Southwest Airlines will be the launch customer for Boeing’s new 737 MAX airplane, announcing on Tuesday the first firm order for the new aircraft and the largest firm order in Boeing history, for 150 of the new jets worth $19 billion at list prices.
First delivery of Boeing’s re-engined update of its best-selling 737 narrowbody airliner is expected in 2017. The new CFM LEAP-1B-powered aircraft is designed to burn 10-12% less fuel than the current 737, and a 7% operating cost advantage over the Airbus A320neo.
The order will give Southwest the flexibility to receive both the 737-7 MAX or 737-8 MAX. It also added options to purchase 150 additional 737 MAX jets between 2021 and 2027.
“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,” said Gary Kelly, Southwest Airlines Chairman, President, and CEO in a statement. “We are teaming up with our friends from Boeing to lead the industry in a way that makes both our Shareholders and our Customers proud to associate with Southwest Airlines. Today’s announcement will allow us to maintain our position as a low-cost provider in the years ahead.”
“Southwest is a special Boeing customer and has been a true partner in the evolution of the 737,” said Boeing Commercial Airplanes President and CEO Jim Albaugh in a statement. “Throughout our 40-year relationship, our two companies have collaborated to launch the 737-300, 737-500 and the Next-Generation 737-700 – affirming the 737 as the world’s preferred single-aisle airplane. As launch customer for the 737 MAX, Southwest, Boeing and the 737 continue that legacy.”
American Airlines in July became the first customer for the 737 MAX even before the program was publicly announced, but Southwest will receive the first airplane. Boeing says it now has 13 customers committed to 900 copies of the new aircraft.
Today’s Southwest deal also adds 58 additional current generation 737s, exercising 25 options it already held. Further, Southwest added options to buy 78 additional 737NG jets.
Southwest now holds firm orders for a total of 350 Boeing 737s scheduled for delivery through 2022, with options to purchase 292 more. The airline will also take delivery of five leased 737-800s in 2012.
