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Southwest Airlines delays delivery of 67 Boeing aircraft

Star-Telegram

Southwest Airlines announced plans to postpone the delivery of 67 Boeing 737 aircraft, allowing it to move $1.9 billion of new airplane costs to past the year 2020.

The Dallas-based carrier said it still plans to take its first delivery of the Boeing 737-MAX next year, which is the newest version of the narrow-body aircraft. However, it does not plan to add the MAX aircraft into service until 2018.

The new aircraft delivery schedule was unveiled at an investor day held in New York. The airline also said it will move up deliveries of six Boeing 737-800 orders to next year from 2018. The new deliveries will help Southwest cover the retirement of its “Classic” Boeing 737-300 fleet, which it pushed up to 2017, a year earlier than previously announced.

“We went to the used markets so now we don’t need all those Boeing deliveries,” Southwest chief executive Gary Kelly said at an investor conference on Thursday. “That’s what’s going on there.”

Shares of Southwest dropped 67 cents on Thursday, closing at $39.59 on the New York Stock Exchange.

Boeing shifted production slots to accommodate Southwest’s new delivery schedule and did not have any difficulty finding other airlines to take the slots as it has a backlog of 3,213 unfilled Boeing MAX orders, company spokesman Doug Alder told Bloomberg News.

“Overall, we continue to see healthy demand in the single- aisle market, with the Next-Generation 737 sold out of positions and the MAX sold out through 2021,” Alder said.

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