Southwest Air adds to Boeing Max 7 order as US travel rebounds

Southwest Airlines Co. exercised options to add 34 Boeing Co. Max 7 jets to its fleet, two months after committing to buy 100 of the planes, as growing demand for air travel takes hold in the U.S.

The aircraft, the smallest version of the narrow-body jet, will be delivered next year, Southwest said in a regulatory filing Tuesday. It will bring the size of Southwest’s planned Max 7 fleet to 234 aircraft and its total order book for Max planes to 660. Deliveries are scheduled through 2031.

The deal extends the 150-seat Max 7 as a mainstay of Southwest’s fleet, complementing the 175-seat Max 8. The Max 7 has a longer range, giving Southwest the ability to connect cities it can’t now. The jet can also be used for short-distance international routes or for service to Hawaii.

Southwest now expects to spend about $1.5 billion on aircraft next year, up from its previous projection of roughly $700 million, according to the filing. Beyond plans to grow, the airline has said it needs to replace older 737-700s that it will be retiring in the coming years.

The Dallas-based carrier also moved forward another 64 existing Max 7 options into the 2023-to-2025 time frame and added 32 new options for aircraft that could be delivered in 2026 and 2027. That gives Southwest latitude to renew its fleet if the rebound in air travel is sustained.

Southwest Chief Executive Officer Gary Kelly has signaled in recent weeks that the company needs new aircraft to renew its fleet. With a domestic air-travel recovery on the way, U.S. carriers are going to be supply-constrained during the summer, Boeing CEO Dave Calhoun said last week.

Boeing advanced 1.3% to $256 before the start of regular trading in New York, while Southwest rose 1.1% to $58.93.