Southwest to be first operator of Boeing 737 MAX

CHICAGO Tue Dec 13, 2011 10:14am EST

Boeing Commercial Airplanes division painters (L to R) Larry Marshall, Greg Bracelen and David Grim stand under the airframe of a Southwest Airlines 737 jetliner that has been freshly painted at the airplane manufacturer's new 737-jetliner painting facility in Renton, Washington July 13, 2011. REUTERS/Anthony Bolante

Boeing Commercial Airplanes division painters (L to R) Larry Marshall, Greg Bracelen and David Grim stand under the airframe of a Southwest Airlines 737 jetliner that has been freshly painted at the airplane manufacturer's new 737-jetliner painting facility in Renton, Washington July 13, 2011.

Credit: Reuters/Anthony Bolante

CHICAGO (Reuters) - Southwest Airlines (LUV.N), a loyal Boeing Co (BA.N) customer for 40 years, ordered 208 Boeing 737s worth $19 billion, including 150 of the upcoming 737 MAX.

In placing the MAX order, Southwest would be the first commercial operator for the upgraded, fuel-efficient narrowbody that is due to enter service in 2017.

The airline also became the first to complete an order for the new plane, although Boeing said it has commitments for hundreds more. Boeing said the deal marks its largest firm order ever in dollar value and the number of airplanes.

In addition to the MAX orders, Southwest said on Tuesday it will buy 58 737 Next Generation aircraft. The traditional discount carrier has a fleet of 699 aircraft, including 88 Boeing 717s acquired when it bought AirTran this year.

"Boeing keeps their exclusivity with Southwest and legitimizes the aircraft," said Alex Hamilton, managing director with EarlyBirdCapital. "The recovery continues to roar along."

Boeing said in November it had more than 600 order commitments from eight airlines for its 737 MAX, which will compete with the re-engined A320neo family from EADS' EAD.PA Airbus.

The planemaker said the MAX, powered by CFM International LEAP-1B engines, cuts fuel burn by an additional 10 percent to 12 percent over current single-aisle airplanes. CFM is a joint venture between General Electric Co (GE.N) and France's Safran (SAF.PA).

With the Southwest order, the 737 MAX has orders and commitments for more than 900 airplanes from 13 customers, Boeing said.

Boeing decided this summer to put a new fuel-efficient engine in its hot-selling 737 rather than mount a full redesign of the aircraft, which would have provided greater fuel savings but taken longer to bring to market.

The plan to re-engine was a defensive move to capture part of a giant order from AMR Corp's AMR.N American Airlines, the bankrupt U.S. airline.

AMR ordered 460 single-aisle jets worth up to $40 billion, but split the order between Boeing and Airbus, marking the end of an exclusive relationship with Boeing.

The deal included a provisional order for 100 revamped 737 MAX. That portion of the order could be jeopardized by AMR's bankruptcy.

Boeing on Tuesday also announced inaugural list prices for its 737 MAX aircraft. The 737 MAX 8 will sell for a catalogue price of $95.2 million, Boeing said on its website, while the larger 737 MAX 9 will sell for $101.7 million.

(Reporting by Kyle Peterson in Chicago, Karen Jacobs in Atlanta and Bijoy Koyitty in Bangalore; Editing by Derek Caney)