Southwest Airlines says it will spend about $100 million to convert AirTran Airways'
Boeing 717s, but Chairman, President and CEO Gary Kelly insists the expense is justified to eliminate all 88 of the 100-seat aircraft from Southwest's fleet.
The cost is in addition to $40 million provided separately by Boeing.
Southwest CFO Laura Wright added that
Southwest expects a $200 million boost in annual pre-tax income from replacing the AirTran 717 service with
737s that accommodate 26 more seats at roughly the same trip cost.
Southwest also says the sublease income it will get from Delta is "essentially a wash" with its ongoing rental expense for the aircraft.
The low-cost carrier says it would have spent $50 million to reconfigure and repaint the 717 aircraft if it had kept them for the Southwest fleet. Instead, it signed a deal with Delta that will send three of the 717s to the legacy carrier each month, starting in August 2013.
http://aviationweek.com/awin/southwest-boeing-spending-140m-717-conversion