TOMORROWS TRANSPORTATION NEWS TODAY!
After facing a sales slowdown last year, Boeing has benefited from a rebound in booking activity in 2017. As usual, the popular 737 family of narrowbody aircraft has led the way.
Southwest Airlines, one of Boeing’s best customers, could order hundreds more Boeing 737’s in the coming years.
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The rumors are mounting that Southwest Airlines will start flying to Hawaii as soon as 2018. The airline views Hawaii as an important opportunity for growth, with CEO Gary Kelly stating that “Hawaii is a high priority for the company”. It appeared that an announcement was imminent last month, when Southwest Airlines decorated a gate at the San Jose International Airport in California in a Hawaiian motif. The air carrier was also the lead sponsor for the Hawaii tourism summit held in September.
There has been a large increase in communication between Southwest Airlines and Hawaiian government officials and its Tourism Authority. It could be that they are trying to coordinate an official announcement date, as the airline tries to complete the checklist of requirements needed to commence Hawaiian service. These requirements include ETOPS certification and updating their reservations software. ETOPS certification is required to operate twin engine flights over the Pacific Ocean between Hawaii and the mainland.The software update is required to include overnight flights and reservations windows in excess of the current six month limit.
Southwest Airlines resolved a couple of other outstanding issues last year. The airline and its pilots ratified a new contract, settling a bitter 4 year dispute. That was critical, as the pilots claimed that the old contract did not allow for the pilots to operate the new Boeing 737 Max 8 aircraft that were on order. That agreement came on the heels of the Southwest flight attendants also ratifying a new contract. The last obstacle before Southwest’s Hawaiian flights can start is performance testing of the airlines new 737 Max 8 aircraft.
Southwest Airlines pilots union is seeking a Max-imum raise. The airline is currently the launch customer for the Boeing 737 Max aircraft, but the pilots are stating that they will not fly the airplanes without a new contract. The Boeing 737 Max is not current specified in the existing labor contract, as the airplane did not exist at the time that contract was signed. Southwest Airlines is claiming that the new Max is the same as the current version of the existing 737, with the exception of an updated engine and landing gear, so it does fall under the existing contract. The Southwest Airlines Pilots Association just rejected a new contract proposal last November. New negotiations are scheduled to begin between the two sides next months. Delivery of the first aircraft is currently scheduled for the third quarter of 2017.
The airline and the Southwest Airlines pilots union failed to disclose the terms of the proposed contract that was rejected. Southwest is trying to curb rising costs with increased productivity as part of its pay raise proposal. The existing contract was signed in 2012, and both parties are bound by that contract until a new one is signed. This means that any changes outside of the current contract scope would have to be negotiated into a new contract to be effective. The airlines position is that the new 737 Max is the same aircraft type as Boeing’s 737-800 specified in the current union contract. The Southwest Airlines pilots union says the existing contract agreement states that each aircraft type to be flown by the pilots is clearly listed by type and model number. This would leave the only real solution to be a new contract that is agreeable to both parties. Southwest wants to use the new aircraft to cut the higher costs of flying its less fuel efficient older 737 models. The aim is to remove all the 737-300 and 737-500 models from the airlines fleet by the middle of 2018. Boeing’s rollout schedule for the Max has been ahead of schedule. This is most likely due to the fact that there are minimal changes to the aircraft over the previous generation. The Federal Aviation Administration has yet to make a decision on whether or not pilots currently qualified to fly Boeing’s 737-700 and 737-800 models will be automatically certified to fly the new Max aircraft. If not, they will be required to be re-trained on the newer type.
Okay Airways of China signs commitment for $1.3 billion worth of Boeing 737 jets at list price. The deal for 12 aircraft will include 11 of the newer Max models, and was signed at the Singapore Airshow. Okay Airways is the first privately owned air carrier in China, and currently has a fleet of 18 aircraft. The airline is planning to grow its fleet to expand its ability to tap the growth in the mainland China travel market. The airline is also planning to purchase wide body aircraft to launch international routes.
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