Southwest Airlines is accelerating retirement of its older Boeing
737 Classic fleet, projecting it will fully retire the aircraft by mid-2018.
That's quicker than its previous plan of retirement by 2021.
In late December, Southwest changed its delivery schedule to add 33 Boeing
737-800s and to change 25 Boeing 737-700s to 737-800s.
Quicker retirement will result in long-term savings from
better efficiency and lower maintenance costs, Southwest executive vice
president and CFO Tammy Romo said on the carrier's fourth-quarter earnings call.
"It simplifies a lot of operations and improves the reliability, in terms
of less downtime from a maintenance perspective. We'll also get a boost of
productivity of our fleet."
At the end of 2015, Southwest had 129 Classics in its fleet
of 704 aircraft, according to Romo.
During the fourth quarter, passenger revenue increased 3.3
percent year over year to $4.6 billion. Traffic increased 11.1 percent and
capacity increased 8.3 percent; load factor increased 2.1 percentage points to
8.1 percent. Southwest's average fare decreased 5.1 percent to $149.94, and
yield declined 7 percent.
Southwest reported net income of $536 million
for the fourth quarter, up from $190 million a year prior. For the full year,
net income nearly doubled to $2.2 billion. The carrier has benefited from cost
reductions both in "significantly lower jet fuel prices and our fleet
modernization," president and CEO Gary Kelly said.