Southwest to buy larger jets

Southwest Airlines Co. is getting new, larger planes that could pave the way for the all-domestic airline to offer international flights.

CEO Gary Kelly said Wednesday that Southwest will change an existing order with Boeing Co. and get 20 new 737-800 jets beginning in March 2012.

Those jets have 175 seats, 38 more than the largest planes in Southwest’s current fleet, which means potentially more revenue per flight.

The airline plans to add international service when it completes the purchase of AirTran Airways, which flies to Mexico and the Caribbean. It could still use AirTran’s planes for those flights.

Kelly said during a speech in New York that Southwest might use the 737-800 first at busy airports in the Northeast. But he said it could also be used to fly to Hawaii, Alaska, Canada, Mexico and the Caribbean – destinations that Southwest doesn’t serve now.

Southwest notified Boeing it will substitute 737-800s orders for ones it had already placed for the 737-700. Kelly said Southwest would retire older planes as it gets the new ones, and doesn’t plan to expand its fleet.

The airline did not disclose financial terms of the switch, but the bigger plane is more costly. Boeing lists the average price of a 737-800 at $80.8 million, compared to $67.9 million for the 737-700. However, aircraft manufacturers routinely give discounts to good customers.

Southwest operates a fleet of more than 400 planes, all various models of the one-aisle 737. It’s a short- to medium-range jet that Boeing began producing in the late 1960s and has updated many times since.

For years the reliance on one type of plane has been seen as a strength at Southwest because it kept things simple. It was cheaper to train pilots and mechanics to work on just one type of plane.

Southwest’s union pilots and flight attendants approved purchasing the larger plane. It could mean more jobs because an extra cabin attendant will be required on flights using the 737-800.