Southwest Airlines Orders 208 Jets Worth $19 Billion
NEW YORK (AP) – Southwest Airlines Co. said Tuesday that it ordered 208 new Boeing 737 aircraft with a value of nearly $19 billion.
The order represents another major competitive achievement for Boeing Co. as it includes 150 of the 737 Max, the revamped, more fuel-efficient version of the aircraft maker’s best-selling plane.
Southwest CEO Gary Kelly has said publicly before that he considered buying planes from Airbus if Boeing couldn’t deliver a redesigned 737 before the end of the decade.
Southwest, which flies more U.S. passengers than any other carrier, will receive the first 737 Max in 2017.
Boeing shares climbed $1.67, or 2.4 percent, to $72.57 in morning trading. Southwest shares rose 9 cents to $8.52.
Boeing says Southwest is the first customer to finalize an order for the 737 Max. Including this order, Boeing now has orders or commitments from 13 customers for more than 900 of the new model. The 737 Max is Boeing’s response to rival Airbus’ 320neo, which also uses new engines to generate fuel-efficiency.
The new order from the Dallas-based airline, which operates an all-Boeing fleet, also includes 58 of Boeing’s next-generation 737s. Because discounts are common, Southwest won’t pay the full $19 billion list price.
Southwest has bought more 737s than any other airline. Before buying AirTran, Southwest only flew 737s. It has since inherited AirTran’s fleet of 717s.
The order is the latest in a string of good news for Boeing.
Last month, Boeing said Indonesia’s Lion Air committed to pay $21.7 billion for 230 Boeing 737s. Lion Air also has options for 150 more planes, valued at $14 billion, bringing the deal’s total potential value to $35 billion. But the Lion Air deal is not a certainty; it still has to finalize the order. Also in November, Emirates Airlines ordered $18 billion worth of 777s.
Both deals came shortly after Boeing finally began delivering its two newest planes, the next-generation 787 and the latest version of the iconic 747.
American Airlines said earlier this year that it will order 260 planes from Airbus and 200 from Boeing, and take options to buy 465 more. But now that the carrier has filed for bankruptcy protection, the decision to go through with the order — valued at $38 billion — is up to a court.
Boeing says the 737 Max will be 10 to 12 percent more fuel efficient than the best single-aisle plane flown today. It will also have the lowest operating costs for a single-aisle model, the manufacturer said.
Boeing produces about one 737 every day in Renton, Wash. It is raising that to 42 per month in 2014.
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