Southwest Airlines Co. (NYSE: LUV) is continuing its long business relationship with American manufacturer The Boeing Company (NYSE: BA), ordering 208 new 737 jets in a $19 billion deal.
Some 150 of the aircraft as part of the order will be Boeing's forthcoming 737 MAX, an enhanced version of its best-selling plane that will have advanced, more fuel-efficient engines. The 737 MAX is Boeing's answer to the competitive Airbus A320neo that has more than 1,400 firm orders and commitments, according to The Wall Street Journal.
Southwest, based in Dallas, has been a Boeing customer for four decades. Southwest also announced on Tuesday it will buy 58 737 Next Generation aircraft from Boeing, the Seattle-based manufacturer. Southwest becomes the first company to complete an order for the 737 MAX, and the deal, according to Boeing, is its largest firm order ever in dollar value and the total number of planes that will be delivered.
Southwest will be the first airline to receive the 737 MAX. Boeing said the company now has orders and commitments for some 900 737 MAX aircraft from 13 customers. The company opted earlier this year against a total new design for its new fuel-efficient engine, deciding instead to load it into the popular 737 framework.
Boeing keeps their exclusivity with Southwest and legitimizes the aircraft, said Alex Hamilton, managing director with EarlyBirdCapital, in an interview with Reuters. The recovery continues to roar along.
Boeing's stock was up 2.36 percent on Tuesday, or $1.67, to $72.58 in mid-morning trading on the New York Stock Exchange. Boeing's 52-week high is $80.65, after the stock fell as low as $56.01. The company was plagued by a long delay in the launch of its 787 Dreamliner, but that aircraft completed delivery this fall, and Boeing's stock has been on the rise since.