Boeing Books $19-Billion Order from Southwest

Airline will be the 2017 launch customer for new fuel-conscious 737 MAX jet

Southwest Airlines has ordered 150 of Boeing Commercial Airplanes’ new 737 MAX jets, making it the “launch customer” for the new-engine variant of the 737 that is scheduled to appear in service in 2017. The placement, which also includes 58 new Next-Generation 737s, is worth nearly $19 billion, according to Boeing, and is the largest ever for the jet builder.

Boeing said the new order “supports Southwest’s initiative to modernize its all-Boeing fleet, the world's largest fleet of 737s.”

"Southwest is a special Boeing customer and has been a true partner in the evolution of the 737," stated president and CEO Jim Albaugh. "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."

The 737 MAX is an aircraft being developed to replace the Next-Generation 737s, with a larger and more fuel-efficient engine and some changes to the airframe. The Next-Generation 737, or 737NG, is the current iteration of the aircraft that Boeing first introduced almost 50 years ago. It is the builder’s primary commercial airliner, a short- to mid-range, single-aisle jet available in four seating arrangements for 110 to 2010 passengers.

The new 737 MAX design is seen as Boeing’s counter to the Airbus A320neo, a fuel-efficient, single-aisle jet that has generated numerous new orders since early this year. Boeing unveiled the 737 MAX last summer, and reportedly it has booked more than 900 orders for the planes from 13 buyers, though the OEM said Southwest is the first to finalize its order and will be the first to take delivery of the jets.

Boeing noted that it has taken order for over 6,600 planes in 737NG family, and delivered over 3,800 of those to date.

The new jet will be driven by CFM International LEAP-1B engines, which Boeing promises will reduce fuel burn and CO2 emissions by 10-12% over the most fuel-efficient single-aisle jet now available. It also promises the 737 MAX “will have the lowest operating costs in the single-aisle segment with a 7% advantage over tomorrow's competition.”

"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," stated Southwest Airlines chairman, president, and CEO Gary Kelly. "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."

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