Paul Lewis/WASHINGTON DC
Boeing plans to increase production of its 737 to a record 28 aircraft per month in the wake of its single largest order to date from Southwest Airlines for up to 294 more 737-700s and an unannounced order from Continental Airlines for an additional 18 larger -800s.
The company will increase 737 production from the current high of 24 jets from the third quarter of 2001. The new orders increase the total 737-600/700/800/900 orderbook to 1,579 aircraft, of which 558 have been delivered.
Southwest has placed a firm order for 94 more 737-700s to supplement the 70 already in service and 74 outstanding from earlier purchases. The airline has also taken options on 25 more aircraft for delivery in 2009, in addition to 63 options it still holds, as well as purchase rights on another 171 aircraft exercisable between 2009-12. Southwest plans to self-finance the deal, which has a book value of $4.5 billion.
Delivery of the new aircraft will begin with the first 20 in 2002 and extend through to 2008. The Dallas-based carrier has opted to stick with the same 137-seat 737-700 version it launched in 1993, but can convert this to the larger 175-seat 737-800 with two years' notice.
The order will enable Southwest to complete the retirement of its 34 remaining hush-kitted 737-200s by 2005, while the first of the carrier's 195 737-300s will reach the end of their depreciable lives in 2004. The additional 737-700s will provide the airline with the flexibility to meet a conservatively projected 8% per annum growth. Available seat mile capacity in 1999 expanded by 11.2%.
According to Southwest president and chief executive Herb Kelleher, around 25% of the new aircraft will be employed on yet-to-be announced new routes. The remaining additional capacity will be used to serve existing routes, with Buffalo due to become the airline's 57th destination when service starts on 8 October.
Continental, meanwhile, is understood to have topped up its 737-800 orderbook with the addition of 18 aircraft at the end of May. The aircraft are among 36 unidentified 737-700/800 orders listed by Boeing. The airline has 78 737-700/800s in service and another 26 -800s and 15 -900s on order from earlier purchases.
Source: Flight International
