Boeing 737 MAX aircraft are parked at a Boeing facility on August 13, 2019 in Renton, Washington.
David Ryder | Getty Images
Southwest Airlines is increasing its order for the smallest Boeing 737 Max model by nearly three dozen aircraft, the airline said on Tuesday, citing an improvement in travel demand.
The Dallas-based airline said in a filing that it will exercise options to increase its firm orders of 737 Max 7s by 34 aircraft, bringing its total backlog for that aircraft to 234. The Boeing 737-only airline has orders for 149 Max 8 Max aircraft to be shipped through 2031 as the company retires older 737s.
Southwest expects its capital expenditures to be $ 1.5 billion in 2022, up from an earlier estimate of $ 700 million.
United Airlines and Alaska Airlines have also increased their Boeing Max orders in recent months, which has helped fuel demand that dried up after fatal crashes following the aircraft crash in 2019.
Southwest said it expects demand and sales to continue to improve well into July as vacationers return to air travel and leisure prices soar to 2019 levels.
It predicts June sales will be 20% lower compared to 2019, and July sales will be 15-20% lower than two years ago.
Demand for business travel, the laggard in the recovery, is also improving but remains well below 2019 levels, a trend that will weigh on tariffs, Southwest said. U.S. regulators removed the grounding last November.