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Southwest Airlines is in talks for at least 300 new 150-seat jets for its fleet, as part of a deal that could transform its five-decade old business model and the commercial aircraft industry with it, according to several industry officials familiar with the airline’s needs. A campaign would pit Boeing’s 737 Max 7 and Airbus’s A220-300 in head-to-head competition in a bid to replace its aging fleet of workhorse 737-700s.

While the campaign between Airbus and Boeing hasn’t yet begun, according to the officials, Southwest is currently in pre-campaign negotiations with Boeing, General Electric and Safran, joint venture partners for the 737 Max’s CFM International engine.

Related: Southwest wants a small airplane from Boeing or Airbus and that could reshape aviation

The Air Current explored the dynamics shaping Southwest’s pursuit of a 150-seat airplane for its fleet in November 2019 — dynamics that remain firmly in place even with the impact of the COVID-19 pandemic and demise of the Boeing-Embraer joint venture in 2020.

The deal is Boeing and GE’s to lose, according to senior leaders at the airline, anchored by the power of its incumbency and the 737 fleet continuity that has made Southwest the carrier it is today. However, if certain contractual issues, particularly around the engines, can’t be overcome in this pre-campaign period, a head-to-head competition will follow and likely give the edge to Airbus and the A220. “Boeing, GE and Safran can take this off the table,” said a senior Southwest executive closely familiar with the deal’s mechanics. “If we go to a campaign, Boeing is destined to lose.”

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Jon Ostrower is Editor-in-chief of The Air Current. Prior to launching TAC in June 2018, Ostrower served as Aviation Editor for CNN Worldwide, guiding the network's global coverage of the business and operations of flying. Ostrower joined CNN in 2016 following four and half years at the Wall Street Journal. Based first in Chicago and then in Washington, D.C. he covered Boeing, aviation safety and the business of global aerospace. Before that, Ostrower was editor of the award-winning FlightBlogger for Flightglobal and Flight International Magazine covering the development of the Boeing 787 Dreamliner and other new aircraft programs from 2007 to 2012. Ostrower, a Boston native, graduated from The George Washington University's School of Media and Public Affairs with a bachelor's degree in Political Communication. He is based in Seattle.

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