Southwest to Sublease 717's to Delta


#1

News Release Issued: May 22, 2012 12:17 PM ET

Southwest Airlines, Delta Air Lines, And Boeing Capital Reach A Tentative Agreement To Sublease AirTran Boeing 717 Fleet

717s Would Depart the Southwest Fleet Beginning Mid-2013

DALLAS, May 22, 2012 /PRNewswire/ – Southwest Airlines (NYSE: LUV) confirmed today that the airline, together
with its subsidiary, AirTran Airways, Inc., has reached a tentative agreement with Delta Air Lines, Inc., and Boeing Capital Corp., to sublease all 88 of its Boeing 717 aircraft to Delta. A final agreement is subject to Delta and Southwest reaching certain agreements with all parties related to the aircraft leases. The tentative agreement between Southwest and Delta would transition the 717s over three years starting in the second half of 2013 with completion in 2015.

“This is a very complex transaction that requires time and close coordination with multiple parties. While we do have a tentative agreement with Delta, final details must be completed with all parties before a binding agreement between Delta and Southwest can be completed,” said Mike Van de Ven, Southwest Airlines’ Executive Vice President and Chief Operating Officer.

A transition of the 717s was an option that the airline acknowledged when it executed its fleet agreement with the Boeing Co. The plan calls for the transition of approximately three 717 aircraft per month beginning in mid-2013. Southwest is not releasing any additional details about the tentative agreement at this time. The Company currently plans to keep the total fleet count relatively flat as the 717s transition to Delta.

Southwest’s plans to integrate current AirTran Employees into the Southwest operation over the next several years remain unchanged. All Pilots would train and transition directly into the airline’s 737 fleet as the 717s are reduced. AirTran Flight Attendants and Maintenance personnel are currently trained on both aircraft types. Southwest would replace AirTran’s 717 flying with 737 aircraft, and would work with individual airports on facilities transition timelines. Southwest affirms its current plans to maintain service to all previously announced airports.


#2

Delta’s response to this news was that there plans were to get rid of all of there 50 seat aircraft and use the 717’s to replace them in there mainline fleet. Getting rid of the 50 seat RJ’s is not news as most of the industry is retiring them and getting the 700 and 900 series RJ’s . It would be anyones guess where they plan on using these aircraft.


#3

Hmmmm. I thought it would have been interesting to see 717s wearing the Southwest colors. It would have taken some getting used to though…


#4

Southwest’s 727’s looked great in their color scheme. Then, again, the 727 looks great in just about any color scheme!


#5

Yeah, such a shame that Southwest is throwing them away to Delta :/. Get those special paint schemes while you can!


#6

I was just reading where SWA is PAYING 100 Million to convert the 717’s over to delta’s colors and configurations. 100 Million ? Are you kidding me. If Delta wants them let them paint them themselves those creeps . The dirty little secret behind Delta getting the 717’s is they are going to put thousands of regional employees out of work. No one ever mentions that little nugget do they ?


#7

This is funny! The mantra for many years has been that the mainline carriers have been putting thousands of mainline employees out of work because they use the regional carriers more.

Are the 717’s replacing older DC-9’s in Delta’s fleet or are they being used to increase capacity? If the latter than Delta will need to add more cockpit and cabin crews. These crews can come from the regional carriers.


#8

AFAIK the $100M is related to maintenance expenses to make them suitable for lease, not for paint alone and may not even include paint.


#9

RW812 I will keep you posted on what happens but Delta is not inclined to bring on the regional people to support these aircraft.

This is the release for the announcement about the 100 million dollar price tag.

Southwest Airlines will pay $100 million to refurbish Boeing 717 aircraft it will lease to Delta, according to Southwest CEO Gary Kelly.

Delta will be leasing 88 of the 717s currently operated by Southwest subsidiary AirTran Airways. They will begin to enter Delta’s fleet next year, and will be fully refurbished with new interiors and painted in Delta’s livery when they arrive.

Kelly told investors during the airline’s quarterly earnings conference call that it will spend twice as much on the aircraft makeovers than it would have if it had transitioned the aircraft to the Southwest fleet, The Associated Press reported.