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Southwest exercises another 40 737 Max 8 options

Southwest Airlines has exercised yet another 40 Boeing 737 Max options, its second move in recent months to firm up additional deliveries in the coming years.

The Dallas-based airline says it now expects 10 additional 737 Max 8s to be delivered in each of the four years from 2019 through 2022.

In addition, the carrier moved five 737 Max 8 deliveries from 2019 into the fourth quarter of this year, and replaced three pre-owned 737-700s scheduled for delivery this year with three 737 Max 8s to be delivered in 2019.

The conversion of the 40 737 Max 8 options will take to 80 the total 737 Max 8 options Southwest has executed. The airline in early January announced it had exercised 40 options, taking those aircraft in 2019 and 2020. Corporate tax reform has helped drive the airline's appetite for more 737 Max 8 firms orders.

With the latest fleet changes, Southwest will have 115 remaining options for the 737 Max 8, a revised fleet plan shows. Its historical orderbook for the 737 Max will grow to 250 aircraft. Southwest will take delivery of 46 aircraft this year, including 13 aircraft that it has already accepted as of 25 April.

In 2019, it will add 30 aircraft - seven 737 Max 7s and 23 Max 8s.

Chief executive Gary Kelly says the additional 737 Max 8s could mean more retirements of 737-700s.

"We got flexibility in the fleet, we can choose not to do that," he says during an earnings call. "We exercised 40 [options] and however they fall, we would offset those with retirements."

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