JUN 29.2000,  Boeing employees send a smile to Southwest Airlines, commemorating 29 years of working together. The airplane, a new 737-700, was preparing for a routine test flight at the Boeing flightline in Renton, Wash., before delivery to the airline. Southwest today announced an order for up to 290 more Next-Generation 737s.  The 29-year relationship between Southwest Airlines and The Boeing Company continues as Southwest announces an order for up to 290 "Next Generation" Boeing 737-700 aircraft.

This is the single largest aircraft order made by Southwest Airlines and the largest order ever for Boeing's Next Generation family of aircraft. The aircraft will be powered by CFM56-7 engines manufactured by CFM International, a 50/50 joint company between Snecma Moteurs and General Electric of the United States.

"We have the utmost confidence in the future of Southwest Airlines predicated upon the strength of the public's desire for more low fares with exceptional Customer Service," said Herb Kelleher, Southwest's chairman, president, and CEO.

"This should reassure America that Southwest Airlines will continue to expand its low-fare influence across the country, giving more Customers the Freedom to Fly." The deal includes firm orders for 94 new aircraft, in addition to the 74 Southwest currently has on order with The Boeing Company through 2004. Deliveries under the new order begin in 2002, adding 10 aircraft to the 21 currently scheduled for delivery that year. Firm orders will extend through 2007, with options for 25 additional aircraft in 2008, and purchase rights for another 171 aircraft from 2009 through 2012. Southwest currently has 323 Boeing 737 aircraft in its fleet.

"The 737 has served us well over the past 29 years, providing our Customers with safe, reliable, cost-effective transportation," Kelleher said. "The superior partnership Southwest enjoys with The Boeing Company and CFMI, and the dedication of each of our superb Employees, makes it possible for us to take advantage of the many opportunities for growth that currently exist."

"It's no wonder that the Boeing 737s have carried more than six billion passengers - the equivalent of today's world population. We are proud that the Next-Generation 737s are, once again, Southwest's equipment of choice for their future success and passenger satisfaction," said Alan Mulally, Boeing Commercial Airplanes Group president.

Southwest Airlines recently announced it will inaugurate service to its 57th city on October 8, 2000. Residents of the Buffalo, NY, area will be the latest to benefit from the "Southwest Effect," a term coined by the U.S. Department of Transportation to describe the increase in airline travel stimulated by low Southwest Airlines fares. According to testimony before the United States Senate, Professor Steven Morrison of Northeastern University said that competition from Southwest Airlines accounted for $9.7 billion in airfare savings since 1978. He also said that Southwest Airlines lowers airfares on routes that account for 94 percent of U.S. domestic passenger miles.*

"This is a very important time in commercial aviation and the need has never been greater for Southwest Airlines to maintain its vigilant post as the low fare policeman on the beat," Kelleher said. "Our balance sheet is strong and demand for our product has never been greater. The duration and terms of this contract with The Boeing Company echo the confidence we have in our continued success."

Southwest's existing and future firm orders and options break down as follows (not including 171 new purchase rights and 46 existing purchase rights):