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Economical 737: Airline Industry Workhorse

June 26, 1994|JAMES F. PELTZ | TIMES STAFF WRITER

As more carriers try to match the success of low-cost king Southwest Airlines, they're flying an airplane that's already the industry workhorse: the economical Boeing 737.

Boeing has delivered more than 2,500 of the squatty-looking planes since their debut in 1967, making the 737 commercial aviation's top seller. Another 440 are on order at the Boeing plant in Renton, Wash. The aircraft is flown by 159 airlines worldwide.

Southwest--the premier no-frills carrier that United, USAir and many others are trying to emulate--has only 737s in its fleet of 170 jetliners. United has 227 of the jets in its 547-plane fleet, many of which will be devoted to its new low-cost "U-2" service.

The single-aisle jet--the smallest of Boeing's family, with a seating capacity of 160--has long been a plane of choice for carriers serving busy, short-distance routes.

"It is simply a very economical airplane to operate," said George Ebbs, president of Canaan Group Ltd., a consulting firm in Park City, Utah. "Airlines make money with Boeing 737s."

They like the twin-engine jet's price ($34 million to $42 million new), modest maintenance costs, fuel efficiency, reliability and "commonality"--meaning pilots can easily fly different models of the plane, giving airlines more scheduling flexibility.

In November, Southwest in effect launched Boeing's newest version of the plane, the 737-X, when it ordered 63 of the airliners for $2.5 billion. The 737-X can fly faster and farther than existing 737 models.

Initially, Boeing feared the 737 might never recoup its development costs. After the Seattle-based company delivered the first 737 to German carrier Lufthansa, the plane flew into an economic recession in the late 1960s. Although Boeing hoped to sell at least 500 of the jets, fewer than half that many had been sold by 1973.

But the plane slowly picked up momentum, and after the airline industry was deregulated in 1978--ushering in fierce price competition and a rash of low-cost, low-fare competitors that needed reliable, efficient planes--the 737's sales gained even more steam.

"In today's technological world, it's a fairly straightforward, no-frills airplane," Ebbs said.

Still, the 737's storied history can't shield it from the current aerospace recession.

Carriers are buying fewer aircraft, and airplane makers have had to cut back production and lay off thousands of workers. Boeing has slowed assembly of several models, but production is expected to pick up again in the late 1990s.

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