Southwest Moves Up 40 Max 737-8 Orders, Delays 23 Max 7 Planes

• January 02 2018
• Mary Schlangenstein

Southwest Airlines Co. juggled its aircraft order plans with Boeing Co. over the next few years, including a decision to defer orders for its smallest Max 7 plane to as late as 2024.

Southwest Airlines Co. juggled its aircraft order plans with Boeing Co. over the next few years, including a decision to defer orders for its smallest Max 7 plane to as late as 2024.

Southwest also said it’s exercising options to buy 40 737 Max 8 aircraft in 2019 and 2020. The carrier mentioned the decisions at the end of a statement announcing that it would pay employees a $1,000 cash bonus to "celebrate" recent legislation providing a corporate tax cut.

The deferral piles additional pressure on the smallest Max version of Boeing’s 737 family, a variant that has struggled to gain traction while airlines opt for planes with more seats. The Max 7 has faced competitive threats from aircraft of about the same size built by Bombardier Inc.

The 40 Max 8s carry a list price of nearly $4.5 billion, although airlines often receive
discounts when ordering multiple aircraft. The plane orders don’t affect Southwest’s plans for capacity growth this year, the Dallas-based airline said. It didn’t comment on expansion plans in the years beyond 2018.

The changes give life to Chief Executive Officer Gary Kelly’s statements last month that the airline would invest benefits from the recent corporate tax rate reduction in buying more planes.

The order actions mean Southwest will get 15 Max 8 planes in 2019 and 25 in 2020.