Southwest Helps Boeing with BIG B737 Order

Buoyed by a record-setting order from Southwest Airlines, Boeing says it now has 13 customers for its 737 MAX and believes it could have 1,400 to 1,500 firm commitments for the aircraft by the end of 2012.

Jim Albaugh, president and CEO of Boeing Commercial Airplanes, made the prediction during a press briefing today about Southwest’s firm order for 150 737 MAX narrowbodies and 58 additional 737NG aircraft. Southwest will be the launch customer for the MAX, with the first four deliveries scheduled for 2017.

The order for 208 aircraft is the largest in Boeing’s history in terms of number of airplanes and dollar value, Albaugh says. adding that it even tops the recent AirAsia order for 200 Airbus A320NEOs.

The Southwest deal is the first firm agreement for the MAX, and also includes options for another 150 of the aircraft. Albaugh says the Southwest deal brings the total number of commitments for the MAX to 948, although most are not yet firm orders.

Neither Boeing nor Southwest will disclose how much the airline is paying for the 208 aircraft it just ordered. They have a list value of $19 billion, but both Boeing and Southwest acknowledge the carrier negotiated a deep discount.

The only pricing hint came from Southwest. Chief Operating Officer Mike Van de Ven says that for the 350 total airplanes Southwest now has on order, the carrier’s average annual capital expenditure commitment from 2012 through 2022 will be $1.2 billion—or $12 billion through the period.

Van de Ven says Southwest took a close look at the NEO, although the carrier has been an all-Boeing customer for its entire existence. He says both the NEO and the MAX “deliver substantial improvements on existing aircraft,” but the airline concluded the MAX was the best choice for Southwest with its combination of improved economics, fleet commonality and “network fit.” Southwest officials also cited its weight, which they said would be somewhat lighter, and the ability to opt for a bigger aircraft with the 737 MAX 8.

“It really comes down to what works best for our mission,” says Brian Hirshman, senior VP-technical operations. For example, the MAX works better with the shorter field at Chicago Midway International Airport. Van de Ven says the MAX gives Southwest “a little more mission flexibility at some of the airports we serve” than the NEO would have

READ MORE:  AviationWeek