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Southwest orders 208 Boeing 737s valued at $19B

DALLAS — Southwest Airlines is ordering 150 of Boeing's fuel-efficient 737 MAX airplanes and will be the launch customer for the aircraft in 2017, the airline said Tuesday.

"Today's environment demands that we become more fuel-efficient and environmentally friendly, and as the launch customer of the Boeing 737 MAX, we have accomplished both," Southwest chairman and chief executive Gary Kelly said.

Southwest, the top airline at Tampa International Airport based on passenger traffic, also said it is ordering 58 more of the current-generation Boeing 737s, making the order of 208 jets the largest firm order in Boeing's history, as well as the biggest in terms of list price — more than $19 billion.

"This is a thrilling day for us," said Boeing Commercial Airplanes president and CEO Jim Albaugh. "It truly is Christmas come early for Boeing."

With Tuesday's order, Southwest has 350 airplanes ordered for delivery between 2012 and 2022. In addition, it has options to buy 78 more of the current generation and 150 of the MAX version.

Southwest, which had 699 airplanes in its fleet and that of subsidiary AirTran Airways as of Sept. 30, said the new planes "are intended to predominately serve as replacement aircraft as the airline continues the modernization of its fleet."

Boeing has been looking at building an entirely new replacement for the Boeing 737, but wouldn't be able to deliver such an aircraft until early in the next decade. Meanwhile, competitor Airbus had launched a new-engine option, the Airbus A320neo, and airlines lined up to order that airplane, with deliveries to begin in 2015.

Albaugh said Boeing has commitments for 948 of the 737 MAX, and he expects 1,400 to 1,500 by the end of 2012.

But "this is the first definitive order we've signed," Albaugh said. "These are firm orders. That means Southwest Airlines will get the first airplane that rolls off the lines."

He gave Kelly a model of the 737 MAX, which isn't expected to fly until 2016 or be delivered until 2017.

"Gary, I wish I had a real airplane out on the ramp for you," Albaugh said.

"Me, too," Kelly said.

Boeing is promising fuel improvements of 10 to 11 percent from a new engine, the CFM International LEAP-1B engines, along with lower emissions.

Southwest orders 208 Boeing 737s valued at $19B 12/13/11 [Last modified: Tuesday, December 13, 2011 10:43pm]
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