4 ms·

So if you happen to hold any stock in any budget airlines (Southwest, Ryanair, that sort of thing) I would seriously consider dumping it now. If the Max doesn'

by cletus 7y ago

So if you happen to hold any stock in any budget airlines (Southwest, Ryanair, that sort of thing) I would seriously consider dumping it now. If the Max doesn't return to service or even if its grounding is prolonged this represents an existential threat to the likes of Southwest as part of the way they maintain their low margins is by having a fleet with one and only one type rating. Other airlines (eg American) that bet on the Max (instead of, say, the A320neo) may suffer in the short to medium term too but at least they're better equipped to deal with this as they already deal with having a heterogeneous fleet. Personally I never wanted to fly on the Max even before the crashes because (at least on American) they're even more cramped the the A321s and older 737s and 767s. I mean, who want that to shave off a few dollars? It's already uncomfortable enough. After the crashes? Why would I? The leadership of Boeing needs to be ousted and, honestly, the DoJ should see if there was any criminal wrongdoing here as the response from Boeing (ie trying to blame the pilots and refusing to ground the plane) was abysmal. The fish rots from the head and if CEO pay is justified by the results they get (cough) then they're also responsible when it goes horribly wrong, which it did. The big winner here is Airbus. And yes, I fully expect Boeing to attempt to rebrand and salvage the Max. Personally, I hope it never flies again. EDIT: removed EasyJet as they operate an Airbus not 737 fleet. Southwest and Ryanair however fly only 737 variants.

clintonb 7y ago
> If the Max doesn't return to service or even if its grounding is prolonged this represents an existential threat to the likes of Southwest as part of the way they maintain their low margins is by having a fleet with one and only one type rating. The 737 MAX has the same rating as every 737 that Southwest and others fly. Part of the MCAS controversy stems from the fact that Boeing did not discuss it to avoid needing a new type rating. See https://www.aviationlawmonitor.com/2019/03/accident-investigation-1/the-boeing-737-max-8-controversy-explained/ https://www.aviationlawmonitor.com/2019/03/accident-investig... for more information.
- tyingq 7y ago
  They are saying that if the MAX isn't available, Southwest will have to consider buying a completely different aircraft.
  - natch 7y ago
    Good! I like Southwest and would hate to have them off the table as an option for some of my travel.
  - clintonb 7y ago
    Yeah...they can buy other 737 variants. The MAX may be one of the most fuel-efficient 737s on the market, but the 737NG line is still in production.
    - kn0where 7y ago
      They are not going to buy more NGs. The NG is technically still in production but production has wound down significantly. All orders for airlines have been built, and all that remains are orders for the military version and various private customers. It would probably cost somewhat more for Southwest to order NGs now than it did during the production heyday where economies of scale made the plane cheaper to produce. Buying brand-new, less-efficient 737NG planes when competing airlines gradually have more and more A320neos could allow Southwest to keep growing, but might not be a great long term investment. Southwest can keep flying their existing NG fleet for a very long time, however, so they can (and have to) wait for new planes. Southwest isn’t forced to stay with the 737. It’s all about costs. Buying new NGs probably would cost more in the long run than (years from now when the backlong is reduced) starting to operate the A320neo, but far cheaper than either is if the MAX returns to service and they get hefty compensation from Boeing.
      - tyingq 7y ago
        The A220-300 could also be a reasonable choice.
starfallg 7y ago
Easyjet used to have 737-200/300/700s, but they were completely phased out several years ago. Now their fleet is entirely Airbus A32x, which are fly-by-wire and unlikely to run into the type certification issues that the 737 did.

by cletus 7y ago

clintonb 7y ago

> If the Max doesn't return to service or even if its grounding is prolonged this represents an existential threat to the likes of Southwest as part of the way they maintain their low margins is by having a fleet with one and only one type rating. The 737 MAX has the same rating as every 737 that Southwest and others fly. Part of the MCAS controversy stems from the fact that Boeing did not discuss it to avoid needing a new type rating. See https://www.aviationlawmonitor.com/2019/03/accident-investigation-1/the-boeing-737-max-8-controversy-explained/ https://www.aviationlawmonitor.com/2019/03/accident-investig... for more information.

tyingq 7y ago
They are saying that if the MAX isn't available, Southwest will have to consider buying a completely different aircraft.
- natch 7y ago
  Good! I like Southwest and would hate to have them off the table as an option for some of my travel.
- clintonb 7y ago
  Yeah...they can buy other 737 variants. The MAX may be one of the most fuel-efficient 737s on the market, but the 737NG line is still in production.
  - kn0where 7y ago
    They are not going to buy more NGs. The NG is technically still in production but production has wound down significantly. All orders for airlines have been built, and all that remains are orders for the military version and various private customers. It would probably cost somewhat more for Southwest to order NGs now than it did during the production heyday where economies of scale made the plane cheaper to produce. Buying brand-new, less-efficient 737NG planes when competing airlines gradually have more and more A320neos could allow Southwest to keep growing, but might not be a great long term investment. Southwest can keep flying their existing NG fleet for a very long time, however, so they can (and have to) wait for new planes. Southwest isn’t forced to stay with the 737. It’s all about costs. Buying new NGs probably would cost more in the long run than (years from now when the backlong is reduced) starting to operate the A320neo, but far cheaper than either is if the MAX returns to service and they get hefty compensation from Boeing.
    - tyingq 7y ago
      The A220-300 could also be a reasonable choice.

starfallg 7y ago

Easyjet used to have 737-200/300/700s, but they were completely phased out several years ago. Now their fleet is entirely Airbus A32x, which are fly-by-wire and unlikely to run into the type certification issues that the 737 did.