BUSINESS
12/15/2010 06:19 pm ET Updated May 25, 2011

Southwest Orders Bigger Boeing Planes

ATLANTA (by Karen Jacobs) - Southwest Airlines Co said it will add 20 bigger Boeing Co planes to its fleet that will enable the discount carrier to fly to new destinations such as Mexico, Central America and Canada and carry more passengers.

Southwest, which is planning to buy rival AirTran Holdings Inc to bolster its presence in big U.S. East Coast cities such as Atlanta, said it will convert 20 standing orders for the Boeing 737-700 into orders for bigger 737-800s, with the first delivery scheduled for March 2012.

Unions representing the carrier's flight attendants and pilots recently approved changes to their labor contracts that pave the way for the larger plane to be added.

"We think we have tremendous opportunities to expand the Southwest Airlines route map," Chief Executive Gary Kelly said on Wednesday in an address to aviation leaders at the Wings Club in New York that was webcast.

He said the plane adds about 38 more seats and will boost the carrier's ability to serve longer-haul routes. He added it would enable Southwest to potentially expand service to markets such as Alaska, Hawaii, Canada, Mexico and Central America.

The orders for the 737-800 are potentially worth $1.6 billion at current Boeing list prices.

Shares of Southwest were down 1.8 percent at $12.65 in afternoon trading.

(Reporting by Karen Jacobs, additional reporting by Kyle Peterson in Chicago)

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