Southwest Sees $500 Million Savings Reworking Jet Orders

Southwest Airlines Co. (LUV) said it expects to save more than $500 million in capital spending on new jetliners through 2018 by pushing back delivery of some Boeing Co. planes as it curbs growth in its fleet.

The world’s largest discount carrier will receive 23 jets in 2018 instead of 40 under the previous schedule, and 25 in 2019 rather than a projected 33, according to a statement today. The shift includes converting some orders for current Boeing 737-700s to the new 737-7 Max, Dallas-based Southwest said.

“Our restructured aircraft delivery schedule will reduce our capital spending for firm orders through 2018 by more than $500 million,” Chief Executive Officer Gary Kelly said in the statement. He said Southwest’s all-Boeing fleet would be little changed in 2013 and 2014 compared with 2010.

Ordering the 737-7 Max makes Southwest the first customer for the smallest version of Boeing’s upgraded 737. That’s a boost for Chicago-based Boeing, which had gone without a buyer for the 737-7 variant since unveiling the Max program almost two years ago to counter Airbus SAS’s A320neo model.

To contact the reporter on this story: Ed Dufner in Dallas at edufner@bloomberg.net

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net

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