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Boeing on Tuesday unveiled the largest commercial deal in its history, when Southwest Airlines of the US placed a $19bn order for 208 single-aisle aircraft.
Southwest’s order is the first for Boeing’s new 737 M
ax, a fuel efficient version of the US aerospace group’s popular narrow-body workhorse.
Boeing is running to catch-up with the strong order book recorded by Airbus for its A320neo, the new version of the European aerospace group’s single-aisle aircraft that should burn markedly less fuel than the existing model.
Airlines across the world are showing a growing appetite for the A320neo and 737 Max because of high fuel prices.
Southwest, the US airline that pioneered the industry’s low-cost business model, will be the launch customer for the 737 Max in 2017.
It is buying 150 737 Max aircraft, plus 58 737 current generation aircraft. The combined order is worth almost $19bn at list prices, although Southwest is expected to secure a significant discount.
Southwest’s order overtakes Boeing’s previous record for a single commercial aircraft deal, which was unveiled last month at the Dubai air show. Emirates, the fast-growing Dubai-based airline, announced an order for 50 777 widebody aircraft worth $18bn at list prices.
Southwest has an all-Boeing fleet of aircraft, and Jim Albaugh, head of the US manufacturer’s commercial aircraft division, said: “Southwest is a special Boeing customer and has been a true partner in the evolution of the 737 … As launch customer for the 737 Max, Southwest, Boeing and the 737 continue that legacy.”
The key improvement on the 737 Max compared to the existing version of the aircraft is the introduction of a more fuel efficient engine.
The CFM International Leap 1B engines on the 737 Max are supposed to reduce fuel burn and carbon dioxide emissions by 10 to 12 per cent compared to existing aircraft.
Southwest said its new Boeing order would add to current ones that seek to ensure that existing aircraft are replaced by more modern aircraft.
Gary Kelly, Southwest chief executive, said: “Today’s environment demands that we become more fuel-efficient and environmentally friendly, and as the launch customer of the Boeing 737 Max, we have accomplished both.”
Airbus has notched up orders for 1,196 A320neo aircraft since January, and first deliveries start in 2015.
The A320neo is supposed to reduce fuel burn by 15 per cent compared to the existing aircraft.
In addition to Southwest, Boeing has commitments from 12 customers to collectively buy about 750 737 Max aircraft, but the airlines have yet to turn their plans into orders. The 12 customers include Indonesia’s Lion Air, American Airlines and Aviation Capital Group, the lessor.