Southwest Airlines Co. (LUV) confirmed plans to order 150 of Boeing Co.'s (BA) planned 737 Max jetliners, making the airline the first customer to finalize an order for the more fuel-efficient aircraft.
The commitment by Southwest marks the latest boost to Boeing's sales prospects for the 737 Max, a revamped version of its top-selling plane that will carry new, advanced engines. Boeing plans to deliver the first 737 Max in 2017--two years behind a competing Airbus jet called the A320neo that has garnered more than 1,400 firm orders and commitments. The companies said Tuesday that Southwest will be the first customer to accept delivery.
The Wall Street Journal had reported earlier this month that the parties were in talks.
Southwest also expanded its current order book with Boeing for 58 additional 737NG aircraft. The new orders bring Southwest's total firm orders with Boeing to 350 for 2012 through 2022 and are intended to predominately serve as replacement aircraft as the airline continues to modernize its fleet.
Boeing said the order is the largest in Boeing history both in dollar value, nearly $19 billion at list prices, and the number of airplanes.
Dallas-based Southwest operated a fleet of 699 Boeing jets as of Sept. 30, according to a federal filing. In addition to Boeing 737 jets, the fleet included 88 Boeing 717-200s--a jet the plane maker no longer produces--that Southwest acquired through its acquisition earlier this year of low-fare rival AirTran Holdings Inc.
Boeing formally launched plans to build the 737 Max in August. The company, after years of analysis and discussions with key airline and airplane-leasing customers, decided on a new-engine version of its popular single-aisle plane rather than taking the costlier and riskier approach of building an entirely new jet.
Boeing shares were up 0.9% at $71.50 premarket, whole Southwest was inactive and closed Monday at $8.43.
-By Lauren Pollock, Dow Jones Newswires; 212-416-2356; email@example.com