One of the hallmarks of legacy airline business models is adopting a single aircraft fleet strategy, something which may seem rather minute but actually plays a critical role in long-term strategic decision-making for many budget airlines. The purpose of this kind of low-cost carrier fleet strategy is, as always seems to be the case, to reduce costs, as budget airlines derive their entire competitive advantage over legacy airlines by lowering operational costs to the point that they can undercut legacy carrier
prices.
By operating an aircraft fleet with just a single aircraft model, low-cost carriers can order aircraft in bulk, allowing them to negotiate massive discounts from manufacturers due to both the sheer value of their orders and the long-term commitment a budget airline would be making to the manufacturer. Furthermore, budget airlines also tend to buy the newest aircraft as they are the most efficient, and allow manufacturers to score big wins for some of their newest models.
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The operational advantages of operating a single-type aircraft fleet extend beyond the capital savings and relationships with manufacturers that are created. For starters, an airline operating a single aircraft type will only ever need to train pilots and cabin crew on that model, meaning that training costs are significantly lowered, according to Flights, Miles, and Points. Additionally, a carrier’s maintenance network will be built almost exclusively around a single kind of jet.
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The Boeing 737 has historically been an ideal aircraft for low-cost airlines
Having set the standard for efficiency for decades, the Boeing 737, produced by Seattle-based Boeing Commercial Airplanes, is one of the most commercially successful aircraft of all time. The twin-engine aircraft is ideal for short and medium-haul routes, and the jet has historically offered passengers an impressive improvement in efficiency over competitors.
As a result, the aircraft has long been a favorite of budget airlines across the globe, which loved the idea of a short and medium-haul jet from a reputable manufacturer that offered superior efficiency and lower operating costs. Throughout the decades, Boeing has also introduced updated variants of the 737, including the 737 Classic, 737 Next Generation, and 737 MAX, all of which have continued to improve on the efficiency of their predecessors.
Alaska, Ryanair, and Southwest are three major airlines that rely extensively on 737s
For these reasons, the Boeing 737 has slowly become a favorite of budget airlines across the globe, many of which have decided to exclusively build fleets consisting of Boeing 737 family jets. Some examples of such carriers can be observed in the table below, but note that aircraft on temporary lease or operated by regional subsidiaries are not considered for this analysis:
Boeing 737-only airline: |
Number of 737 family aircraft in fleet: |
---|---|
Southwest Airlines: |
828 |
Ryanair: |
581 |
Alaska Airlines: |
324 |
These three carriers are among some of the largest and most influential non-legacy carriers on the planet, and their fleet development strategies have centered around the Boeing 737 family. Southwest Airlines exclusively operates 737 family aircraft today. Ryanair’s fleet includes over 580 737s, although the airline does have a handful of A320s on lease. Alaska Airlines has a mainline fleet consisting entirely of Boeing 737 jets, with its regional subsidiary operating some smaller aircraft.
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Across the board, these airlines have found long-term commercial success by ordering 737 family aircraft, and all have placed large orders for the 737 MAX, the latest variant. The Boeing 737 MAX, however, has struggled extensively with multiple crashes, safety incidents, and other issues leading to its grounding. As a result, it is unlikely that manufacturer Boeing will produce another 737 family variant, forcing airlines like Southwest, Ryanair, and Alaska to consider what a future might look like without a Boeing 737 family aircraft for their fleet.
A bigger problem than one might think
From the surface, one might be tempted to ask why this issue is that big a deal, as these airlines can simply purchase new aircraft that are not members of the 737 family. The Airbus A320neo family offers similar efficiency, with even more versatility than the 737 family, and it carries a better safety reputation.
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However, making the shift to a competing aircraft could likely be a major challenge for multiple reasons, as these airlines have built their entire operational structures around the Boeing 737. Everything from their route networks to pilot contracts pretty much revolves around Boeing 737s and retraining pilots on a new kind of aircraft would be extremely expensive, time-intensive, and unpopular. Furthermore, these airlines would have to completely rebuild their maintenance networks to serve a new kind of aircraft.
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So what are the potential solutions?
The potential solutions to this problem almost all involve the purchase of a new kind of aircraft, as keeping aging 737 MAX aircraft would not only be incredibly expensive, but it would eventually prove completely infeasible. Carriers might just have the option to simply accept the massive costs and operational overhaul associated with shifting to a competing aircraft family.
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There is one potential option, however, that could make airlines’ decisions a bit easier in this regard. For starters, just because Boeing is not planning on building a new 737 variant does not mean that they are not planning to build a successor for the aircraft. If this new Boeing narrowbody can match some of the maintenance infrastructure or operational specifications of the 737, it might make the transition easier for these carriers. Southwest, for example, is already looking to begin retiring older 737s as it looks toward the future, according to FlightGlobal, and the company will have to consider what its network and operations would look like without 737 family jets.
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This is very much a question for the future. Currently, most major 737-only airlines have massive orders on the books for 737 MAX aircraft, meaning that it will likely be decades before the last 737 leaves Southwest, Ryanair, or Alaska.