Southwest Airlines is pushing back delivery of 30 Boeing 737s to save money and get a better return on its investment, the airline’s CEO said on Wednesday at its annual shareholder meeting.
Southwest got its first 737-800 from Boeing Co. in March. It had planned to get 20 more next year and 10 more in 2014. Now those deliveries will be pushed back to 2017 and 2018, according to chairman, president, and CEO Gary Kelly.
He said Southwest will save more than $1 billion through 2014 with the delays. And Kelly said he wants the airline to hit its targets for return on its investments before its fleet grows. Southwest’s fleet size next year will be the same as this year or down slightly, he said. Southwest flies only 737s, and it had 558 at the end of March. Its AirTran unit flies 737s as well as 717s.
Kelly also said Southwest won’t be getting into the petroleum business anytime soon. Delta Air Lines Inc. is buying an oil refinery to make or trade for 80 percent of its domestic fuel needs, and raising the question of whether other airlines might want their own refineries, too. Jet fuel has become the largest single expense for airlines — $6.5 billion for Southwest this year, Kelly said.
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