Exclusive: Boeing Approaches Billions Worth Southwest 737 MAX Order – Sources


SEATTLE (Reuters) – Boeing Co is close to a multi-million dollar deal to sell dozens of its 737 MAX 7 jets to Southwest Airlines Co, potentially in the company’s largest 737 MAX order since the plane’s safety ban was lifted, people familiar with the matter. he said Wednesday.

FILE PHOTO: A Southwest Airlines Co. Boeing 737 MAX 8 aircraft travels by taxi to the maintenance area after landing at Midway International Airport in Chicago, Illinois, USA, March 13, 2019. REUTERS / Kamil Kraczynski

If confirmed, the deal would prevent a partial defection to Airbus SE by one of Boeing’s largest customers and provide much-needed support for Boeing after nearly two years of grounding the 737 MAX family, following accidents. fatalities in 2018 and 2019.

The order would include dozens of firm orders and potentially significant options, the sources said.

US carrier Southwest said it does not comment on fleet decisions and has nothing to announce. Boeing declined to comment.

The proposed deal follows speculation of a showdown between the smallest member of Boeing’s MAX family and Airbus’ A220.

Each 737 MAX 7 has a list price of approximately $ 100 million, although such aircraft generally sell for less than half their official value with typical market discounts, according to sources in the airline industry.

The exact terms of any deal and the timing of a possible announcement were unclear.

Shares of Boeing rose 6.4% to close at $ 245.34 on Wednesday. Shares of Southwest fell 0.7% to close at $ 58.51.

The possible deal with Southwest comes after Alaska Airlines agreed in December to buy 23 737 MAX 9 jets following an order from European low-cost carrier Ryanair for 75 of the narrow-body jets.

Southwest Chief Executive Gary Kelly said in November that the company wanted to make a decision soon on renovating its old 143-seat 737-700 jets and was debating between the Boeing 737 MAX-7, which has yet to be certified. , or the A220, which would mean a change to its fully Boeing fleet for the first time.

At a Washington Aero Club virtual luncheon on Wednesday, Kelly said Southwest was still in negotiations with Boeing and reiterated the advantages of having only one type of fleet, while acknowledging that the A220 is “a great plane.”

Any deal for the MAX is not intended to increase the overall size of Southwest’s fleet. It has parked dozens of planes while weathering the COVID-19 crisis.

The MAX 7 is the smallest in the four-member MAX family, with room for 153 seats in a two-class configuration and a range of 3,850 nautical miles.

Boeing’s overall order book was 4,041 aircraft at the end of February.

March 10 marks the second anniversary of an Ethiopian Airlines 737 MAX crash, which occurred five months after a similar disaster on a Lion Air flight. In all, 346 people died.

Reporting by Eric M. Johnson in Seattle; Additional reporting from Tracy Rucinski in Chicago; Edited by Leslie Adler and Matthew Lewis

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