Boeing Secures $19 Billion Deal With Southwest Airlines

Southwest Airlines Co. (NYSE:LUV) inked a $19 billion deal for 150 of Boeing’s (NYSE:BA) new 737 MAX aircraft. Southwest has become the first airline to order fuel-efficient jets.

This order is Boeing’s largest ever in terms of dollar value and the number of airplanes. The 737 MAX jets are expected to enter service in 2017.

Southwest said this purchase is a part of an effort to adopt a more fuel-efficient fleet. This well help with both environmental concerns and high fuel costs. The 737 MAX aircraft will reduce fuel burn and carbon dioxide by more than 10% compared to today’s most fuel efficient airplane. This airplane will also cost 7% less to operate than similar aircraft.

“Overall, we expect the superior economics of our fleet modernization plan to meet our 15% pretax return requirement and provide substantial flexibility to manage our growth in a variety of economic conditions over the next decade,” Southwest chief operating officer, Mike Van de Ven said in a statement.

Shares of Southwest Airlines (NYSE:LUV) are down 0.36% at $8.40 in midday trading. LUV has traded 2.02 million shares so far today and 8.20 million shares are traded a day on average.

The Boeing Company (NYSE:BA) is up 1.10% at $71.68 in midday trading. BA has traded 2.29 million shares so far today and trades 5.90 million shares a day on average. BA is up more than $2 a share over the past week.

written by

An experienced trader with a background in political science, Marc got his start as an individual trader surfing the old stock message boards. He is always on the lookout for the next big winner.
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