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Boeing Reportedly Nearing Huge Southwest Order

By Lou Whiteman - Mar 11, 2021 at 1:40PM

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If the deal is finalized, the aerospace company would avoid a major symbolic loss to archrival Airbus.

Boeing (BA -3.76%) is reportedly nearing a deal to sell dozens of its 737 MAX planes to Southwest Airlines (LUV -3.80%), locking up what has historically been one of its most loyal customers and keeping Southwest from adding Airbus (EADSY -1.76%) jets to its fleet.

Since its inception, Southwest has only flown versions of the 737, but the airline has been shopping around on an order to replaces its aging 737-700s. It is likely to buy at least 300 planes to replace the 470 737-700s in its fleet, at a sticker price of about $100 million apiece.

A Boeing 737 in Southwest colors.

Image source: Boeing.

Boeing has long been considered the favorite to win the order, but reports surfaced earlier this year of difficult negotiations between the two sides along with General Electric (GE -1.25%), maker of the engines for the Boeing plane. Waiting in the wings is the Airbus A220-300, which arguably is a better fit for Southwest in terms of plane size.

An Airbus win would have been a huge financial and symbolic blow for Boeing. At 300 planes, the order would be the largest in the industry since December 2017. And the shockwaves of Southwest choosing the A220 would likely help Airbus efforts to sell the plane to other U.S. carriers, including American Airlines Group and United Airlines Holdings.

According to Reuters, Boeing and Southwest are closing in on a firm order for dozens of planes with "potentially significant options" for additional aircraft. It was unclear when the deal might be announced, if it is completed.

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Stocks Mentioned

The Boeing Company Stock Quote
The Boeing Company
$119.40 (-3.76%) $-4.67
General Electric Company Stock Quote
General Electric Company
$74.52 (-1.25%) $0.94
Southwest Airlines Co. Stock Quote
Southwest Airlines Co.
$41.73 (-3.80%) $-1.65
Airbus Stock Quote
$27.87 (-1.76%) $0.50

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