Southwest Airlines plans to order $2.3 billion new 737 MAX jets in 2023

Southwest Airlines plans to invest around $2.3 billion in aircraft capital spending in 2023, according to its Q1 2023 financial results announcement.

The US-based airline intends to receive approximately 70 Boeing 737 MAX aircraft this year, 20 fewer than initially expected. Consequently, it plans on reducing flights in the second half of 2023, with a projected capacity increase of 14 to 15 percent year-over-year, one point lower than the previous guidance.

Additionally, the retirement of one Boeing 737-700 NG will be pushed into 2024, with 26 737-700s to be retired in 2023.

Boeing has stated that some 737 MAX deliveries will be affected by a recently discovered issue at Spirit AeroSystems, a supplier of the manufacturer.

Southwest Airlines had a net loss of $159 million by the end of Q1 2023, which was expected due to the negative financial impact of around $380 million pre-tax, or $294 million after-tax, related to the December 2022 operational disruption.

However, Bob Jordan, President and CEO of Southwest Airlines, noted that travel demand and revenue trends in March 2023 were strong, resulting in solid profitability for the month and record first-quarter revenues. The airline aims to manage inflationary cost increases and maintain its competitive cost advantage.