NEW YORK (Reuters): US planemaker Boeing Co said on Monday it sold 100 new 737 MAX-7 jets to long-time customer Southwest Airlines, in its biggest order win since the aircraft’s safety ban was lifted in the United States late last year. Shares of Boeing were up 3.5% in early trading on the news.
The order signals Southwest’s show of confidence in 737 MAX jets, ending speculation of a shift to jets made by Airbus SE by the US budget carrier as it hopes for a recovery in the pandemic-hit aviation sector.
“This is a very solid boost for the (737 MAX) program, but since Boeing was the incumbent here they had a strong advantage,” said Teal Group analyst Richard Aboulafia.
“In fact, since Southwest is the world’s only large 737-only airline, it would have been a major disaster for Boeing if they had lost.”
Southwest, which has been flying older variants of the 737 planes for nearly 50 years, said its order book now has a total of 349 orders and 270 options for the 737 MAX jet for 2021 through 2031.
Southwest previously had 249 orders and 115 options for the 737 MAX aircraft for 2021 through 2026.
The COVID-19 outbreak compounded troubles for Boeing, forcing it to cut production after the nearly two-year grounding of the 737 MAX family, following fatal crashes in 2018 and 2019.
After a blowout 2020, Boeing has outperformed Airbus in order wins this year with its monthly orders, including cancellations, turning positive for the first time in February since November 2019.
Airbus, on the other hand, had reported negative net orders for the first two months of this year.
Southwest’s purchase comes days after Reuters reported here that Boeing was close to a multibillion-dollar deal to sell dozens of 737 MAX 7 jets to Southwest.
Each 737 MAX 7 carries a list price of roughly $100 million, though such jets usually sell for less than half their official value with typical market discounts, aircraft industry sources have said.
American Airlines readies more jets to meet rising demand
American Airlines said on Monday it expects to fly most of its fleet in the coming months thanks to strong domestic and short-haul international bookings as COVID-19 infection rates and hospitalizations decline and more people receive vaccines.
American said that as of March 26, average bookings for the next seven days had reached 90% of levels experienced before the pandemic upended air travel in 2019, with a domestic load factor of about 80%.
“The Company presently expects this strength in bookings to continue through the end of the first quarter and into the second quarter,” it said in a regulatory filing.
Shares in US airlines, which parked hundreds of jets as demand plummeted last year, have climbed this year amid hopes for a recovery.
The US Transportation Security Administration (TSA) screened 1.57 million passengers on Sunday, the highest number since March 2020.
Following the increase in travel demand so far this year, American said it expects its system capacity to be down between 40% and 45% in the first quarter to March 31 versus the same period in 2019, compared to its previous guidance for a 45% decline.
