could retire its entire fleet of Classics and 717s by the end of 2017, when it begins to take delivery of its first re-engined 737 MAX, CFO Laura Wright told investors today.
The carrier will begin taking delivery of the first of the 150 MAX aircraft it has on order in late 2017. “This will allow us to retire all our -300s and -500s and 717s,” Wright says. Southwest previously had said the delivery of the MAX aircraft, slated for fleet renewal rather than expansion, would only accelerate the retirement of its Classics.
Southwest also will begin retiring -700s by the time it takes delivery of the MAX, Wright says.
The airline is taking delivery of 33 175-seat 737-800s this year, the first expected to arrive in March. About 40 -300s will be retired this year, Wright says.
Meanwhile, the -700 fleet will be reconfigured with an additional row of six seats. The -700s absorbed through the AirTran Airways merger will be reconfigured as they are integrated into the Southwest fleet. Despite the additional seats, Southwest expects capacity to be flat this year, Wright says.
Separately, Southwest, long known for its aggressive fuel hedges, is adopting a different tact in 2012, as it did at the beginning of 2011. “We have minimal hedges for the first half of the year,” says Wright. The airline is hedged for the second half if prices of West Texas Intermediate crude oil rise above $100.
Southwest forecasts that WTI will cost $98-103 this year, which translates to $3.30 per gallon of jet fuel, says Wright.