takeoff. The plane was supposed to also bring back Argentinian residents from the UK back to Buenos Aires. Aerolineas Argentinas sourced a new aircraft, and, on the next day, a new Airbus A330 performed the roundtrip flight.

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The aircraft turned back just at it began the transatlantic crossing northeast of Fortaleza. Screenshot: Flightradar24

An 11-hour flight to nowhere is never fun. However, given the nature of this flight, it likely was a little more infuriating for passengers just trying to get home. The next day, May 6th, another Airbus A330 flew to London and landed safely.

The aircraft

LV-GIF is a three-year-old Airbus A330-200, according to data from Flightradar24. The aircraft is equipped with 24 seats in an angle-flat business class product. There are 248 seats in economy. A total of 10 A330-200s are in the Argentinian flag carrier’s fleet.

There are 10 A330-200s in the carrier’s fleet. Photo: Airbus

Aerolineas Argentinas repatriation flights

Since March, the airline has run over 60 repatriation flights bring 19,000 Argentinians home from cities like Miami, Madrid, Punta Cana, Cancun, Bogota, Quito, Lima, Rio de Janeiro, Florianopolis, London, and Rome.

This London flight was the first Aerolineas Argentinas flight to Heathrow since 2015 for the Rugby World Cup. Commercially, the airline has not flown to London since the 1990s.

Aerolíneas Argentinas Airbus 330-200 landing at Roe Getty
The last time the airline flew to London was in 2015. Photo: Getty Images

In addition to these repatriation flights, Aerolineas Argentinas has been running flights to Shanghai via Auckland to bring back essential supplies to Argentina. These flights are also operated using Airbus A330-200 aircraft.

Could Aerolineas Argentinas return to London?

The Argentinian flag carrier recently retired the Airbus A340 leaving its long-haul fleet with fuel-efficient Airbus A330s. However, the location of the airline’s hub poses a sort of geographic problem. A flight to London can easily be around 13-14 hours meaning that Aerolineas Argentinas would need a minimum of two or three aircraft to operate this route alone depending on departure and arrival times. This would be an inefficient use of the fleet, which only consists of 10 aircraft. Unless, of course, Aerolineas Argentinas ordered more planes.

Aerolíneas Argentinas
It is unlikely that the airline will return to London. Photo: Getty Images.

However, in the current environment, it is unlikely that the airline will embark on any sort of long-haul expansion anytime soon. As some airlines shrink, there may be additional widebody aircraft available on the secondhand market that the carrier could acquire. But, the likelihood of Aerolineas Argentinas doing so is very slim. Currently, the only aircraft the airline has on order are Boeing 737 MAX planes.

Were you onboard this repatriation flight? What happened? Let us know in the comments!

Source : Simple Flying More   

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