Calgary-based WestJet is going through a bit of a transitional period.
At the moment, they’re sort of right-sizing themselves, something they talked about extensively
in an article that they released in June.
There are quite a few developments talked about in that that are worth keeping an eye
on, like their moving away from Eastern Canada, reducing the fleet of Encore Dash 8s, and
cancelling their remaining 3 787 orders.
Another of those developments was a “substantial additional narrow body order” that turned
out to be for 42 Boeing 737 MAX 10s.
That order will hugely bolster their domestic capacity, and it also highlights a bit of
an ongoing trend for WestJet in recent years.
Even prior to 2020, WestJet had gotten rid of a few older 737-700s, including selling
10 of those to Southwest.
A couple others have been returned to their lessors, with a few ultimately being scrapped.
This was partly due to leases ending, and WestJet wanting to shift their focus to larger
737s instead.
For the longest time, the 737-700 formed the backbone of WestJet’s fleet, and seats 130
passengers.
These were the first brand-new planes that WestJet took delivery of in the early 2000s
, and helped advance their 737-200 retirement.
Today though, the -700s now make up less than half of the 737 fleet, with the oldest of
these being delivered between 2001 and 2004.
Over the next couple of years, it seems likely that that number could shrink even further
as more leases expire.
Also, over the course of 2020 and 2021, the even smaller 737-600s were very unceremoniously
retired from the fleet completely.
Those carried around 112 passengers.
If you look at WestJet’s domestic fleet and how it’s evolved over the years, you’ll
start to notice a bit of a pattern.
In the long term, as more -700s leave the fleet, WestJet will be left with a significant
capacity gap between the Encore Dash 8-400s and their 737-800s/MAX 8s.
That’s a gap of 96 seats that you could entirely fill with another Dash 8-400 and
have room to spare.
Now that could be detrimental for a lot of destinations.
Unlike our neighbour to the south, Canada’s population density means that you can’t
exactly fill a 737-800-sized airplane on just any route.
Even if you were to substitute one 737 with two Encore flights instead, that still means
added costs by flying two planes instead of one.
All of this is to say that the 737-600 and -700 had their place in WestJet’s fleet,
and arguably still do.
However, they just don’t just have the better economics of the larger 737 variants.
So, the solution for these thinner, mid-size routes may lie somewhere in their 737 order
backlog - the smallest version of the MAX family, the 737 MAX 7.
WestJet’s original 2013 order for 65 737 MAXs included 25 MAX 7s, and as of the third
quarter of 2019 before they went private, they still had 22 of those on order.
As far as I can tell though, there’s been no public mention of those planes since, and
obviously no breakdown of how many of which variant can be expected.
Because of that, it’s possible that some or even all of the MAX 7 orders could have
been changed to other MAX variants.
Assuming WestJet does still have MAX 7s on order, one other thing is that unlike the
MAX 8 and 9, the MAX 7 isn’t a one-for-one replacement with its previous generation equivalent.
Probably as a way to help improve the economics of the type, Boeing has actually stretched
the MAX 7 from the -700 Next Generation size.
Instead of 130, a WestJet MAX 7 could actually seat more like 142 according to former WestJet
CEO Gregg Saretsky in 2018.
That puts the MAX 7 closer to the upper boundary of this capacity gap.
Nevertheless, these smaller MAXs were still a key part of WestJet’s future plans as
recently as 2018.
Although it’s fun to speculate about other solutions like a WestJet A220…
(I’m not giving up hope), the MAX 10 order shows that they’re not likely to steer away
from the 737.
The trouble with that is, both the MAX 7 and MAX 10 are under a bit of an existential threat.
I won’t go too technical with this because there are people out there who can explain
it far better.
Essentially though, all Boeing planes developed after a certain point have something called
EICAS, which stands for Engine Indicating and Crew Alerting System.
This basically monitors the engines and aircraft systems and allows pilots to more quickly
identify any sort of fault.
All modern Boeing planes have this, with the exception of the 737 MAX, in keeping it as
similar as possible with the 737NG when it comes to training.
Just to be clear though, all 737s do still have a crew alerting system of sorts, it’s
just an older, less centralized version that dates back to even the original 737 series.
Following the recertification of the MAX 8 and 9, that very system was a topic of concern
for American lawmakers.
In December of 2020, the American federal government passed the “Aircraft Certification
Reform and Accountability Act”.
This prevents the Federal Aviation Administration from certifying any new transport category
aircraft without that centralized alerting system after December 27th, 2022.
It’s now the end of October 2022 as I upload this, and Boeing is not going to make that
deadline for either the MAX 7 or MAX 10.
Naturally, they’re trying to get that extended, but if they, quote, “fail to achieve certification,
[they] might choose to discontinue the MAX 7 and/or MAX 10.”
Not only would redesigning the plane to incorporate EICAS cost a fortune, but suddenly these two
MAX types would no longer have that ever-so-coveted commonality.
As some have pointed out, if the MAX 10 does somehow get cancelled, the MAX 9 is close
enough of a stand-in, just with a few less rows.
Should the MAX 7 not make the cut though, Boeing doesn’t really have anything else.
That begs the question of just how competitive WestJet can be on a lower-demand route where,
say, Air Canada is flying an A220 and Porter is flying an E2.
During the less busy seasons, it could be a challenge filling the MAX 8’s 174 seats
on a route that could only really sustain 120 or so.
Obviously there are things they can do to stimulate demand like seat sales, but the
fact is that, on those types of routes, a purpose-built 120-seater is going to be cheaper
to operate than a MAX 8.
There’s also the argument that the MAX 7 might not be so competitive either since it’s
a shrink, but for WestJet, the trade-off of commonality might make that worth it.
So, despite the many twists and turns that WestJet’s strategy has taken over the years,
one thing remains clear.
There is almost certainly a place in their fleet for a jet smaller than the 737 MAX 8,
but what that plane will be remains to be seen.
Thank you very much for watching, and I’ll catch you next time!