Southwest Airlines (WN, Dallas Love Field) has firmed up options with Boeing (BOE, Washington National) for forty additional B737-8s. In its 1Q18 financial statement, the Texas-based budget carrier said ten aircraft would deliver each year from 2019 through to 2022. CEO Gary Kelly later said the optioned aircraft were originally from the 2026-2027 time period.

In addition to this conversion, Southwest said it had also brought forward the deliveries of five firm B737 MAX 8s from 2019 to the fourth quarter 2018. Three pre-owned B737-700s, previously scheduled for delivery in 2018, were replaced with three B737 MAX 8 aircraft to be delivered in 2019.

As it stands, out of its 237 firm-ordered MAX 8s, Southwest now expects to add 19 in 2018, 20 in 2019, 35 in 2020, 44 in 2021, and 27 in 2022.

"We have a very strong business case to replace older B737-700 aircraft, given the superior economics of the MAX 8," he said. "The tax reform benefit for Southwest makes this capital investment more feasible, and of course I want to thank Boeing for their support in making that happen."

Including the revision made to its firm order schedule executed in December 2017, and in recognition of the expected significant savings from tax reform, Southwest said it has now exercised a total of 80 options with Boeing. The added capacity will be used to further invest in its fleet to support future growth opportunities and fleet modernization. As such, it expects to end 2018 with 752 aircraft in its fleet based on the current aircraft delivery schedule.

On the carrier's expansion plans, Kelly confirmed Southwest would start selling tickets for flights to from each of San José, US, Sacramento International, Oakland International, and San Diego International to the Hawaiian airports of Honolulu, Lihue, Kona at Keahole, and Kahului later this year. According to President Tom Nealon, Southwest will only be able to specify an exact date for the launch of flights once it has completed ETOPS certification with the US Federal Aviation Administration (FAA).