I didn’t realize quite how cozy Southwest and Boeing had grown:
On something of a lark, Boeing had given Kelleher a sweet no-money-down deal on his first four 737s in 1971, and Kelleher repaid the favor by buying more than 1,000 737s over the next 50 years — and zero of any other plane. According to a recent lawsuit against Southwest and Boeing, the airline had rewarded this loyalty with an unwritten but zealously enforced “handshake” agreement, dating back to the 1990s, that Boeing would not sell any planes for less than Southwest was paying, or Boeing would send Southwest a rebate check. And in exchange for that guarantee, Southwest reliably swooped in with big orders and/or accelerated payments after accidents, stock price plunges, or both; the same lawsuit claims that, after September 11, the airline formed an off–balance-sheet slush fund to bail out Boeing during unanticipated shortfalls, and lent other airlines its own planes when Boeing production fell behind, all while it waited patiently for its order deliveries to be filled at a time when it was convenient for Boeing. As the carriers became more profitable in the twenty-first century, more of them followed Southwest’s lead and helped Boeing make its numbers, with United Airlines and Alaska Airlines pitching in during fourth-quarter 2015, alongside Southwest, to make payments not due until 2016. Those partnerships were but one numbers-smoothing mechanism in a diversified tool kit Boeing had assembled over the previous generation for making its complex and volatile business more palatable to Wall Street, and while not entirely kosher and not at all sustainable, they were by far the least destructive tool in the kit — until Southwest called in the favor on its orders for the MAX.