Southwest Airlines formally launched (15-May-2013) the Boeing 737 MAX 7 aircraft powered by the LEAP-1B engine. This is the third member of the 737 MAX family. The airline converted an existing order for 30 737NGs to the MAX 7 variant. The LCC also exercised options to add five more Next-Generation 737-800s to its fleet. Southwest originally launched the LEAP-1B engine on the 737 MAX in 2011 with an order for 150 firm aircraft. This new order takes the airlines total firm fleet to 360 engines. The new aircraft are scheduled to begin delivery in 2019. Southwest also has options for 150 additional LEAP-1B-powered 737 MAX aircraft. The LEAP-1B engine achieved a major milestone in Apr-2013 when CFM concluded design freeze. Parts manufacturing for the LEAP-1B engine will then accelerate through year end, leading to build-up of the first engine in early 2014. The LEAP-1B is on schedule for CFM flight testing in 2015 and engine certification in 2016. The 737 MAX is scheduled to enter service in 2017. Southwest is CFM's largest commercial customer, operating a fleet of more than 600 CFM56-powered 737s. With the MAX 7 conversions and exercised options for 737-800s, Southwest’s unfilled orders consist of 180 737 MAX airplanes and 137 737NGs. The 737 MAX now has orders for 1315 aircraft. [more - original PR - CFM] [more - original PR - Boeing/Southwest]
Southwest Airlines formally launches Boeing 737 MAX 7, converts 30 737NG order to MAX 7 varient
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Iran CAPA Aviation Summit – hope turns to frustration, but optimism remains as growth abounds
When CAPA – Centre for Aviation held its first conference in Iran at the end of Jan-2016 the atmosphere was primarily one of optimism. Immediately preceding the conference the expectation was that Iran and the West would move to rapidly reverse decades of estrangement. The first round of sanctions against Iran had come down – in line with the historic 2015 Joint Comprehensive Plan of Action (JCPOA) nuclear agreement reached between Iran and the ‘5+1’ powers – and major airlines and aircraft manufacturers were coming to the table.
While it was acknowledged that progress on major deals was not going to happen overnight, the hope was that as layers of sanctions came down, Iran would be embraced by the rest of the world. In return, Iran was expected to open itself up progressively to foreign trade and investment, and to travel.
The road ahead was perceived to be one that was both a very different, and far easier, one than the one Iran had already travelled. Aviation in particular was a sector that was expected to shine and lead the way for a new era for the country.
Air Canada Part 2: Financial progress makes investment grade metrics more tangible
A decade ago it would have been unheard of for Air Canada to contemplate reaching an investment grade credit rating. The airline had emerged from bankruptcy protection, but was still struggling financially. It would teeter on the verge of another formal restructuring before setting out on a course to restructure its financial foundation – a process that has allowed the airline to improve its balance sheet and leverage.
Air Canada’s leverage targets for YE2018 will not meet the general proxy for an investment grade rating; however, its lower capital commitments and debt refinancing could create an opportunity for achieving that status beyond 2018.
Attaining an investment grade credit rating likely remains a longer term goal for Air Canada as its major financial goals in the short term remain paying down debt that is creeping up due to a fleet renewal, as well as funding growth to drive long-term shareholder value. More meaningful shareholder returns will likely occur once the company reaches what it deems as acceptable progress in debt management, and reaches a certain maturity level in growing its international network.
This is Part 2 in a two part series on Air Canada. Part 1 dealt with long haul LCC subsidiary, rouge.