/Southwest Airlines agrees to buy 100 of Boeings smallest 737 Max planes – CNBC

Southwest Airlines agrees to buy 100 of Boeings smallest 737 Max planes – CNBC

Federal Aviation Administration (FAA) Chief Steve Dickson, sitting inside the flight deck of a Boeing 737 MAX aircraft, conducts a pre-flight check ahead of an evaluation flight from Boeing Field in Seattle, Washington, September 30, 2020.

Mike Siegel | Pool | via Reuters

Southwest Airlines on Monday said it agreed to buy 100 of Boeing‘s 737 Max 7 planes as it plans to retire older jets, sticking with the manufacturer that has been the backbone of its fleet for 50 years.

The Dallas-based low-cost airline said under the agreement it would convert 70 of its firm orders for Max 8 planes to the smallest jets, the Max 7s. It also added 155 options for 737 Max 7 or Max 8 airplanes through 2029.

Southwest, which operates an all-Boeing 737 fleet, said its order is a vote of confidence in the planes. U.S. regulators lifted a 20-month grounding of the 737 Max in November, a flight ban that was put in place after two crashes over less than five months killed 346 people.

“This cost-effective order book with Boeing allows the Company to maintain the operational efficiencies of an all-Boeing 737 fleet to support its low-cost, point-to-point route network,” Southwest said in a statement. The airline only operates Boeing 737 planes.

Southwest said it would take delivery of the first 30 737 Max 7 planes in 2022. Boeing is working with the Federal Aviation Administration toward certification of the planes.

The Max 7 planes have a list price of $99.7 million apiece, but airlines usually get steep discounts for large orders — particularly in the market devastated by the coronavirus pandemic. Southwest will configure the 737 Max 7 with 150 seats, compared with the older model of the 737 it’s replacing, which has 143 seats. The carrier’s 737 Max 8s have 175 seats.

Boeing shares were up 1.8% in premarket trading, while Southwest was up 0.3%.

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